360 Degree CEO Perspective Of The Global Healthcare Industry

04/19/232

Political&

Regulatory

EmergingOpportunities

Cultural

GrowthFunctions Growth

Team

Growth Process

CareerDevelopment

NonCustomer

Demo-graphics

Behavior

Competitor’sCustomers In-Direct

Competition

CompetitiveStrategy

CompetitiveBenchmarking

EmergingCompetition

Country Risk

Economic Trends &Issues

EconomicThreats

Economic Trends

EmergingTechnology

NewApplications

DisruptiveTechnologies

IndustryExpansionPotential

IndustryConvergence

IndustryShifts

ExternalIndustryImpact

IndustryIntegration

CEO

GLOBAL

BEST PRACTICES

CUSTOMER

COMPETITIVE

ECONOMIC

TECHNOLOGY

INDUSTRY

TECHNOLOGY

BEST PRACTICES

INDUSTRY

GLOBAL

CUSTOMER

ECONOMIC

COMPETITIVE

Identify geographic expansion opportunities, monitor the political and regulatory effects of doing business in another country; understand cultural implications and requirements

Ensure a solid understanding of emerging technologies: affects and opportunities; plan for potentially disruptive technologies; leverage new products and/or applications for growth

Maintain a solid grasp of your key industries and the industries that could have an impact on your business; identify factors that are causing new trends and changing buying behaviours; address industry convergence and integration; identify opportunities to expand within the market

Know any and all emerging competition; identify alliance partners; benchmark your growth against the industry; refine competitive strategy; monitor market perceptions, changing processes, technologies, culture, etc.

Identify unmet needs; tailor products and services to market needs; manage brand equity; identify emerging customer segments; keep track of changing cultural trends

Pinpoint current and future economic trends; identify growing customer segments; take advantage of emerging opportunities; adjust for currency changes

Maintain an effective Growth Plan for 3 - 5 years in the future; create and develop the Growth Team; ensure Growth Team members understand their functions and contributions to growth; leverage industry Growth Thought Leaders and best practices.

The CEO’s Perspective Of The Complex Business UniverseThe CEO’s Perspective Of The Complex Business Universe

04/19/233

AgendaAgenda

Global Healthcare Industry OutlookA Overview By AreaB

Top 10 Global Healthcare Trends1.

The Triple Healthcare Crisis2.

Shifting Healthcare Expectations

Hot Spots & Emerging Geographies

5.

Convergence in Healthcare

PESTLE Analysis7.

3.

4.

6.

Opportunity Analysis – Major Areas8.

Healthcare Paradigm Shift

Pharmaceuticals & Biotechnology 1.

2.

3.

4.

Clinical Diagnostics

Medical Devices

Medical Technologies

04/19/234

Global Healthcare

Industry Outlook

Shifting Healthcare Expectations

Convergence in Healthcare

The Triple Healthcare Crisis

Healthcare Paradigm Shift

Hot Spots & Emerging Geographies

PESTLE Analysis

Opportunity Analysis

Top 10 Global Healthcare Trends

04/19/235

ProjectedImpact on the

HealthcareIndustry

High Impact

Low Impact

CertaintyLow High

2010 – 2020

Top 10 Global Healthcare Trends MoreInfo

04/19/236

Patient centred care

2010 20202015

Power PatientGeneration

Major Trend

Patients Become Healthcare Kings And Queens, Medical Communities Become Interconnected, Doctor-Patient Relationship Goes Virtual

Patients Become

Customers

Personalised Healthcare

Healthcare Globe Trotters

Hospitals Go Virtual

SmarterDrugs

Devices Become Monitors

Innovation vs. Knowledge

CyberDocs

Prevention Before Cure

1

2

3

4

5

6

7

8

9

10

Baby Boomer retirement startsPatients become

healthcare Kings and QueensPatients gain access to

health quality information

Consumerismholistic health and well being

One stop shopCustomised products Home services

Genetic testingTargeted clinical trials

Information based medicine

Major diseases understood at molecular levelWellness care Presymptomatic diagnostics

& treatments

Immediate Treatment abroadbecomes an option

"medical tourism" crossesthe US$2 billion mark

Private companies invest in facilities and services abroad

All departments/buildings within hospitals are connected

Medical communities (1°, 2° care) become interconnected

Regional/Country-wide connectivity

Non-invasive delivery Drug cocktails will enhance productivity, memory,and physical performance

Disease management Remote patient monitoring Self-monitoring

War for medical talentMedical professionals keep up with knowledge growth

Baby Boomer retirement starts

Virtual face to face doctor- patient relationship

Perform routine diagnostics with predictive precision

Cheaper care available to more people in need

Early treatment Implementation of IT Precise therapy becomes reality

04/19/237

15% of patients admitted to hospital

suffer an adverse event.

8% of adverse events result in death.

6% of adverse events result in

permanent disability.

10-20% of all adverse events are

caused by medication errors.

10-15% of hospital admissions occur

because providers do not have access to

previous care records.

20% of laboratory tests are requested

because the results of previous

investigations are not accessible.

Healthcare is challenged by three interlocking crises that make present healthcare systems unsustainable:

Rising costs

Changing demographics

Quality

The Size of the Problem – Quality

Healthcare Is Challenged By Three Interlocking Crises That Make Present Healthcare Systems Unsustainable

Cost

Demographics Quality

Cost

Demographics Quality

04/19/238

$2,884

$3,647

$2,493 $2,665 $2,451 $2,693$2,337 $2,527

$2,110$2,614

$1,927$2,469 $2,371

$1,938 $1,927 $1,829 $1,609

$3,517

$717

$1,684$854

$914 $680$989 $760

$1,018$494

$1,165$449

$352$593 $431 $514

$646

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

In almost all countries worldwide, per capita healthcare spending is rising faster than per capita income.

No country can spend an ever-rising share of its output on health care, indefinitely. Spending growth must eventually fall in line with growth in per capita income.

If Current Trends Hold, By 2050 Health Care Spending Will Almost Double Claiming 20% – 30% Of GDP For Some Economies

$2,884

$3,647

$2,493 $2,665 $2,451 $2,693$2,337 $2,527

$2,110$2,614

$1,927$2,469 $2,371

$1,938 $1,927 $1,829 $1,609

$3,517

$717

$1,684$854

$914 $680$989 $760

$1,018$494

$1,165$449

$352$593 $431 $514

$646

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Private Per Capita Spending (2007) Public Per Capita Spending (2007)

Spending as % of GDP (2007) Estimated Spending as % of GDP in 2050

$1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Unsustainable Unsustainable Levels!!!Levels!!!

$1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009 $1,009

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

04/19/239

In 2000, 10% (606 million) of the global population was aged 60+. By 2050 this will be more than 21% (2 billion).

People aged 60+ utilise 3-5 times more healthcare services than younger people.

75% of people aged 60+ have one chronic condition, while 50% have two or more chronic conditions.

Chronic diseases account for more than 60% of all health care spending.

Health economics dictate a shift in spending – away from treating and towards predicting, diagnosing and monitoring.

30% of the population consumes 90% of health care resources

Balance Between Young And Old Is Shifting, Ageing Related And Chronic Diseases Increase, People Living With Multiple Long Term Conditions

04/19/2310

Healthcare

Entertainment & Media Customised products Home services

Retailing & Finance Customer service Comparison shopping Self-service Special offers

Manufacturing & Distribution Faster time to market One stop shop Anytime anywhere care Supply chain integration

Consumer Experiences In Other Markets Affecting Expectations From Healthcare

Health care that is customised to monitor, diagnose, educate, and intervene regardless of location or time-will be common.

Health care that is customised to monitor, diagnose, educate, and intervene regardless of location or time-will be common.

Freedom to make own decisions

Freedom to make own decisions

Greater variety of providers, products and services e.g. expensive health plans and alternative medicine services

Greater variety of providers, products and services e.g. expensive health plans and alternative medicine services

Power patients have increased access to computers and information through multiple channels to seek and analyse health information

Power patients have increased access to computers and information through multiple channels to seek and analyse health information

04/19/2311

Predictive tests

Disease Management

Gene Mapping & Functional Analysis

Tailored Treatments- Genomic/Proteomics based

Preventative Programmes

Health Management

Bio Chips: Controlled Released

Delivery Systems

Telemedicine

Remote Patient Monitoring

Drug Delivery

IT / Digital Information Systems

Nanotechnology

Medical Devices

Medical Technologies

Life Sciences

Technology…….Enables it

Economics………………Require it

Demographics………….Demand it

Convergence In Healthcare Enables Personalisation, Targeted Medicines, Virtual Patient Monitoring, Enabling A Preventative Approach To Healthcare

04/19/2312

Riding On A Wave Of Technical Innovations Healthcare Will Change From A “Find It And Fix It” System To A “Wellness Tracking” System

Current Healthcare Systems

Suffer from the

“RADAR” Syndrome

Electronic Health Records (EHRs)

Chronic Disease Management Systems

Personal Digital Assistants

Disease Management Program

Home monitoring devices

Personal Health Records

Web- based education and support

Patient Scan

Good Chronic

Disease care

Patient Patient Support Support

ToolsTools

Telehealthfor virtual

interactions

Sharable Personal Health Records

Web portalsto EHR Systems

Provider Support

Tools

System oriented to acute illness

Patient’s role not emphasised

Follow up sporadic

Prevention overlooked

Patient then disappears from radar screen

Patient Appears (falls sick)

Patient is treated “find it and fix it”

Patient is discharged

Future Healthcare Systems

Must Apply a

“GPS” Logic

04/19/2313

A Modern Healthcare System Is On The Horizon Demanding A Healthcare Paradigm Shift

Fragmented Patient Flow Integrated & automated

...From

Invasive Diagnosis & Treatment

Less invasive, Preventative, image based

Provider Centric Focus Patient Centric

Centralised – Hospital Monitor De-Centralised–Shift to Community

One Size Fits All Approach Personalised Medicine

Therapeutics/Diagnostics/Devices Tools “Theranostics”

Treating Sickness Objective Preventing Sickness – “Wellness”

...To

04/19/2314

Threats Arise From Unconventional Players Outside The Traditional Healthcare Boundary

Telecommunication Companies

2010 : Orange launches "Connected Hospital", its first e-healthcare offering designed to improve patient comfort and care quality

Consumer Product Companies

Chemical Companies2010:Roche and Toyama Chemical enter licensing agreement to develop potential breakthrough drug to treat rheumatoid arthritis

Employers & Government

2010 : Integrated Healthcare Management in the US has been launched as the systematic application of processes and shared information to optimise the coordination of benefits and care for the healthcare consumer

Agriculture & Food CompaniesBiotech is the changing face of agriculture. Biotech crops were planted in 18 countries in 2004. By 2010, it is projected that 15 million farmers will grow genetically modified crops on up to 375 million acres in 30 countries.

2008: Virgin Group launched a new healthcare network. The first of six “one-stop shops” clinics will offer extra NHS and private services including dentistry, screening, a pharmacy and complementary therapies alongside GP practices. Ultimately, offering wider options for patients.

2010 : SUPERMARKETS in the UK are increasingly becoming one-stop-shops for everything by branching out into healthcare, with everything from in-store pharmacies to blood tests, blood pressure checks and health checks on your lungs.

Healthcare CompaniesHealthcare Companies

04/19/2315

A Look At The Future: Patient Centric Health & Wellness Care

Web of Care

Smart eHomes

Mobile EHR

Health Robots

Implantable eCare

Wearable BioSensors

NanoCare

Decision Support

Regenerative MedicineRegenerative MedicineRegenerative MedicineRegenerative Medicine

Pre-emptive MedicinePre-emptive MedicinePre-emptive MedicinePre-emptive Medicine

Digital MedicineDigital MedicineDigital MedicineDigital Medicine

NanoMedicineNanoMedicineNanoMedicineNanoMedicine

EcoMedicineEcoMedicineEcoMedicineEcoMedicine

Self CareSelf CareSelf CareSelf Care

Diet &

Nutrition

Humour &

Joy

Lifestyle & Stress Reduction

Mind Body & Spirit

Exercise&

Fitness

My Health & Wellbeing Databases

DoctorsDoctors& Medical& Medical

TeamTeam

CoachesCoaches&&

AdvocatesAdvocates

OnlineOnlineSupportSupport

CommunitiesCommunities

FriendsFriends&&

FamilyFamily

eHealthAdvisorNetwork

04/19/2316

U.S.Huge healthcare market and growing, large opportunities, niche players will be more successful

CanadaRelatively high government spending on healthcare, small number of local market players, sizeable market

Hot Spots And Emerging Geographies

Germany/SwitzerlandHigh spending on healthcare, large market with not too many market players, increasing focus on eHealth and digitisation

UK/Scandinavian CountriesHigh government spending on healthcare IT, large market, high number of healthcare IT players.

IndiaLarge market, low operating costs, excellent local skills, high local competition, Distribution hub to the Middle- and South-East of Asia

Hong KongHigh government spending on healthcare, small domestic market, gateway to China

Australia & New ZealandHigh government spending on healthcare IT, small number of local market players, increasing focus on eHealth and digitisation

Sub-Saharan AfricaLimited current government spending on healthcare IT, increases planned in the future. Private sector developing increasing focus on eHealth. Moderate number of players mainly operating from South Africa.

Brazil & MexicoTwo largest healthcare markets in Latin America and growing at a sustained pace

Venezuela & ColombiaConstituting part of the Andean Region are the fastest growing countries in many HC categories due to large public investment

IsraelComputerized HMOs. Project to determine regulations/law for national EHR

04/19/2317

PESTLE Analysis – Timeline

Increase influence by regulatory bodiesPOLITICAL Increasing harmonisationGrowing Political Focus and Pressure on Healthcare

Spend per capita on health globally grows

ECONOMICDivide between the EU, US and rest of the world grows

Global ‘Not for Profit’ PharmaSupply for developing countries

Reduction in pharma growth(business model changes)

Patient Centric Healthcare

SOCIAL Increasing pressure from patient groupsHealth awareness (prevention)

Ageing population

InternetTECHNO-LOGICAL

Information Based Systems

LEGALTherapeutics>Theranostics (Rx/Dx)

ENVIRON-MENTAL

Mergers and Acquisitions

Personalised healthcareMedical Ethics Health educationRaised consumer expectations Increasing customer awareness

Pharmacogenomics

Drug Design

Genomic Drugs

Health card / Smart CardsCombined diagnostics and therapeutics

Customised treatments

Direct to Patient Advertising

Biogenerics/biosimilars

Privacy

Faster Drug Approvals Medical Errors / Safety

Genetic Discrimination

Biotech companies transition to Pharma companies

Development of specialist therapy providers

Impact of HIV and other pandemics

2010 20202015

04/19/2318

Opportunity Analysis – Major Areas (Europe), 2010-2012

ProjectedRevenuesIn 2012

($ Billions)

High Revenues

Low Revenues

Growth Rate (2010-2012)

Low High