1. Michelle Boudreau, Vice President, Private Markets, March 11, 2015 Presentation to CADA

2. Who we are Medicines in context Regulatory environment Complex path to access Discussion

3. Our Members

4. Over 50 research-based companies (international and Canadian start-up) Account for 46,000 Canadians jobs (direct and indirect) Annually invest over $1B into pharmaceutical R&D and related activities 3,000+ clinical trials across Canada $750M into hospitals/communities Annually contribute $3B to GDP Support a vibrant and national life-sciences community Rx&D: Who We Are

5. Life Science Clusters

6. Canadian Footprint: Economic

7. Life expectancy in Canada 19145257 20148084 Public Health partner in newborn, school-age, seasonal and pandemic vaccination efforts Steady increases in cancer, cardiovascular, diabetes, HIV/AIDs and other disease survival rates due to new innovative therapies – Cancer survival rates, especially in prostate, breast, lung and colorectal cancers have declined steadily since Canada’s peak of deaths/1,000 in 1988 Total Rx medicines spend (public & private) in Canada -- 6.2%* * PMPRB/CIHI derivation -- 2012 Rx Medicines in Context

8. Developed in 1988 Promotes Reputation and Trust Demonstrates value and builds the reputation of the industry with key stakeholders Helps us communicate the high standards we set ourselves as an industry Embrace Ethics and Transparency

9. 8 – 10 years Drug discoveryPreclinicalClinical trials Regulatory review Scale-up to manufacturing Market exclusivity One approved drug 0.5–2 years6–7 years 3–6 years Number of volunteers Phase 1 Phase 2 Phase 3 5250~ 5,000 – 10,000 compounds Pre-discovery 20–100100–5001,000–5,000 Clinical investigation Regulatory submission High-risk research: more than $1 billion over 10–15 years Market exclusivity following approval: 8-10 years * Adapted from: Drug Discovery and Development: Understanding the R&D Process, www.innovation.org;www.innovation.org DiMasi et al. Managerial and Decision Economics 2007; 28:469-79. Health Canada PMPRB HTA: CDR/pCODR Private Payers PCPA Discovery to Development to Patients

10. Regulatory environment – Health Canada – at a glance Authorization to conduct clinical trials Authorization to sell Post-market monitoring Establishment licenses Abreviated submission processes for changes, any new indications Oversight on labelling Restrictions on advertising Transparency of compliance 10

11. access vendor-credentialing price-freezes private-plans PMPRB investment regulatory barriers queuing PCPA HTA CADTH regulatory barriers transparency reputation shortages IP pCODR Industry Challenges

12. Drug Development Health Canada Review Patented Medicine Prices Review Board Health Technology Assessment Hospitals Patient Access Complex pathway to patient access Private Drug PlansProvincial Drug PlansPCPA

13. Questions and Discussion

14. Extra slides 14

15. PMPI – Lower than CPI 24 of 26 years

16. 16 Prices – Lower than International Median

17. 17 Rx Meds -- % over last five years

18. Sources: OECD Health Data, *1980-2009; ** 1970-2009, ***1995-2009; *****1990-2004; Canadian Cancer Society, Canadian Cancer Statistics, ****1986-2012. Value of Medicines: Life and Longevity

19. Sources: OECD Health Data, *1980-2009; ** 1970-2009, ***1995-2009; *****1990-2004; Canadian Cancer Society, Canadian Cancer Statistics, ****1986-2012. Value of Medicines: System Impacts Fewer days in hospital: Canada Source: OECD Health Data 2012, 1980-2009, except **: 1986-2008.

20. Broader Society Broader Economy Health Spending Health Status Better Health Outcomes Superior clinical outcomes and prevent downstream complication Better SE profile Better adherence Health Spending Decreased need for adjacent health services Increased efficiency in health care resources Better value compared to alternative therapies Broader Economy Productivity gains Reduced disability and absenteeism claims Broader Society Better quality of life for patients and for the informal caregivers Value of Medicines

21. 50% According to the WHO 50% of patients don’t take their medications and 33% never even fill their first prescription $290 New England health care Institute (NEHI) estimates that overall poor adherence cost as much as $290 billion/year 3.5X Non-adherent chronic diseases patients cost their plan 3.5X more in claims Source: Adherence to long-term therapies, Evidence for action, World Health Organization, 2003 NEHI, How many more studies will it take? A collection of evidence that our health care system can do better, 2008 Green Shield, GSC 2013 Drug Study, the inside story, 2013 The Cost of Non-Adherence