The New Economic Landscape Brian W Tempest CEO & Managing Director Ranbaxy Laboratories Limited, India The Pharmaceutical Industry in the 21 st Century : Is India Challenging the R&D Business Model? Chatham House, London, January 2005

RANBAXY Source: CSO, China National Bureau of Statistics, Morgan Stanley Research The New Asia

RANBAXY Largest Economies in 2050 Source: Global Economics Paper No:118 by Goldman Sachs 14-Oct-04

RANBAXY Source: Global Economics Paper No:118 by Goldman Sachs 14-Oct-04 Number, millions A Dramatic Rise in China and India’s Middle Classes

RANBAXY Source: Central Statistical Organization of India (CSO), Morgan Stanley Research Indian GDP Growth

RANBAXY Advantage India # of Co’s listed on the BSE second only to NYSE 4 out of 10 silicon valley startups run by Indians 2 nd largest pool of scientists & engineers in the world 220 out of the Fortune 500 Co’s outsource IT work here ~ 15% of scientists in Big Pharma are of Indian origin Source : CLSA India Paradox Report, 2003

RANBAXY The Chrysler Example For each mid size car Daimler Chrysler AG builds at one of its plants, the Company pays $1,300 to cover employee healthcare costs, more than twice the cost of the sheet metal in the vehicle * Source : IMS presentation at the IGPA Conference in Prague, June (Covers both present and retired employee’s with family) By Kirsten Downey Washington Post Staff Writer Saturday, March 6, 2004 Pg E01

RANBAXY Cost of Health Cost of non pharma healthcare High cost innovative medicines Across USA, EU & Japan Source: Deutsche Bank and SSB Research, 2002, OECD Health Data rd Ed. USA France UK Spain Germany RANBAXY Healthcare Expenditure of select countries (% to GDP)

RANBAXY Cost of Health and Age Source: Deutsche Bank Research, July 2002,OECD Health Data rd Ed.

RANBAXY Issues facing Big Pharma Increasing R&D costs Product withdrawals e.g. Vioxx Re-importation of prescription drugs Drug shortages in hospitals in USA Pressure on earnings

RANBAXY India Competitive Advantages 1.Aggressive Home Market

RANBAXY India Competitive Advantages 2.Cost of Manufacture Active Pharmaceuticals Facility, MohaliDosage Forms Facility, Paonta Sahib Highest # of FDA approved plants outside the US * Drug Master File 1/3 rd of all DMF* filings with the FDA

RANBAXY India Competitive Advantages 3.Cost of Innovation India’s inherent strength in Chemistry Mathematics Ranbaxy R & D Center – I Ranbaxy R & D Center – II

RANBAXY The Productivity Advantage India USA 1 chemist FTE 1 chemist FTE 70 h/week 50 h/week $ 800 monthly $ 12,000 monthly Better education x 1,3 Longer working time x 1,3 Lower cost x 20 Source: IPHMR Conference, New Delhi August 2004

RANBAXY UnileverEmerson Electric Tyco Electronics Eli Lilly Texas InstrumentsDaimler Chrysler QualcommDuPont Monsanto D-Link McDonald’s Delphi Intel Danisco Cultor HoneywellCummins HP Colgate Palmolive General MotorsBell Labs GE Akzo Nobel Source: CLSA Emerging Markets MNC owned R&D centers in India

RANBAXY Ranbaxy R&D Organization 115,000 MSc Scientists & 12,000 PhD's in Chemistry every year > 1000 Scientists in R&D 22 from US / EU in 2003

RANBAXY India Geographic Footprint US$ 972 Mn US$ 475 Mn US$ 2 Bn* US$ 1178 Mn * Estimated

RANBAXY Global Human Bridge Leading to shareholder wealth

RANBAXY Innovation - Our own example BD / TD product with no OD solution FDA APPROVAL USA product prescriptions begin Licensing out to patent holder Full product development in the USA Discovery & patenting by Indian Pharma company 4-5 Years Royalty to Indian Pharma company Product gains ~ 15% market share Cipro XR

Thank You Brian W Tempest CEO & Managing Director Ranbaxy Laboratories Limited, India The Pharmaceutical Industry in the 21 st Century : Is India Challenging the R&D Business Model Chatham House, London, January 2005