2018 Pricing Reform: Will Takeda Exit the Japanese Pharma Market? - PowerPoint PPT Presentation

2018 Pricing Reform: Will Takeda Exit the Japanese Pharma Market? Japan Pharma & Governance Tour: UBS Securities e-Projection K.K. July 12, 2018 e-Projection

Three Forces Determining the Direction of Healthcare Shape of the market will depend on the priorities and the balance of the forces Driver Industry Vehicle R&D Key Incentive RoI Driver Driver Authorities Patients&HCP Vehicle Vehicle P&MA Advocacy Key Incentive Key Incentive Fiscal discipline Well being e-Projection

Broken NHI System Casting a Shadow on Healthcare Structural and operational malfunction leading to de-prioritization of innovation Pricetags: way off the target Opdivo initial prices in different markets The Japanese pricing authorities’ inabilit lity a and unwi willin llingness t to value n new d drugs is harming Leaky: unhealthy healthcare innovation Others 1% Patient copay 11% Source of National Healthcare Funds (2015) Insurance premium Injection of public 49% funds 39% Source: MLHW statistics e-Projection

’18 Reform: Changing the Environment Dramatically Incentives were repealed without any compensative measures Initiatives Implications Revision of the Price Maintenance Deceleration in market • Premium growth of new drugs Frequency of price cuts increase • from biennial to annual Flexible re-pricing in response to Decreasing the • “Market Expansion” allowing massive consistency of the price cuts to happen anytime business Measures to estimate the intrinsic Possibility of erroneous • value of the products, e.g. HTA, initial prices granted failed to be implemented effectively e-Projection

Ramifications of the ’18 Pricing Reform Business prospects will deteriorate with low predictability early in the lifecycle Price dynamics over the life cycle of new drugs Price dynamics over the life cycle of new drugs Price dynamics over the life cycle of new drugs Prices of new drugs used to be maintained during Initial Price the lifecycle until LOE Prices will be reduced 100 100 100 significantly at LoE and then will be cut thereafter in line with competition 80 80 80 After ‘18, prices will be cut regardless of exclusivity 60 60 60 “Re-pricing” may happen at any arbitrary timing 40 40 40 and extent 20 20 20 0 0 0 1 1 1 2 2 2 3 3 3 4 4 4 5 5 5 6 6 6 7 7 7 8 8 8 9 9 9 10 10 10 11 11 11 12 12 12 13 13 13 14 14 14 15 15 15 Years post launch Years post launch Years post launch Loss of exclusivity e-Projection

Takeda: Time to say da svidania to Japan? e-Projection

From conjecture to confidence. Tosh Nagate Ph.D. MBA. CEO & Chief Analyst at e-Projection Consultant and pharmaceutical forecasting expert with global and local experience spanning across areas of commercial and R&D. Prior to being the president of e-Projection, he was a Director of Sales Forecasting and Analytics at Takeda Pharmaceuticals. Before Takeda, he worked at Abbvie, engaged in various positions in Global Marketing and the Japan affiliate. Relevant education includes Ph.D. in medicine from Shinshu University and MBA from University of Chicago Booth School of Business with honors. Website: http://e-projection.com/ E-mail: tosh.nagate@e-projection.com e-Projection