The Pharmaceutical Industry in Europe Key data INDUSTRY (EFPIA Total) (*) Production63,127121,311158,647170,000 (e) Exports23,18089,443144,022170,000 (e) Imports16,11362,810108,063130,000 (e) Trade balance7,06726,63335,95940,000 (e) R&D expenditure7,94117,66120,16421,100 (e) Employment (units)500,762540,106588,091588,000 (e) R&D employment (units)76,28787,625100,503100,500 (e) Pharmaceutical market value at ex- factory prices 43,00586,696104,180111,500 (e) Values in € million unless otherwise stated (*) Excluding Turkey Source: EFPIA member associations (official figures) – (e): EFPIA estimate

European total pharmaceutical exports, imports & trade balance (€ million) Note:Data 2003: EFPIA estimate Data based on SITC 54 Source:EFPIA Member Associations (official figures)

EU Trade balance – High technology sectors (€ million) – 2002 Source: Eurostat, SITC 54

Source: IMS World Review 2004 Breakdown of the world pharmaceutical market – 2003 sales

Breakdown of the world pharmaceutical market Total pharmaceutical market value 1990: 135,900 million Euros 173,000 million Dollars Total pharmaceutical market value 2003: 412,290 million Euros 466,300 million Dollars Source: IMS World Review 2004

Total pharmacy market (at ex-factory prices) Average annual growth rate Source: EFPIA member associations, PhRMA, JPMA

New Molecular Entities Source: SCRIP Publications - EFPIA calculations (according to nationality of mother company)

Pharmaceutical R&D expenditure in Europe, USA and Japan, € million, 2002 constant exchange rates Data 2003: estimate EFPIA & PhRMA Source: EFPIA member associations, PhRMA, JPMA

Pharmaceutical R&D expenditure in Europe, USA and Japan, Million of national currency units* * National currency units: Europe: € million; USA: $ million; Japan: ¥ milliion x 100 Data 2003: estimate EFPIA & PhRMA Source: EFPIA member associations, PhRMA, JPMA

Source: EFPIA, 2000 Location of R&D spending by EU companies

Biopharmaceuticals Europe versus USA (2002) EuropeUSA Turnover (€ million)8,73331,994 R&D expenditure (€ million) 5,27417,201 Net loss (€ million)2,9219,913 Number of public companies (units) Number of employees (units) 33,304142,900 Source: Ernst & Young, ‘Beyond Borders, The Global Biotechnology Report 2003’ (data relate to publicly traded companies)

Share of Global Biotechnology Revenues Publicly traded companies (2002) Note: Global revenues of € million 43,730 (USA: 31,994; Europe: 8,733; Canada: 1,550; Asia/Pacific: 1,453) Source: Ernst & Young, ‘Beyond Borders, The Global Biotechnology Report 2003’

Share of Global Biotechnology R&D Expenses Publicly traded companies (2002) Note: Global R&D expenses of € million 23,269 (USA: 17,201; Europe: 5,274; Canada: 586; Asia/Pacific: 208) Source: Ernst & Young, ‘Beyond Borders, The Global Biotechnology Report 2003’

Source: CMR International Number of new molecular entities (NMEs) and biotechnology products first launched worldwide

R&D as a percentage of sales Source: EFPIA Member Associations (official figures) – (e): EFPIA estimate

Number of Drugs in active R&D Source: SCRIP, May 2003

EU / US ‘Global’ Environment USA Basic patent (20 years) Patent Term Restoration – max 5 years, 1984 Biotech Patent, 1983 Orphan Drug Act, 1984 Same levels of IPRs across all States Bayh-Dole Act + National Institutes for Health Economic environment (direct access to a large unified market; competitive market pricing) EUROPE Basic patent (20 years) SPC – max 5 years, 1992 Biotech Patent 2000-yet to be applied in 8 MS Orphan Drug Reg., 2000 Lower IPRs in some EU MS (+ EU enlargement) European Framework Research Programme Economic environment (no direct market access; price controls; free movement of goods)

R&D Expenditure as a percentage of GDP (2002) Note:Greece, Italy, Japan, The Netherlands, Switzerland: 2000 data; Belgium, Denmark, Germany, Ireland, Portugal, Spain, Sweden, Acceding countries: 2001 data Source:EUROSTAT & DG Research, ‘Statistics on Science and Technology in Europe: data ’, February 2004; Swiss Federal Statistical Office (Switzerland)

70 % USA 18 % Europe 4 % Japan 8 % ROW Innovation – Market penetration Geographical breakdown (by main markets) of sales of new medicines launched during the period Source: IMS, 2003

Product life cycle in US and Europe Time Sales Europe US Delay in Market Access Utilisation and Price Level Generic competition Source: GSK European policies do not reward innovation but neutralise generic competition

Share of Parallel Imports in Pharmacy Market Sales (%) % Note: Denmark, Germany, The Netherlands, Norway, Sweden, UK: Data 2002 Norway: share of total market sales (estimate) Source: EFPIA Member Associations

Total market sales (at ex-factory prices) in EU acceding countries (2002 – € Million) Note: Bulgaria, Estonia, Latvia, Lithuania: pharmacy sales only Source: IMS Health

EU Acceding & Candidate Countries GDP per capita (PPS) - € 2002 Source: Eurostat, Statistics in Focus 47/2003

Delays From Pricing And/Or Reimbursement Application To Reimbursement Belgium Greece Portugal France Austria Finland Italy Norway Spain Netherlands Switzerland Sweden Denmark Ireland Germany UK (Days) Increasing overall delay P&R PricingReimbursement Publication 180 days90 days In Belgium - until January 2002, the transparency commission process had to be conducted before a company could apply for reimbursement of a given product. In France, only ambulatory care products have been included in this analysis. In Italy and Sweden the pricing and/or reimbursement procedure can start as soon as CPMP opinion is available (for centrally approved medicines). This analysis does not reflect the impact of recent reforms in Italy. In Spain anecdotal evidence suggests that delays have increased recently. In Switzerland a more comprehensive study concerning 191 files shows an average delay over 180 days. Finland has a two-tier reimbursement system, with a slower process for treatments of chronic diseases (reimbursed at 75%) and serious or life-threatening diseases, and a faster one for acute diseases. Delays shown in this study do not reflect this distinction, and actual pricing and reimbursement delays are typically longer for medicines in the 75%/100% reimbursement categories