1. AIFA European Conference on Clinical Research for Decision Making Sergio Dompé - Farmindustria Rome, March 30th, 2007 Access to market by new medicines and pricing criteria

2. The discovery of new medicines Higher investments, lower "productivity", and higher rates of failure. Increased costs of clinical and general research to make new active ingredients available. Considerable medical progress: the focus is now on more complex areas and Research requires time Re-launch innovation is important. Pursuing projects and making the products accessible in Italy and in Europe is equally important. 1

3. Specific new challenges facing research Increase in innovative -medicine research costs (up to € 1 billion) Heightened complexity levels of R&D projects Higher degree of specialisation and division of innovative work on a worldwide scale The challenge is represented by the greater need for health. The tools to deal with it: greater commitment by the Companies, the development of new technologies and synergies for the life sciences, the creation of a network of skills, dialogue and cooperation with the institutions for a win-win strategy Source: ATA 2 R&D agreementAssegnee (n° per patent)

4. Biology Medicine Chemistry Physics Engineering Basic Research Clinical Research Applied Research Innovative technology New medicines New opportunities for interdisciplinary Research 3

5. BIOLOGICALS RNAi Genic therapy Pharmacogenic-SNP REWARD INNOVATION Higher Research costs Rewarding/incentivizing measures Ad-hoc legislation INNOVATION New cutting-edge technologies Interdisciplinary Research Competitiveness Spill-over into other sectors SOCIO-ECONOMIC IMPACT less hospitalisation (=savings) creating highly-qualified jobs higher turnover and tax revenue greater R&D investments generation of R&D clusters Private-Public Partnerships The virtuous Research cycle 4 Source: ATA

6. Highly interconnected network Strong presence of the private sector in the cluster in the coming years OPPORTUNITIES 5 2006 Milan: an example of a cluster of excellence in scientific Research Source: ATA

7. The value of innovation includes - Pharmacological and technological innovation - greater efficacy and tolerability - greater conformity to treatment - better life quality Breakthrough Innovation Incremental Innovation Apart from breakthroughs, innovation should be considered a continuous and multi-dimensional process (not duplication but evolution), an often cumulative development of many different actions and incremental improvements, including small incremental steps Innovation is not an absolute value (“black or white”, “it is or it isn't”) 6

8. How many values for innovation Therapeutic and clinical value Quality of life Social value Innovation Effective medicines for diseases not adequately treated or which, in terms of the therapeutic index, improve available treatments. Clinical advantages, such as side effects reduction, higher efficacy vis à vis existing treatments, better compliance. This means public health, measured in terms of economic benefits, such as medicines that can guarantee improvements for society (e.g. avoiding surgery, reducing hospitalization, slowing down the degenerative process of diseases) 7

9. Incentives to generate innovation with social value "Rewarding" reimbursement mechanisms: time to market price determination tax system and R&D incentives A stable legislative and regulatory framework, at a national and community level, to allow faster access to innovation and the recognition of its added value. 8

10. A pricing system to give leverage to Research and Innovation Multi-year agreement, that quantifies the commitment of companies, according to investments in preclinical and clinical research, production and exports, as well as the therapeutic value and growth in the portfolio of reimbursable products. For innovative products prices, reimbursement and access times comparable with those of the main European countries To enhance Research While the reference price should be avoided, as it penalises the patients, limits the physician's choice, only creates short-term savings, refers only to the commercial aspect of medicines and belittles their industrial and research aspects 9

11. Tax system and research incentives In the pharmaceutical sector, research is funded for more than 90% by companies (through their profits). In Italy profitability is squeezed by price cuts, high costs and the differential taxation applied to the industry The tax credit provided for by the Finance Act is a first positive signal important but still not sufficient to bridge the gap with other countries It is necessary to work towards a competitive re-equilibrium of the industry in Italy Reinforcing tax relief on R&D investments either private or those made to comply with public sector commissions (for which a 50% rate can be expected) 10

12. Innovation must be placed at the centre Innovation cannot ignore the European context in terms of price, reimbursement and access times. The commitment of all the actors in the Innovation System must go in the same direction and the state’s medicine policy must constantly provide incentives for companies that invest, in order not to nullify the efforts made (and waste resources). Innovation must be given leverage, and correct recognition and it should be able to count upon adequate resources. Its evaluation cannot be based on its financial compatibility with the Health System, that is, exclusively in terms of budgetary constraints and without a cost/benefit approach. 11