1. Issues related to poor IP protection in EMs: Pharmaceutical Example Rob May Commercial Director, Janssen, EMEA Emerging Markets

2. Innovation in the Pharmaceutical Industry* New drug development takes an average of 10–15 years Cost of drug development has risen from an average $800M per drug in 2003 to $2.6B in 2014 Pharmaceutical companies invest 17-22% of sales into R&D; other manufacturing companies usually invest <5% A strong intellectual property rights system encourages investment in innovation *Pharmaceutical Research & Manufacturers of America Pharmaceutical innovation has accounted for 73% of the total global increase in life expectancy between 2000 and 2009

3. Issue 1: Loss of Sales / Access to Medicines Length of IP / data exclusivity only allows for short period of time to recoup cost of R&D and make profit Innovative R&D companies expect generic companies to enter markets a significantly lower prices once IP has ended Without protected IP rights in country: – Innovative R&D companies may choose not launch products in country – This could reduce access to important medicines Example: India – Courts have denied innovative R&D companies patent protection for many innovative products – Public health is used as a pretext for giving domestic drug makers a ‘free ride’ on innovative R&D Example: Sub-Saharan Africa – Indian / Chinese generics allowed to enter markets by regulators, prior to original products entering – PMGMAN estimate that the cost of IP infringement to the pharmaceutical sector in Nigeria is US$ 233 million

4. Issue 2: Counterfeit Unless strong IP rights and regulations in place, counterfeit will proliferate The Health and Economic Effects of Counterfeit Drugs, Am Health Drug Benefits. 2014

5. Issue 3: Product Quality & Safety Safe, effective and high-quality medical products are essential to positive and equitable health outcomes for all Counterfeit and poor quality medicines are a real and urgent threat to human health, now becoming a pandemic problem; including the undermining of decades of successful efforts to combat HIV/AIDS, malaria, TB – Scientists report up to 41% of specimens failed to meet quality standards in global studies – In 2013, an estimated 122,350 deaths in children under 5 years of age in 39 sub-Saharan African countries were associated with the consumption of poor-quality antimalarials, representing 4% of all under-five deaths – Leading to increased morbidity and mortality when no active ingredient is present – Increased microbial resistance, when active drug is in low amounts in the product – Socioeconomic losses and loss of public trust are associated with poor-quality medicines, all of which jeopardize years of global public health success and investments American Journal of Tropical Medicine and Hygiene, “The pandemic of falsified medicines, 2015

6. Conclusion Upholding IP rights through strong policy, enforced regulation and including the prosecution of counterfeiters will: – Ensure patients receive quality products enhancing health and well-being of populations – Increase access to needed innovative medicines in Emerging Markets