Thank you for the insightful presentation on the evolving RMA opportunities in Iberia and Latin America. This was a comprehensive overview of the key markets, regulations, and opportunities across the different countries. I appreciate you taking the time to share your expertise.

1. The evolving RMA opportunities in
IBERIA and LATAM
PRESENTED BY JOSÉ MIGUEL FERNÁNDEZ
NOVEMBER 2010
TO
PAREXEL

2. Some interesting facts and figures
Year 2008
Argentina Brazil Colombia Chile Mexico Portugal Spain
Country
Serie
Total expenditure on health, %
of gross domestic product 9,8 8,4 5,9 6,9 5,9 10,1 9
Total health expenditure per
capita, US$ PPP 801 904 518 999 852 2334 2902
Pharmaceutical expenditure, %
total expenditure on health 11,7 12,2 9,9 5,4 28,3 22,8 20,5
Pharmaceutical expenditure per
capita, US$ PPP 93,72 110,29 51,28 53,95 241,12 532,15 596
Year 2006
Argentina Brazil Colombia Chile Mexico Portugal Spain
Country
Serie
Total expenditure on health, %
of gross domestic product 10,2 8,5 6,2 5,9 5,7 9,9 8,4
Total health expenditure per
capita, US$ PPP 561 765 483 772 761 2151 2477
Pharmaceutical expenditure, %
total expenditure on health N/A 11 9,2 4,7 26,3 21,8 21,6
Pharmaceutical expenditure per
capita, US$ PPP N/A 84,15 44,44 36,28 200 469 535
Sources: WHO, WTO, UN, and local statistics agencies

3. More interesting facts and figures
General Goverment Whole Region Brazil vs. Spain
expend in health /
Total health
expenditure in % -
AVERAGE in Region-
Western Europe 73,6 71,7
LATAM 47,7 33,9
• Causes:
• LATAM’s low efficiency model => high out of the pocket spent
• Private coverage has been steadily growing in LATAM
• But…there are also signs of a trend reversal
• Colombia & Argentina look to have universal coverage and
• More stable / new, P&R schemas

4. The key drivers in population / economics
Country Economic Population HIV prevalence in Politics
(Million People) adults %
2009
Spain GDP contraction expected 46.5 0.33 Uncertainty with local
to last until 2012 elections to be held in May
2011
Portugal Flat GDP growth since ’06 10.7 0.55 Minority Socialist Gvmnt
pendant to release
reforms
Argentina Possitive, though weak 40.9 0.5 Presidential election to be
outlook for 2011 called in 2011
Brazil Strong growth supported 199 0.6 Stability under Lula’s
by foreign investment and heritage
commodities
Chile Strong recovery, but 16.7 0.3 Stability with new cabinet
mainly due to high copper just one year ago
market prices
Colombia Flat GDP growth in 2010, 45.7 0.6 New president and
better outlook in 2011, FARC’s surrender would
though weak. comfort investors.
Mexico Flat GDP growth set up for 111.2 0.4 Chain of elections starting
2011, pushed by the in 2011, battered by
weakness of US demand terrorism.

5. The pharma market in the countries
Country Market Size, 2009 Main Payers Regulation (strong, Others (local
(Millio USD @ weak, medium) and characteristics)
exchange ratio) P&R schema
Spain 25,6 Regional Goverments and According to EMEA and Price and Reimbursement
private insurance (12%) ICH standards. AGEMED is made up by the
is the P&R Ministry Arm. Ministry but payers are
STRONG. regional gvmt
Portugal 5,04 Ministry of Health, few INFARMED is the state Few local players, and
private insurance market agency which follows increasing dominance of
share stringent rules to allow generics
drug approval.
Argentina 3,37 Three layers, 22% APS, No active control until Strong local players. P&R
34% semiprivate, 43% late 2009. OTC is strong. only since 2009
private OOP
Brazil 15,1 SUS and other public Strict SUS and Ministerio Goverment to breach
system (75%), private de Saude Control. TRIPS agreements if
insurance (25%) . OOP. Preference to generics / needed (HIV pandemy)
bioequivalents
Chile 1,15 Public Schema, FONASA, No P&R schema to Strong local players; lack
50%, private insurance, «stimulate» competition. of price cap, lowest prices
ISAPRE, 20%, 30% OOP in region.
and others
Colombia 2,24 54% Public Social Security Only for 5% of drugs, for Recent trade agreement
Schema, 26% OOP, 20% the rest, only partial with US to ease exports.
private insurance. reimbursement. Second fastest growing in
region
Mexico 15,5 Private Insurance (3%), No formal P&R schema. Counterfeiting is rampant
Social Security (IMSS and But buying method is . New regulations for
others, 61%), rest (non always public tenders. access to antibiotics put in
workers, SSA, 36%) place, late 2009
(prescription)

6. SWOTs per country. Spain.
Strenghts Weaknesses
• Well developped Health • Budget deficit imposing
Coverage System drastic measurements in
• Well structured P&R P&R schema
schema. • Generics are rapidly
• Wide range of pharma labs, growing
with strong local players to • Complex payers system
support (15+ regional)
• C/E awareness rising
Opportunities Threats
• Education for medium size and • Goverment plans to further cuts
local pharma labs (outsourcing) on P&R-> rising unemployment
• Biotech labs are increasingly in Pharma
rising • Change on politics every 4 years.
• MDs education (need it) in Payers and Administrators too
Pharma Economics. linked to politicians
• Partnering with Ministry of • Consolidation in the market,
Health / local administrations living only niche local players.
• Orphan drugs, actively
supported by Ministry of Health

7. SWOTs per country. Portugal.
Strenghts Weaknesses
• Well developped Health • Budget deficit imposing
Coverage System drastic measurements in
• Well structured P&R P&R schema
schema. • Generics are rapidly
• Only one interface, growing
Infarmed. • Local players dissapearing.
• Well educated system
(influenced by NHS and
NICE guidelines)
Opportunities Threats
• Education for medium size and • Goverment plans to further cuts
local pharma labs (outsourcing) on P&R-> rising unemployment
• Medical Devices and nano- in Pharma
medicine start ups and some • Consolidation in the market,
established companies. living only niche local players.
• MDs education (need it) in • Decissions to be taken from
Pharma Economics. abroad (at multinational level)
• Orphan drugs manufacturers

8. SWOTs per country. Argentina
Strenghts Weaknesses
• Many Local players • Fragmented and poor
(majority of the market) perceived health system
now dealing with P&R • Generics and copy-cut
regulation dominants
• Market Size to grow by near • P&R and market access just
double digit in next years. trying to be established
Opportunities Threats
• Education for medium size and • Political unstability, with
local pharma labs (outsourcing) elections to be called in 2011
• Some consulting to goverment,
insurance companies. • Fraud and OOP expenditure.

9. SWOTs per country. Chile
Strenghts Weaknesses
• Many Local players • Generics and copy-cut
(majority of the market) dominants
• Well perceived Health • No P&R schema.
Insurance System, with • Market Access is done via
coexistence of private and tenders and public bids
public schema. mainly.
• Stability. • Insurance companies
favouring local players.
• Poor market attractiveness
(CAGR expected to be low).
Opportunities Threats
• Education for medium size and • Chile is on the warning list for
local pharma labs and non ICH and GSP rules total
distributors (outsourcing), compliance.
specially because a large number • Pharma distribution is owned by
of production is exported. few private groups.
• Low prices (lowest in the region)

10. SWOTs per country. Colombia
Strenghts Weaknesses
• Mix of local and foreign • Generics and copy-cut
players. dominants
• Trading agreement with US • No P&R schema (only for
now opening entry to new 5% of listed drugs)
players and increasing • Insurance companies
market value. favouring local players.
• CAGR expected to be above • Regulations are not clear
double digit in next four enough.
years. • Too much OOP expend.
Opportunities Threats
• Education for foreign exporters • Political theatre is not yet clear.
(there are some good ones), but • Many population with no
focused on generics and copy practical access to health
cats. system.
• Insurance Companies for foreigh • Poor distribution chain.
firms.
• Orphan drugs

11. SWOTs per country. Brazil
Strenghts Weaknesses
• Mix of local and foreign players. • Generics and copy-cut dominants
• 2nd largest market in the region. • Too much OOP expend.
• CAGR for the pharmaceutical • Fragmented market as per the
market expected to be above payers schema (market access),
double digit in next four years. local; regional, nationwide –
• Abundant resources (MDs, almost 25% of the expend is private
students, start ups). and OOP-.
• Political momentum • TRIPS provisions not always
• P&R stringent but clear respected
• Clear goverment agenda
(Milenium Objectives)
Opportunities Threats
• Biotech and small firms (local ones) • Generics favoured and patent
• HIV and Oncology manufacturers infringement (TRIPs breach)
• Orphan drugs • Many population with no practical access
to health system.
• Poor distribution chain.

12. SWOTs per country. Mexico
Strenghts Weaknesses
• Largest market in the region. • Counterfeiting and smuggling to
• CAGR for the pharmaceutical USA
market expected to be above • Too much OOP expend.
double digit in next four years. • No P&R schema.
• Foreign trade agreements and • Entry barriers for foreign
NAFTA. manufacturers.
• Awareness of Market Access
policies
• High healt expend by head
Opportunities Threats
• Foreign small manufacturers • Politics
• Insurance Companies • Lack of reliable data.
• Monterrey accumulates many of the • Many population with no practical access
pharma industry. to health system.
• Exporters to other markets –as market • Distribution chain owned by few players,
access-. even from abroad.

13. Summary
• Market attractiveness varies enormously within the considered region
• LATAM is heading to open its market but still some countries are heavily
Protective (Chile).
• CopyCats and Generics are starting to flood the market –all countries-.
• Spain and Portugal are facing with increasing aging population, so, it is
Expected that Health Expenditure Growth would be inmense in following
Years
• In contrast, LATAM, specially Brazil and Colombia, has plenty of young
Population, who will demand better and more qualified Health Coverage.
• Local players are strong in some countries, whilst in others are on the
Verge of dissapear (Portugal) or simply distributing products.
• Orphan drugs and biotech are really an opportunity in Spain and Brazil
• Pharmaeconomics are used for the sake of decissions in a very limited scale in
Chile, Colombia, Argentina, and at a large scale in Spain, Portugal, Brazil –
starting to develop- and increasingly, Mexico.
• Market attractiveness makes me think the better countries to start with
Are…Spain, Brazil, Mexico, letting the others go at this stage.
• But Parexel could also leverage existing knowledge in ICH / GSP into the
region, to attract future businesses.

14. Bonus. Spanish Market Access Schema

15. Model is Changing. New ecosystem

16. Model is Changing. The Environment

17. Functional Matrix. Hospital health administrators
Administration
Prescription Pharmacy Budget
and price
Drug evaluation evaluation and Management and
management
track Control
(tenders as well)
Specialized Pharmacists/regional
evaluators
Pharmacy Manager/regional board
chair
Medical Director/Ward Unit
Director
Finance and Admin Managers
(CFO)
Regional Administration and GPOs
Project focus within dashed line

18. Hospital Drug Evaluation Process
Multi-Tiered process though not sequential
Regional Level: Across Hospitals: Intra-hospital:
• Regional Agencies Spanish Hospital Pharmacists Society Specialty Board
*Joint Commission (Genesis) Pharmacy Board
*Non-binding recommendations Very Influential guides Protocols review
Binding documents
Genesis Group is becoming a very powerful C.O.P. to standardise drug review and evaluation

19. Hospital Working Model and Lines of Influence:
Hospital Drug evaluation process
(Customer Process)
Solid lines= strong interaction
External
Dashed lines= weak interaction
influences
Green
New Ligth to
petitory
Drug 1-6 months
ATB/Oncology
Pharmacy
Commision
Board
Outcomes R.
Sales Reps K.A.M.
Product Physician/Mktg Outcomes R.

20. Q&A
 Any questions to discuss?
 THANKS