【正文】 TC CME team. Local sales team will provide coordinating support ? Workshop holds once a year in each county ? Target audience is clinic/barefoot doctors ? Focused drug include Motilium, Daktarin, Pevison, and Sibelium ? Leverage local healthcare authority and associations to reach mass number of clinic/barefoot doctors “ Distributor work to county level” ? One rep per region, covering all county No. 1 distributors ? Rewrite distributor contract ? Leverage distributor work and push distributor staff to reach the villages/clinics ? “Sweeties” to distributor could include information system support, training, and distributor club ? “Sweeties” to distributor staff could include travel for star staff and training Comments on the McKinsey Proposed Initiatives Hospital Seeding Besides testing the idea to conduct professional detailing to the county hospitals, we also want to provide coverage among the smaller hospitals (Tier I amp。 McKinsey analysis Sales by strata Mn RMB, % Sporanox Lanmeishu*(蘭美抒 ) Liangjia(亮甲 ) City Tinea Unquium drugs 44 54 48 50 2 53 47 1 67 29 2 4 0 1 1 0 YANTAI amp。 McKinsey analysis Sales by channel Mn RMB, % Sporanox Lanmeishu* (蘭美抒 ) Liangjia (亮甲 ) Tinea Unquium 65 33 69 30 1 84 15 0 12 87 2 2 YANTAI amp。 Jining Mn RMB, % 575461857427101417005%12%25%22%Total Retail pharmacy Hospital Clinic 100%= Sporanox Lanmeishu* (蘭美抒 ) Liangjia (亮甲 ) Others Liangjia has relatively high market share in retail pharmacies At city level, Lanmeishu has 31% of hospital channel, better than Sporanox Hospital at county level and above should be the main focus PRICE IS A HUGE ISSUE FOR SPORANOX Sporanox is too expensive for most farmers whose annual ine is only around RMB 2,000 Even at county level, cost of using sporanox for effective treatment is higher than total drug expense per year for an average person 15 20~ 4 2 0~ 2 0 0~ 8 0~ 5 0 0County level price threashold City level price threashold County level annual drug expense per person Average insurance allowance per year Cost of sporanox as a derma drug Source: Interviews。 physician interviews。 physician interviews。s heavy advertising Only around 10 % of those seeking treatment purchase drugs Only 1% would follow prescription Total incidence* Do not seek treatment Seek treatment Not aware 100~5~0~5~ 1 0~ 7 0~ 2 0 * The incidence rate is around 5% in Shandong Source: Physician and pharmacy interviews。 hospital pharmacy interviews。 Retail pharmacy interviews。 hospital pharmacy interviews。 hospital pharmacy interviews。 Famotidine Source: Distributor interviews。 PEOPLE GENERALLY SEEK TREATMENT IN CLINICS AND PHARMACIES Latent market demand 60% of total patients do not seek any treatment As market leader, increasing awareness for Motilium to further boost treatment rate is one of the key demand levers Small clinics and pharmacies are important channels 75% of patients seeking treatment go to clinics and pharmacies Total incidence Do not seek treatment Go to large hospital* Go to small clinic Self medicate at pharmacy Seek treatment Not aware Percent Motilium’s market share Motilium has a vast room for grow because of significant leakage along the patient flow 60% of GI patients that do seek treatment Current market share of 4% which could be grown further Among the 40% people who seek GI treatment, about 30% would buy banded generic drugs**, while the rest would buy nonbrand generic drugs % FOR GI DRUGS, POLARIZATION IS BECOMING MORE OBVIOUS Anecdotes Quantitative examples SubTA sales by channel Percent Source: Hospital pharmacy interviews。 McKinsey analysis “ What makes you change your perceived drugs?”* – Pharmacy patient survey Percent, Shandong city level 473716Perceived drug not available。 McKinsey analysis Drivers Increased price sensitivity Changed medical insurance policy Improved highway infrastructure Rich information access TV Newspaper Increased life pace No time to visit hospital Pharmaceutical market deregulation policy More and more pharmacies amp。 McKinsey analysis 19 19 1819162436393120 20 216 66%All 4 cities Broad market represents 94% of demand 100%= Bn RMB Shandong* Sichuan* 332122615242447381528157121%City 100%= 21 6 2 Mn RMB County Town Village Motilium Gyno Daktarin Sibelium** Broad market Sales breakdown of XJP product Percent Other channel at city level GDP per capita: of county 9,199 32 11,300 18 5,801 14 County is critical for broad market DUE TO LOW INSURANCE COVERAGE AND RECENT REIMBURSEMENT POLICIY CHANGES, MOST PATIENTS PAY BROAD MARKET DRUGS BY THEMSELVES Insurance coverage in Yantai amp。 Vertigo (Sibelium) ? provide objective assessment about the broad market opportunity (not including any urban centres)。 ? 4 product categories were included: . (Motilium), OBGY (Gyno.), Nail Infection (Sporanox) amp。 clinics。 McKinsey analysis PATIENTS GO TO PHARMACY/CLINICS FOR MINOR SYMPTOMS Source:Interview。 Focus group。 McKinsey analysis FOR GI DISFUNCTION DRUGS AS A WHOLE THERE IS SIGNIFICANT LATENT DEMAND