【正文】 equired Funding Products to be supported by the Broad Market Test Initiatives Main Focus (in order of priority) ? Motilium ? GynoDaktarin ? Sibelium TagOns ? Pevisone ? Daktarin Potential Pilot Test Sales Opex Impact D i s t r i b u t i on P h ar m ac y T u r b o( R M B m i l l i on ) P u s h C i t y C ou n t y C i t y P l u s C M E T ot alX JP of p i l ot c i t i e s 8 4 4 4 4N T S / c i t y ( M c k . E s t ) R i s k A d j u s t m e n t 70% 70% 70% 70% 50%A d j u s t e d N T S / C i t y T ot al N T S C on t r i . C os t / C i t y * T ot al O p e x H os p i t al S e e d i n g How to measure? ? Pre and Post survey to measure the change ? Monthly survey to monitor the change in customers attitude and sales off take ? Monthly report from sales reps. / supervisors / project leader for qualitative feedback ? Senior consumer research manager will be responsible for the tracking study 。 McKinsey analysis Cost of sporanox as a STD drug RMB FOR SPORANOX, XJP SHOULD CONTINUE TO FOCUS ON HOSPITALS … Retail pharmacy Hospital Clinic Source: Distributor interviews。 physician interviews。 third, patients are usually familiar with me and they will feel awkword.” —— Zhangyongxin town level clinic interview Yantai ~ 1 0~5~0~ 6 0~ 4 0~ 2 0~ 3 0~ 5 581997 1999 2023 Retail Pharmacy Hospital Clinic Jining ESTIMATE IN ADDITION, GYNO DAKTARIN NEEDS TO GROW THE MARKET SHARE ESPECIALLY THOSE OF COUNTY AND TOWN Source: Distributor interviews。 retail pharmacy interviews。 McKinsey analysis FOR GI DISFUNCTION DRUGS AS A WHOLE THERE IS SIGNIFICANT LATENT DEMAND。 focus group。 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 Jining For those with insurance, they can use their personal accounts (~RMB 100~300 per year) to cover their broad market drug expense In loosely controlled region (like Yantai), patients can treat the personal accounts as savings account Patients pay on their own after the account balance is zero A majority of population does not have insurance They pay broad market drugs by themselves Insured Selfpay Total City County Town Village 35 9597 2030 7080 1015 8590 1 99 0 100 Source: Interview。 McKinsey analysis Clinics’ share in total drug sales Percent Overall County Town Village 36% 26 34 100 Sichuan Shandong City 8 27% 8 27 100 3 XJP should think about costeffective way to lock in individual clinic/barefoot doctors . Category Review 100~ 2 0~ 2 0~5~ 4 0~ 3 0~ 3 0 * More than half of patients going to large hospitals will purchase drug at retail pharmacies ** Branded generic drugs referring to generic drugs that run advertising, creating brand awareness in consumers Source: Physician and pharmacy interviews。 hospital pharmacy interviews。 second, I don’t have facilities to check the body in the clinic。 McKinsey analysis ~0~0 ~130~ 5 0~ 1 0~ 5 0~ 7 0~ 9 01997 1999 2023 Retail Pharmacy Hospital Clinic “ We gradually carry some Tinea Unquium drugs in these years. Because more and more patients, although still quite small in amount, e here to ask for Liangjia after seeing its advertisement. I think most patients still go to hospital for treatment.” —— Jining Kangfu pharmacy “ I seldom see Tinea Unquium patients. And also, because the drugs are very expensive, I didn’t carry them. If there is really someone e to my clinic, I will suggest them to pharmacy.” —— Yantai clinic interview Yantai ~5~5~0~ 2 0~ 1 5~ 1 0~ 7 5~ 8 0~ 9 01997 1999 2023 Retail Pharmacy Hospital Clinic Jining 25444 * Others including around five drugs, such as Huihuangmeisu（ 灰黃霉素） , Lisulao（ 里素勞） ,Lianghuija（ 亮灰甲） etc. Source: Distributor interviews。 LIANGJIA IS DOING BETTER THAN SPORANOX AT RETAIL PHARMACIES DUE TO HEAVY ADVERTISING City Total Retail pharmacy Hospital 33402573210398203111514%25%29%26%Clinic County Share of leading drugs within Tinea Unquium – Yantai 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 th