【正文】 hospital pharmacy interviews。 hospital pharmacy 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。 ? provide business model / proposal for XJP to capture the broad market McKinsey Broad Market Study Process ? Project design (Q1, 2023) ? Project review with local and regional JC team (Apr. 03) ? Survey market selection (Apr. 03) ? Field work in 2 cities in Shandong (May 03) ? 1st interim report (midJune 03) ? Field work in 2 cities in Sichuan (midJune – midJuly 03) ? 2nd interim report and Killer Idea workshop (end July 03) ? Final report (Aug. 03) ? Presentation to corporate management (Sept. 03) BROAD MARKET CAN BE DEFINED AS CLASS 2 HOSPITALS AND BELOW AT REGIONAL CITY LEVEL AND ALL HEALTH CARE INSITITUTIONS AT COUNTY LEVEL AND BELOW Regional city County Town Village Class 3 hospital Class 2 below hospital Pharmacy Clinic Broad market Source: McKinsey analysis BROAD MARKET DRUGS INCLUDE OTC AND “OUT PATIENT” Rx DRUGS Source: McKinsey analysis Targeting easily diagnosed, nonlife threatening diseases Easy to use Relatively cheap Relatively safe with few side effect Examples OTC Mature New Motilium GynoDaktarin Rx Outpatient Inhospital Sporanox / Sibelium Cipramil Broad market drugs McKinsey Key Findings Overall Market Situation BROAD MARKET REPRESENTS 94% OF OVERALL DEMAND FOR BROAD MARKET DRUGS Class 3 hospital Broad market drug sales breakdown by geography Percent * For only 2 according cities ** Data for only Sichuan province Source: Interview with distributors, hospitals, pharmacies clinics。 McKinsey analysis Total = RMB million Village County Town City IN BROAD MARKET, MOTILIUM IS LOSING OUT BIG TIME IN RETAIL PHARMACY CHANNEL … Retail pharmacy Hospital Clinic Source: Distributor interviews。 Retail pharmacy interviews。 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 JINING Vertigo Drug Category Review THERE IS UNTAPPED DEMAND IN TWO OF THE THREE PRODUCTRELATED TAs GI disfunction patient flow in broad market percent Source: Hospital pharmacy interview。 physician interviews。 McKinsey analysis Sales by strata Mn RMB, % Motilium Sidashu(斯達(dá)舒 ) Wei’ershu(謂爾舒 ) Mosapride(莫沙比利 ) Tidines(替丁類藥 ) GI drugs 15 26 19 41 15 22 20 43 22 37 26 15 26 44 21 9 18 50 23 10 1 17 17 66 YANTAI JINING Vaginal Infection Category Review FOR VAGINAL INFECTIONS, PATIENTS ARE MORE AWARE OF THE DISEASE AND GO TO HOSPITAL FOR TREATMENT Percent Less latent demand Almost all patients aware of the disease due to obvious symptoms and regular check up 80% of patients seek treatment Large hospital is important influencing channel Most patients seeking treatment will go to large hospitals Though half or more will purchase prescribed drugs in pharmacies Market player should focus on share gain Total incidence Do not seek treatment Go to large hospital Go to small clinic Self medicate at pharmacy Seek treatment Not aware 100~ 2 5~0~ 5 5~ 8 0~ 2 0~1 Source: Physician, pharmacy and clinic interviews Hospital is still number 1 channel to push Gyno Daktarin sales Pharmacy is being increasingly important 30% would use branded drugs, while 70% would use nonbranded drugs FOR GYNO DAKTARIN, HOSPITAL IS CRITICAL FOR PRESCRIPTION BUT PURCHASING HAS BEEN GRADUALLY SHIFTING TO RETAIL PHARMACY Anecdotes Quantitative examples SubTA sales by channel Percent Source: Hospital interviews。 Focus group。 PHARMACY CLERKS BECOME INFLUENTIAL * 40% of the patients changed their mind in pharmacy Source: Interview。 retail pharmacy interviews。 LIANGJIA IS DOING BETTER THAN SPORANOX AT RETAIL PHARMACIES DUE TO HEAVY ADVERTISING 46241614Percent Others* Total = RMB million County Town City Sporanox Lanmeishu (蘭美抒 ) Liangjia (亮甲 ) Village 0 Source: Distributor interviews。 McKinsey analysis VI patient flow in broad market percent Vertigo patient flow in broad market Percent Total incidence 100 ~30 30~40 20~40 Not aware Do not seek treatment Seek treatment Total incidence 100 ~1 20~40 60~80 Not aware Do not seek treatment Seek tre