IQVIA Holdings Inc. (IQV) Earnings Call Transcript & Summary

Hello, everyone, and welcome to today's webinar, Global Medicines Outlook to 2026. I'm Todd Culpepper, Director of External Affairs and Engagement at the IQVIA Institute. And before we begin today, I'd like to share a few helpful notes. The webinar is being recorded and will be available on demand at the same registration link after the live session. For an enhanced view of our presentation, click the small box located in the gray box above the slide window. You will find a link to our report in the resource list located at the bottom of your screen. You may ask a question at any time, and to do that, just click on the Q&A icon at the bottom of your screen, type in your question and hit the submit button. And if at any point during the presentation you're not able to see the slides, simply refresh your browser. This will normally take care of the issue. And with that, I will now turn it over to Murray Aitken, Executive Director of the IQVIA Institute for Human Data Science.

Thanks, Todd, and welcome to everyone joining this webinar from around the world. We are looking forward to sharing with you our perspective on the use of medicines globally and the outlook for the next 5 years. This will build on the recently published report on the same topic that's freely available on our website, and I do encourage you to download the report for your own review. The research in that report was undertaken independently by the IQVIA Institute with access to IQVIA's syndicated offerings and drawing upon the expertise of our colleagues within the company for which we are very grateful. And we have assembled part of that expertise for today's webinar. And I'm delighted to be joined here today by colleagues from around the world to also bring their perspective on the outlook for medicine use, and you'll be hearing from them shortly. Here we are standing at the beginning of 2022 with a remarkable 2 years behind us, and some significant uncertainty still ahead of us. One thing that is clear is that the role of medicines, including vaccines, has been well established over the past 2 years. It's also very clear that all parts of health systems have been stressed during this period of the pandemic and that governments and budgets will be stressed going forward. At the same time, advances in understanding the science of wellness and disease of human biology and the translation of that science to therapeutics and cures has continued through the pandemic, and indeed, in many respects, it's accelerated. So how this all plays out for individual patients, for populations and for the sustainability of health systems is something that we think about a lot at the IQVIA Institute and where we'll focus our attention today. Specifically, in terms of the role that medicines play in health care, their use and the expenditure on those medicines. So we'll spend the next 90 minutes or so this way. We'll first hear from Michael Kleinrock, Director of Research at the IQVIA Institute and lead researcher for this report, and he's going to provide a summary overview of the key findings from our 2022 report. And then we'll hear a local or regional perspective from our colleagues, about 10 minutes for each part of the world, not a lot, but enough to provide some on-the-ground insights that we think are important to share. And then that will be followed, if we have time, with some audience questions at the end. So please do send those through. But let me introduce our panelists in order -- in the order that we'll hear from them. We have Hannah Law joining us who -- from the U.S. She is our VP for Thought Leadership and Marketing in the U.S.; Sarah Rickwood based in London, who leads thought leadership and marketing for Europe, the Middle East and Africa; Howard Chen is joining us tonight from Shanghai, where he heads our management consulting group for China; we also have Alan Thomas joining us from Tokyo tonight, IQVIA's Director of Strategic Planning for Japan; and last but not least, Sydney Clark down in Sao Paulo is joining us. Sydney is the Vice President of Consulting Services for Latin America. So we really have a wealth of insight coming through today, and I very much look forward to their comments in a few minutes. But before we get there, let me ask Michael to come in and take us through the highlights of the research in our report. Michael?

So thanks, Murray. And I'm just going to start by saying thank you also to the 100-or-so colleagues behind the group here that's done a lot of the work on this, but this is a big team effort and also many of our stakeholders who exchanged back and forth on some topics to get a better understanding. The key points that have really brought that collaboration and workflow to the fore are the understanding of how vaccines and therapeutics have really affected the spending on medicines and use on medicines around the world. This first point, I can't emphasize enough the nature of the approval process, the emergency use authorizations and in some ways, the distribution channels, which for those of you who understand how IQVIA acquires our data, these are challenges for us to measure. And so we've worked very hard to get a really good understanding of how to do that in addition to other medicines outside the pandemic. So the key finding here that based on our understanding of where the pandemic may go with big uncertainties, how it impacts non-COVID-related activities as well as the therapeutics and vaccines directly. We end up with sort of an interesting put and take, a dynamic where the overall compound annual growth rate over the 5 years to 2026 is actually unchanged with or without these COVID vaccines and therapeutics. We do end up with an extra $133 billion on top, but $1.8 trillion total spend is about where we are projecting to be 5 years from now from about $1.2 trillion today. So big dynamic and an extra thing we've all been dealing with, as Murray said, for the past couple of years. We want to look at volume and the use of medicines as well. And so we have a metric here where I'll simplify to days of therapy. But essentially, we've standardized dosing to a standard dose for each drug. I'll get to that in a second. And that's relatively modest volume growth which is slower than it's been in the past few years, but a key underlying parameter here. Geography has some real diversity here. It's one of the reasons I'm really thankful to have our colleagues here to really dive into some of these other regions where things are not moving at the same speed around the world. And then innovation has been driving our therapy areas in some interesting directions. And so I'll dive into a couple of them, but particularly oncology and immunology have been leading classes, and they have some diverging trends. Oncology still projected to grow 9% to 12%, immunology slowing, particularly due to biosimilars in the next few years. We're particularly looking at a couple of those therapies that are really slowing. And then the flip side is all the rest of the innovation that we see in neurology, including rare diseases and next-generation biotherapeutics, those are all significant and notable areas of interest in the market. So I'm going to cover about it as far as that. There's much more than this in our overall report on each of these topics, so I'm being pretty abbreviated here. So I definitely encourage you to follow through and go check those out. So my apologies for my artful and dense design on the page here. But across the top, what I have here is the overall spending on medicines, and this is in billions, so the dark blue is our -- essentially our current outlook without the COVID vaccines and therapeutics. The light blue is that extra. You noticed that that's sort of front-loaded last year and then diminishing over time. Again, that's because we have the bolus of first vaccinations, followed by an expected continuing flow of rollout to lower income markets, which are still lagging and booster shots, which is a whole complex topic as the pandemic evolves. But if things play out that way, we would end up in 2026 having, in total, spent about $250 billion on COVID vaccines, another $60 billion or so, just under, on therapeutics, antivirals, antibody-type treatments, some of which have already been approved, some others that are still following, some may be more needed if medicines prove unresponsive to variants, for example. And so the net-net is that close to $300 billion on that side, but also about $175 billion less in terms of reduced cumulative spending across non-COVID activities, which we think is sort of a drag essentially on demand and spending and shifts in spending, sometimes shifting to lower cost while maintaining volume. As we said, the volume is relatively low growth. So some interesting dynamics there. Net-net, there's $133 billion of extra spending to find funding for around the world for payers. Put that in a straight growth context, I'll just show you the dark blue line across here is our prepandemic perspective. So no apologies for not having predicted this would go this way, or maybe I should. The -- then the wavy lines here, we start with a sort of a revised projection and -- including actuals up to late 2021 period for everything other than COVID. And then the higher line there is the all-inclusive growth rates. So definitely, we have a big spike in spending growth right now, certainly understand where and why that's coming from. And there's definitely a question as not just from medicine pressure on health care budgets, but on overall health care budget pressures and economic recovery often drives government decisions on how much there is to spend. So there's definitely some expectation that as we see things return to a more normal set of activities or a sort of parallel track where we're trying to get back to normal and the pandemic continues, there remains a focus on containment of spending growth drivers from a number of payers, governments around the world. So this definitely is not in isolation. There's definitely an interaction between the events as they evolve, the uncertainties that concern payers and have them proactively managing into the future as well as the entire rest of my presentation as we focus on things like the burgeoning crop of new medicines emerging from research and addressing a number of needs. So let me talk about that volume story for a second. So this is a metric that we use. It's a WHO-defined daily dose concept. So if anyone is interested in that, that's how it works. So each medicine has a standard dose. We take all of the volume we capture in over 100 countries and put it through magic calculation and end up with a volume metric that I simplify and call it days of therapy. What you'll notice is that we have some dips, certainly 2021 had a dip in the days of therapy, partly because 2020 had some -- we think of COVID as disrupting, but in fact, there's some pickup of some therapies during the pandemic in 2020 and in '21 that are sort of unusual. For example, existing medicines like ivermectin being used potentially for COVID had created spikes. We'd also see things like severe asthma rescue inhalers being used early on in the pandemic. So those moved the volume quite a lot. But overall -- overall growth, 1.5% CAGR over the next 5 years, about half what it was in the last 5, and particularly developed markets, 0.7% volume growth in this context. That's just about population growth. So flat is what I would think is the best way to describe it. Our countries we call pharmerging. So those are relatively low income under $30,000 per capita and higher pharma medicine spending growth. There's about 20 countries in that group, and they are growing about 2%. Again, some of them have growing populations, but this is flat to rising only slightly in demand terms is the way this metric would be interpreted. And so there's a shift in the usage that's going on from existing traditional high-volume therapies to the few patients who are using novel specialty therapies, which are often more expensive, but very few people need them and use them. That translates into some different economic dynamics, and I'll switch now to spending. So this is in dollars -- constant dollars. And you see the sort of last 5 years, we had about a 5% compound annual growth rate with the developed markets in the sort of 4.3% range, pharmerging 7.8%. We then have our lower income group of countries, which includes many, many much smaller population and lower-income countries essentially with flat growth. And so overall 5%. This is essentially our list and invoice or list price version of the analysis, so it does not reflect off-invoice discounts and rebates. And so some markets, manufacturer revenues are certainly probably growing more slowly than this. In some geographies, particularly in the U.S., where that dynamic is more pronounced. If we look at the outlook slowing, 3% to 6% is the range and slower in the U.S. 2% to 5%, pharmerging 5% to 8% and the lower income markets rebounding, we think, 3% to 6%. So let's look at how that works out. So these are 2 5-year chunks of time. And I'm looking at sort of trying to explain the forecast period in the context of how it differs from the past year. So if we look at the next 5 years and we see the new brands, just a little bit larger than the loss of exclusivity or the impact of brand losses of exclusivity. Generics is a small positive, and that's it, an interesting dynamic where, obviously, when the brands lose, the generics would gain, but then there's deflationary aspects over time. So that's -- it's -- that's where that's there. Generics in this context would include biosimilar impact. The existing brands is essentially a concept where those products which are not new or off-patent are continuing to drive growth, either mostly by volume, fewer price changes in the market in the last few years. That's all -- those first 4 sort of elements are all within the 10 developed countries: U.S., Japan, the EU 4, plus and U.K. South Korea, Australia and so on So that 10. The pharmerging, as I mentioned earlier, is that other group of countries and they're adding $128 billion and then all the rest of the countries in the world is the remainder. And so you see that dynamic is notably just a little bit different in terms of the last 5 years where the LOE was not offsetting new brands as much. So when I get to the impact of expiries in the next couple of slides, you'll note that's essentially what's necessary to make that room for innovation in this trend, without innovation driving up the trend otherwise. So when I'm thinking about innovation, what's in here. So in the past few years, if any of you remember, back in '15 and '16, even going back to '13, we started the sort of the bolus of the hepatitis C cluster. Most of that impact is in '14 and '15 and into '16. And you see that sort of the absolute dollar amount of new brand spending being significant, approaching $60 billion, new defined in those -- in each of those years as things that were less than 2 years old at that time. So definitely significant spending on some big selling medicines at that point. We don't think that those same peaks exist in the outlook based on the modeling and the expectations, but we do think that there's still 300-plus new medicines that will emerge, new active substances, novel active substances will emerge, not counting -- I'm including in the overall impact if there is part of the new period, but not counting line extensions, follow-on indications and so on, but just the new things, still 300 of them, 50, 60 a year. Notable, for example, and we'll have shortly, in a few weeks, some updates on these because information emerges confirming launches. The 2021 number is actually a little above what we thought it was when we went to press in December. It looks like it might finish at 83, which is fairly astonishing all-time record. We'll talk about it in an upcoming report. I mentioned the impact of losses of exclusivity and this is, again, contextually a bigger loss of exclusivity impact, but you notice here the amount of it that is essentially dependent on our modeling being correct the market developing the impact on biologics and the biosimilar concept playing out. There's some significant medicines coming up, particularly in the U.S. adalimumab, ustekinumab are in 2023 with the impact drifting into '24 over time. Those are some of the bigger ones. There's many others, and that will be a big part of the LOE impact story over the next 5 years as biosimilars mature as a concept and really start to deliver that savings, that end-of-life dynamic for the biologics sector, similar to the way they have for a generation in the small molecule. And again, that creates the headroom for innovation that we've been talking about. Now if I look at that biosimilar concept, this is our projection for little over -- so $215 billion cumulative savings projected over this period for the -- globally for all of that biosimilar activity to play through. So that's comparing essentially what would be happening if we didn't have these biosimilar events in the biologic medicines effective continued growing. So it's a big number. It would have added -- essentially would have made a $3 trillion -- well, it would have made a $2 trillion market instead of the $1.8 billion, sorry. So it would be a really big impact. It would definitely affect the market. And so it's helpful, certainly, to see this emerging, also -- particularly for patients who then have the ability to have access to these medicines otherwise that they wouldn't. In other biosimilar reports we've done, we've noted incremental volume on biologic medicines following the entry of biosimilars, a few percentage points is expanding access, which is a nice thing to see. So if I just try to give you a little more detail on therapies. These are inclusive of all of the market dynamics, not just the new things. This is now sort of broader in the top 20 therapy areas by the end of our 5-year period. Oncology, north of $300 billion; immunology, a little more than half that, diabetes, neurology. These are the big classes driving a lot of activity, and they are heterogeneous. So oncology has a range of things, has a sort of a stable backbone of older generic chemotherapy, but also has all -- most of the new medicines are targeted. We had cell and gene therapies and so on. Immunology. has a multitude of indications, including newer ones in psoriasis, atopic dermatitis, asthma. Diabetes continues to see a flow of new innovations. Neurology has a mix of rare as well as the potential for some real breakthroughs in Alzheimer's, Parkinson's, so really a lot to think about across these and big variability in terms of the therapy areas in terms of their growth rates and performance. So I wanted to show you that oncology story. And again, we've had some big innovation. Those -- the recent peak is a lot of the impact of the immuno-oncology checkpoint inhibitors and [indiscernible] and other indications. The next 5 years, we think, still has another 100 new drugs, another $120 billion of incremental spending. So continued advances in cancer, really exciting, and offset by biosimilars and small molecule expiries. If we then look at immunology, the real dynamic here is that impact in expiries and particularly the issue we already have some biosimilars in the European markets in this category. There's -- infliximab is already in the U.S., but adalimumab and ustekinumab in the U.S. is coming later will really have an impact. They collectively represent more than half of the U.S. spending that will be subject to this biosimilar competition. So big impact did slow down, a big increase in competitive intensity in these categories for the existing remaining more than a dozen protected products in those categories. So I mentioned the sort of next-generation biotherapeutics. This is the term we use to include cell and gene and RNA and nucleotide type therapies. So the fancy stuff. These are for things for -- these are CAR-Ts for cancer. We include -- there's spinal muscular atrophy therapies, new medicines for hemophilia, beta thalassemia, blindness, there's a whole range of them and hundreds coming. The concept here that we're looking at is the potential for a really wide range of scenarios. And the scenario here is there may be a large number of these medicines emerge, get approved in the market. They are often for very small populations. Market access may be challenging both logistically in terms of where treatment centers are, where the patients are, are they aware of them, are there other options. And again, as I said, budget concerns from payers may limit that initial uptake that we've seen so far. As backgrounds to date by sort of late 2021 when we published, we are seeing about $5 billion globally of spending on the collective group of 30 of these medicines that have been launched so far over a decade. Notably, there are some early gene therapies that have been made available, launched around the world and then have been removed from the market or cell therapies as well. So this is not a sort of a one-way street that these medicines come to the market and are then used continually, there's rapidly moving and evolving science and understanding about the uses of these medicines. In addition to the sort of excitement about the clinical potential curative gene therapies and gene editing technology, it's notable that in -- there have been sort of regulatory pauses. There have been what one might call sort of concern or setbacks. So the range of our outcome has a combination of factors, including those kinds of setbacks as well as sort of the market dynamics that diminish the uptake in spending on the medicines. And so overall, about a $20 billion level of spending 5 years from now is likely, but there are estimates as high as sort of $55 billion, and there are some analysts if they add all of them, the max potential of every drug together, they can end up way higher, although we think that's got a lot of situations where that would be unlikely. So if I try to put that all back together and think about sort of another dynamic here is sort of neurology. And this neurology is sort of a combination of categories that put together sort of neurology and mental health here because of the related dynamics, but you see some interesting issues. So across the last 5 years, the growth rates on the bottom vertically is the next 5-year projection, the size at 5 years from now is our little bubbles. And what you can see is some significant performance recently in migraine, slowing a bit, but there's quite a few new migraine therapies. Alzheimer's has some real potential in the next 5 years. We'll have some hurdles to overcome so far with the acceptance of newly approved medicines and with subsequent medicines becoming approved, but that's certainly an expectation there. So generally, neurology has a lot of activity in the pipeline, second largest pipeline area that we're seeing overall in activity. And should those medicines come to the market, there will be a range of things, including these sort of bigger areas we're seeing as well as a whole range of neuromuscular and rare diseases that really drive a lot of activity. So with that, I just want to pass back to Murray and let the team follow through some of the more interesting regional dynamics.

Great. Thank you, Michael. And again, that's a quick run through the highlights of our report. It's 60 pages. As I said, I do invite you to download it. You can also access PowerPoint versions of the exhibits from that report. That's all on our website, and we'll send the link through at the end of the webinar. But now I would like to bring in my colleague, Hannah Law, to give us a perspective on the most important single market globally and what certainly gets a lot of attention in the United States, to sort of bring her perspective on how she sees the global use of medicines rolling out over the next 5 years, Hannah?

Great. Thank you so much, Murray. Thank you. Thank you, Michael. Thank you everyone for being here. So I'll do a brief review of spending on medicines in the U.S. market, and then I'll talk about some of the dynamics that I think are said to have the most impact on medicine use and access and treatment in the next 3 to 5 years. So we'll start with the big picture. Net spending on medicines excluding rebates and other price concessions for patients in the U.S. reached $580 billion in 2021. And looking ahead, that growth is slowing from the 3.5% annual growth rate we saw in the past 5 years to at most about 3% through 2026. And I'd like to dive in a little bit to the composition of that growth. So the increase of about $119 billion will be driven by spending on both new and existing brands, which is greater than in the past 5 years, but certainly heavily impacted by losses of exclusivity, as Michael mentioned. A few notable points on this slide. Number one, spend on existing brands is expected to exceed new brand contribution to spend, which is a change from the past 5 years. In part, this is due to high-volume drugs such as PD-1s entering the adjuvant space and also immunology products such as DUPIXENT entering psoriasis, severe asthma and atopic dermatitis spaces. And two, the spend is offset by historically high impacts of losses of exclusivity in the coming years. Again, Michael mentioned this briefly a few moments ago, but it's driven by small molecule expiries, which contribute about $95 billion in spend reduction, which is double the past 5 years and then the biologic expiries and biosimilar competition, which is contributing about $46 billion and includes significant milestones [indiscernible] incentives. So let's talk just quickly about the launch environment in the U.S. We've really seen no evidence of COVID impacting new active substances coming to market or approvals. We had 50 new molecules available in 2020, 60 launched in 2021, it's the highest in 10 years. And looking forward, that new brand spend of $114 billion will be focused on the approximately 250 new active substances that are set to launch over the next 5 years. 100 of these will be new cancer drugs, 60 will be next-generation therapeutics, including CAR-T and cell and gene therapies. And of course, those 2 categories are not mutually exclusive. I want to talk a little bit about the environment in general in the U.S. As always, we have an increasingly complex environment marked by a number of dynamics. I'm just going to focus on 3 today: first, there is the always on uncertainty or potential of health care reform by including the changes to Medicare Part D, which while we think is still unlikely in the short term, certainly has the potential to be disruptive and it's something to think about and pay attention to. Number two, the increasingly significant impact of private competitive dynamics, including payer control and commercial. And finally, of course, the long tail of COVID's disruption on both health and care models and the rise of new models to address consumer demand. Overall, I would say we're looking at an increasingly competitive but also increasingly patient-focused environment. And so I'll do a quick dive into each one of these. So first, the regulatory landscape is setting up a pretty high pressure environment for payers and manufacturers, one where the reduction of cost and the expansion of evidence are both top of mind. Again, unlikely in the short term, but a redesign of Medicare Part D would, among other things, shift the burden of the coverage gap and catastrophic coverage from patients and CMS to manufacturers and payers. Even the potential of this move, as I said before, combined with market competition, particularly in specialty has tightened formularies and it created a greater burden of proof on manufacturers. The impact, some of which is shown here includes rejection rates at their highest levels in almost a decade. And particularly, the abandonment rates among Part D participants is concerning. And oncology drugs, which were once sort of a protected class, are increasingly excluded from formularies where there are alternatives available to patients. And so my overall comment here is that the patient really is the beneficiary from a cost perspective. We like to keep an eye on lack or limited access to innovative medicines as a concern. So I'd like to spend the last part of my time with you talking about the environment as it relates to COVID because it's hard to talk about the U.S. without it. In the U.S., we have a couple of high-impact areas, and I think about it along the spectrum of disruption to innovation. In terms of disruption, we estimate that 8.5 million adults in the U.S. missed a preventative health visit in 2020. This contributes to delayed diagnoses and widening health disparities, especially among minority populations. And while these are certainly not new, they have been illuminated in the past year. Alongside that, 269 million diagnosis visits still missing through the first half of 2021. A diagnosis visit is defined as a meaningful interaction between a patient and a health care provider. And so this represents delayed disease journeys and is likely to intensify what we see in the next coming years. The oncology diagnosis business, in particular, are of concern. They remained down through 2021, dropping at a rate of about 8% since 2019 and screening diagnostics, which you can find in some institute reports such as colonoscopies, CT scans, mammograms, Pap smears, PSA tests are down anywhere from 6% to 19% compared to the baseline period. So as we think about the long-term impact of COVID on health, certainly something to keep an eye on in the U.S., which then leads me sort of into my positive innovation statements and the exciting acceleration of patient and consumer-centric health care. There's been a proliferation of digital health and other innovations, transforming where care is happening in the U.S. Telehealth claims in the U.S. increased over 2,000% between 2018 and 2021. And while the percent of telehealth claims to total claims is flattening out, that was still a big boost and a big innovation job for us. And there's a resurgence in the home health care market, which looks to outpace the growth of the overall health market. Home health market is projected to grow at 7.9% growth rate through 2027. That's compared to 5% for the overall sector. Capital markets are supporting innovations with an acceleration of digital health funding, $29 billion across 729 deals, which is the highest amount to date. These deals include telemedicine platforms and companies working on EHR and electronic medical record interoperability, which is a critical catalyst for sustained innovation. And finally, all of these forces together, combined with consumer demand, and as I said at the beginning, sort of an increasingly patient-centric and patient-first strategy in health care, many players are creating new footprints to drive better access and affordability. And I anticipate this has an impact on where and how medicines are taken in the future. We've got traditional pharmacy models like Walgreens and CVS moving into primary care. Vertically integrated markets bring together payer, pharmacy benefit management, specialty pharmacy and retail and could really change the patient experience of health care and even nonhealth care companies like Amazon and some grocery change pushing into health care. The integrated models bring care much closer to home, sometimes literally for patients and can improve patient outcomes and even disease prevention. So overall, I leave you with the hope that we are in a more consumer-centric model, driving equitable access to care and to medicines in the future. Murray, I will hand it back to you so we can hand over to our European colleagues.

Great. Thanks, Hannah, and that's a terrific overview. I'm struck by a couple of things actually. One is it's sort of great that we're able to talk about biosimilars as we do now in terms of the savings that they are bringing. This is something that we've been waiting for, I would say, in the U.S. market for quite some time, and it's notable how much of an impact they're likely to have over the next 5 years. The innovation surge, Michael mentioned 300 new drugs globally to be launched, 250 of them you mentioned for the U.S. market. Of course, not every drug is launched in every market, hence that difference, but that does reflect this surge of innovation that's continuing. And then I think this sort of more optimistic note about the positive changes coming out of the disruption of the pandemic and shifts in the way in which health care is being delivered, I think, is very exciting. And then within that, how the role of medicines is viewed and how the value of medicines is seen, I think, is going to be an interesting dynamic. Of course, there's always more on the horizon than we actually realized. But this is clearly -- the U.S. market is going to continue to be one that evolves very rapidly over the next 5 years. So thank you for that perspective. And now let me turn to Sarah in London to bring us the perspective on the use of medicines in Europe. Sarah?

Thank you very much, Murray. Hello, everybody, who's on the call. So I'm going to talk about Europe. But in my first slides, where we're talking about the change in the medicine spend dynamics, I'm going to focus in on the 5 largest markets in terms of medicine spend on prescription medicines in Europe. And that's the U.K. outside of the European Union and within the European Union, obviously, France, Germany, Italy and Spain. So if we look at a similar kind of breakdown of the growth drivers of the market, as you saw for the U.S., what we're forecasting, and this is the pre-rebates and discounts level, by the way, is that spending on prescription medicines in the lead 5 European countries increased by around USD 51 billion through to 2026. And that's an increase on the growth in spend that we saw in the previous 5 years. Hannah already talked about the fact that although the pandemic has had a significant health care impact, it hasn't actually impacted negatively on the approval of new medicines in the U.S. or them coming to market. And actually, that is, by and large, also the case in Europe. [indiscernible] approvals are knocked down on historical levels. And for most countries, we are seeing the medicines become available through commercial channels at historical rates. Spain is a little bit down on historic rates. And that's one that we expect that's in terms of new brands driving growth over the next 5 years. There will be the potential for that being a substantial growth driver. There may, of course, particularly to the end of this forecast period be some negative impacts there. And I'm going to talk about health technology in a second. Loss of exclusivity impact is quite substantial in this time period as it was for the U.S. The growth of generic is not so high because although volume will grow for generics, we also expect there's going to be considerable price deflation as health systems seek to make products that are multisource inexpensive. If we move to the question of impact of exclusivity losses. We're expecting that we will see [ trickle in ] value terms over the next 5 years. And the big change that we are seeing is the growth of exposure of biologic medicines. Now Europe, of course, has the oldest biosimilar market in the world, 15 years old. This is a well-established part of the market, and it's the largest biosimilar market in the world as well. And the number of biologics that are open to biosimilar competition has increased rapidly. And with that, savings to European medicines budgets as well. We estimate that list price savings versus the pre-biosimilar cost of the originator for the broader definition of Europe to be some EUR 6 billion in 2020, with many of those savings driven by the introduction of biosimilars for the monoclonal antibody products. And if we take a look at those more recent, more complex biosimilars, on the left-hand side, you can see the evolution of uptake of biosimilars into the originator molecule in the European market from infliximab onwards. And it has become progressively steeper and deeper faster. So bevacizumab reached 50% volume of the originator investment for the year after the first approval of the biosimilar product. And previous molecules have taken up to 2 years. So competition has increased. The reason for this increase in uptake is threefold really. I mean there's the fact that stakeholders, patients and doctors are increasingly comfortable with the use of biosimilars. Health care systems have learned how to better promote the uptake of biosimilars and we've also seen increased competition in the number of companies that are coming in and providing biosimilar products. And those companies are now not just European companies, there's some South Koreans, Indians, Chinese and U.S. companies as well. And there's more products per molecule coming in with each major biosimilarization. That's enabled steep discounts to be extracted by payers. It's also seen originators respond by evolving their offer and providing improved versions of their products or indeed competing in tenders on prices. And that in itself is triggered [indiscernible] response with improvements on their offering too. So the market is very robust and will continue to evolve strongly in the coming years. That will be required, of course, because the environment for Europe is going to be economically challenging in the coming years, and that will reflect upon medicines' budgets. In Europe, market access is an extremely important step for any new medicine to pass that they're going to be used widely in the market. And we see a number of significant changes in the market access environment for each of the big 5 European countries, but also at the level of the European Union or other international levels as well. Just outside of the European Union, for the U.K., there's a major nice reform proposed, which would bring in faster and more agile nice assessments. It would also mean faster rejection of products whose price is deemed to be above cost-benefit levels. We are probably going to see the introduction of a new innovative medicines fund, which is an expansion on the Cancer Drugs Fund approach, which would establish a new conditional reimbursement pathway for new medicines in the U.K. And we've seen NHS England within the U.K. start to forge some quite innovative agreements with companies. For example, a population health agreement for the novel siRNA product LEQVIO with Novartis. Those challenges, where in France, we expect to see measures that are going to seek to reduce the overall medicines budget. In Germany, we again see cost containment focus with a call for the end of orphan privilege. So this would be IQWiG abolishing the automatic added benefit that is being bestowed on orphan medicines and putting them through the same evaluation that nonorphan products have. On the other hand, in Italy, we see a significant increase in the allocation of funds for innovative medicines, a planned additional EUR 600 million over 3 years for the innovative drugs signed in Europe. Whilst, of course, individual country level activities matter, there is also intercountry cooperation. And one of the things that happened in '21, which we will probably see more of is an agreement between Belgium, Ireland and the Netherlands on the price of ZOLGENSMA, an expensive advanced gene therapy. And going forward of what will happen, that is a major change in the European Union part of the European market over the next 5 years will be a movement towards harmonized regulation on health technology assessment. This is going to come in. It's planned to come in as a phased approach, starting with cancer therapies in 2025, then moving on to orphan medicines and advanced therapeutic medicinal products. And that would make significant changes to the way that companies [indiscernible] innovation accesses the European environment. If I look more broadly at Europe but also the Middle East and Africa, just as in the U.S., we see digital health technologies bringing major changes to these markets. But these markets are quite diverse in where they are in terms of digital health maturity at the moment. It's a mapping exercise that we did recently, where 5 is the highest level of digital maturity at the Y, 1 the lowest. There's a weak correlation between that and GDP per capita. Wealthy health care systems tend to be more sophisticated health care systems. But certainly, what the pandemic has done both in terms of consumer pool but also in terms of structural funding like that coming from EU Health is start to move countries along the road to greater digital maturity. And this is going to impact on medicines innovation and use, whether it's about developing insight and speeding clinical trials through better, more effective patient data collection, but also health care systems, of course, evaluating medicines to use more effectively and driving rational medicines use, for example, an increase in biosimilar uptake. So I'll hand back now to Murray to introduce the next section. Thank you, Murray.

Great. Thanks, Sarah, for that terrific perspective. And it's always interesting to hear a perspective from the U.S., followed by a perspective from Europe because it does highlight some of the differences in the sort of fundamental environment in which we consider the use of medicines. And notably, in Europe, we're talking about health technology assessments and conditional reimbursement and payer budgets, whereas in the U.S., it is much more about market competition and market dynamics with a -- with some level of sort of governmental or policy change potential, but where much more of the dynamic that's playing out in the U.S. is driven by market competition dynamics. Also, I think within Europe, there's tremendous focus now and will be increasing on the issue of accessibility across Europe. I know that the European Commission is very focused on that. Of course, with that attention comes attention on affordability of medicines and I'm sure that, that will be a dynamic that colors the way in which medicines are viewed and indeed used over the coming years. I think also useful to reflect there, Sarah, on the digital landscape and the extent to which that does change the delivery of care, the decision-making around patient care and in that context, the use of medicine. So definitely an area to be watching. All right. Let's now move on to focus on the second largest single market for the use of medicines, China. And I'm delighted that Howard is able to join us and bring a local perspective on what's going on there and what's driving change over the next 5 years in terms of the use of medicines. Howard?

Thank you very much, Murray. Just like Murray said, I kind of want to start this -- the China intro with a bit of policy landscape in mind because it's hard to talk about China without talking about policy because it's basically under a socialized medicine and it's a single-payer market. So a lot of these regulatory things will definitely point the direction in terms of how the pharma market would go. So I thought I'd summarize a bit with some of the key kind of market access topics that's on the government's mind and basically affecting the overall China market. So traditionally, in the last 2 decades or so, China has gone through a tremendous economic growth and of course, tremendous growth in terms of the pharma market as well. But in the last 5 years or so, what the government is really tackling is this issue with cost savings. So it's kind of -- China is right now sitting in this kind of a juxtaposition where they're very encouraging in terms of overall kind of advancement in innovation, bringing biologic cell therapy, gene therapy type of products. At the same time, it's also struggling to cover for the needs of the 1.4 billion people. So the previous 20 years, we saw the government trying to give basic medical coverage, basic insurance coverage overall for the -- most of the population. But in the last 3, 4 years, the government -- what the government is shifting is towards giving coverage to more of the advanced drugs that are increasingly coming in as we speak. So that's -- the biggest issue here is, of course, how they alleviate some of the funds already in the system for the older type of drugs and kind of pump that money -- pump those government funding into the more innovative products. That's the biggest struggle the government's is facing as we speak. So 3 sets of policy and regulatory things that the government has been doing, but I really want to highlight what the section was, number one, like I mentioned, the encouraged -- encouragement of innovation, the expedited approval, et cetera. The other one is called volume-based procurement, which is actually what I call it a rather hard-handed way for the government to put in a patent cliff, which actually didn't exist before, unlike the more freer markets previously in Europe and U.S. China didn't really have this patent cliff. But now in the last 4, 5 years or so, the government has erected this -- a slew of policies called volume-based procurement to force some of these patent cliffs to take place. And lastly, NRDL adjustment, National Reimbursement Drug List. So for you to get access to the majority of the Chinese market, you have to get into the BMI, the basic medical insurance and to try to get into the NRDL, the National Reimbursable Drug List. So that gets updated on the annual basis. I'll talk to how that one is also one of the big levers for the government to control costs moving forward. So kind of in summary, governments -- the whole China market is shifting towards this value-based innovation market. So a juxtaposition of trying to be more and more innovative, trying to adapt and trying to bring more and more advanced drugs at the same time, struggling to find ways to cover for the costs and to basically cut costs across the board. So let's move into the next slide and look at some of the numbers. So like I was mentioning in the earlier slides, the past -- from 2011 to 2016, you can see a really fast-paced growth in terms of drug spending -- pharmaceutical spending, 13% CAGR year-on-year. And then you move into the present where you see roughly around 6.1% from 2017 to 2021. You see that slight tapering in 2020 because of very stringent COVID lockdown measures, slowing down a lot of the spending in overall health care, but you see that pick right back up in 2021. So from 2021 onwards, the trend, like I mentioned, is twofold. So we see the overall CAGR from 2022 to 2026 roughly land around 3.8%. But what's interesting here is actually what's driving that growth in the light blue area original branded products, what we see is there's going to be tons and tons of more innovative products driving growth. We'll probably put that figure somewhere around double digits, somewhere around 15% to 20% growth in terms of biologics, cell therapy, gene therapy, your CAR-Ts, et cetera. But what's dragging that down is actually cost containment measures. So you'll see a lot more price sensitivity and a lot of more price cutting, especially for off-patent products. So you see that kind of dragging down the growth for both original brands in terms of pricing and also shifting into nonoriginal and unbranded products where you actually see volume growth but overall pricing is still at such high pricing pressures that overall value actually is kind of flat. So overall, again, we see roughly around 3.4% growth in China, but a lot higher growth, double-digit growth in terms of biologics and advanced products. So I'll touch upon each of the points that I was mentioning earlier, starting with innovation. So a slew of regulatory changes to push for more innovation. So inclusive of joining with ICH, harmonizing global -- with global trial standards. So more and more [indiscernible] trials are based in China as well, accelerated reviews for specialty drugs or drugs that are sitting in white space areas for truly novel first-of-a-kind basically drugs and also kind of that ramping up kind of capability and capacity in terms of the CDE and CFDA, China's FDA approving -- drug improving units. So we can see that in numbers as well [indiscernible]. In terms of number of innovative drugs approved, we can see that growing steadily up to 2019, roughly around 54 products approved in China that are considered innovative. Like I said, a bit of tapering in 2020 due to sites being closed due to stringent lockdown measures but picking right back up in 2021. And we see -- we clearly see one of the indicators also the lag between China versus global, say, U.S. and Europe in terms of drug approvals and launches. So in 2016, we see only roughly around innovative products being launched in China as opposed in 2019, 40 drugs being launched. Okay. So shifting gears a little bit talking a little bit about market access. So NRDL, the National Reimbursable Drug List, goes through rounds of updates. So on an annual basis, it goes through one round of update towards the end of the year, every year. And we can see the landscape shifting towards innovation as well. So one of the key things is innovation, focus more and more on innovative products, especially around oncology and immunology, et cetera. But the other aspect of this is the bottom row. So more and more tighter kind of cost reduction measures. So for you to get into the NRDL, you were looking at -- as we speak to the last year, roughly around a 60% cut in price to get into the NRDL. And one of the things I also wanted to mention is NRDL is the biggest fool basically for pharmaceutical access basically to the mass market. So it resolves affordability issues and it also resolves access into all the public hospitals. So one of the biggest things that we see is the speeding up of drugs getting from approval to and treated NRDL. So previously, roughly around 5 to 6 years before you can actually get into the NRDL. But recently, it's gone down to roughly around a year or so. So once you start -- you launched the product commercially, you can get into the NRDL within 1 year for advancement in terms of market access for innovation products you can actually get into the system quickly. The last point I really wanted to cover is a little bit about the volume-based procurement. So like I mentioned, it's one of the hard-handed ways or a strong method for the government to actually put in this patent cliff. So previously, the Plavix, et cetera of the world doesn't really go through a patent cliff. But what the government did is it goes through one round of bio and quality equivalency and then it goes to a bidding where the bidder -- bid winner kind of takes the pie. So what we've seen in the last 3, 4 years is majority of the cases is the off-patent originator will lose out in these volume-based procurement and biddings and it'll give up their kind of market leadership to the generics basically. It's basically -- so in effect, it's replacing, it's putting in the patent cliff. And that is definitely one of the key drivers in terms of the overall market. It will basically put a high pricing pressure for off-patent originators and also slightly increased volume and improve the kind of market access for a lot of these molecules that are off-patent ready. So in short, to summarize the whole section, the government's -- China is shifting into kind of an innovative focus market, but at the same time, also very value and cost conscious, which is -- you can see it reflected in numbers where growth is mainly focused in the innovative molecules, while a lot of the off-patent products will be slowing down tapering because of cost pressures. Now I'll hand the floor back to Murray for the next section. Thank you.

Great. Thanks, Howard, and it's always great to hear about the mechanisms that are implemented in China and the impact that they have. And I would say also the speed with which those mechanisms are developed and implemented, which is, I would say, a characteristic of the Chinese health care system and perhaps country overall. I think it's also interesting to hear that you are able to talk about the -- again, the growing surge of innovation, and I noticed it's coming from local companies as well as from multinational companies that's coming into the China market. While at the same time, we've got a slower level of growth in total in the expenditure on medicine. So this rebalancing that you talk about I think, is a very interesting dynamic to be following over the next 5 years. And that also from a pharmaceutical industry perspective has implications in terms of the mix of different companies and their role in this changing market for medicines. So thank you very much for that. And let's now progress to -- well, I'm not so far away, Japan. And let me bring in Alan Thomas to bring us the perspective from Tokyo on the outlook for medicines through 2026. Alan?

Thanks, Murray. I hope you're all doing well, and I hope you can hear me. We get a lot of questions about Japan, and we just heard a few things about China. And a lot of the mechanisms being discussed in China currently have actually been introduced or similar measures implemented in Japan over the last 10 to 12 years. What I'd like to do is just give a very brief snapshot of Japan because some of the questions we get show that there's a lack of general understanding about the health care system here. And in a nutshell, like China, Japan has national health care, but this system was established in the late 1950s and has gone through many changes to adjust to changing demographics. And the health care system here is actually supporting the world's most elderly population. We have the highest share of elderly aged 65 or older of any country globally. And we also have the longest life expectancy, but it's a healthy population. And it's a healthy population in part due to that 55, 60 years of established national health insurance coverage. And this program provides access to over 8,400 hospitals nationwide, with an average of 12, nearly 13 beds per 100,000 people, which is also the highest number of bed access for populations of major markets. And we have a very comprehensive drug list. And unlike what we heard for China, access to this list is quarterly and doesn't require extensive review post approval. And some pressure on price but less so than what we heard for China, and I'll discuss that in a couple of minutes as well. Now this health care system is funded by contributions from employees, employers as well as subsidized public funding. And health care spend share of GDP in Japan is around 10.9%, which is #5 globally, and actually is a very strong fiscal feat, given it's covering 125.5 million people with nationalized health insurance. But we have seen a number of policies and a number of initiatives introduced over the last 5 to 10 years that are encouraging improvements in outcomes, cost savings and patient access. We saw the introduction of long-life medical care system targeting the elderly. We are seeing improved hospital resource management through better bed utilization. We saw the introduction of diagnoses-related groups here in Japan to streamline prescribing and dispensing. And on the drug list side, we have seen a considerable reduction in polypharmacy driven by changes to the pricing system. We have seen the fixed copayment structure shifting to a lower copayment for that elderly population and those eligible to receive it. And we've also shifted to what I call innovation-based pricing, and we'll touch on that in a couple of slides as well, which is really rewarding those pharma companies that are investing in Japan and are bringing improved outcomes to patients. Now Japan has introduced a number of clinical and regulatory improvements. And we're seeing Japan now being the second fastest approvals market after the U.S. And that's being driven by the introduction of conditional early approval in 2017, and the introduction of the SAKIGAKE system here, which is Japan's Breakthrough Therapy Designation. So these are allowing investment in the clinical timelines to accelerate and actually shorten overall timelines by nearly half in the last 10 years. And as a result of this, we're actually seeing increased patient access to leading global therapies. Now back in 2010, only around 36 of the top 50 products at that time were available in Japan. That increased. 46 of the top 50 products in 2021 were available in Japan. Now clinical trials, as I mentioned, our timelines have nearly halved, but more importantly, Japan inclusion in global clinical trials has increased. Back in 2010, only around 20%, 21% of all clinical trials in Japan were part of a global study. That increased to 55% in 2020. Over half of all trials in Japan are a part of a global study. And that helped bring products to market faster and reduce the drug lag. And we heard that for China as well where there is a delay between global launch and China launch, there's a similar delay for global launch and Japan launch. And we heard from Michael earlier of around 300-or-so expected new launches in the next 5 years. We'll only get around 190, 195 of those launches in Japan because of that drug lag. But that's an increase over the 184 launches in the previous 5 years, and around 130 launches between 2010 and 2016. But the drug lag in Japan, that time patients are waiting for access, has dropped from 34 months difference between global and Japan launch in 2016 to 16 months on average in each of the last 3 years. Now there's still room for improvement, but that is a considerable shortening of that drug lag and patient access opportunities for Japan. Now looking at Japan pharma spend. Let's go back to 2011 and 2016, which is the left third of the graph. Japan reported rising spend, which was the catalyst for the introduction of a lot of the various policies and initiatives to both manage health care and pharma spending, but to also maintain patient access and improved outcomes through innovation. We can see in dark blue we have what we call long-listed products or they are off-patent brands here in Japan and in light green, we can see generics. We can see in the last 5 years that the market was still heavily reliant on these legacy off-patent brands and a slower uptake of generics. In fact, back in 2017, for example, generic utilization was around 55%, which meant that if a generic was available, one was only dispensed around half of the time. Initiatives to drive the increased use of generics and an ultimate cost saving on drug spend, so generic utilization increased to 79.2% in Q4 of last year. That's a 20% increase in the volume of generics at a considerably lower price point, and therefore, a considerable cost saving in that unprotected market space. And we're expecting that cost saving to continue, as you'll notice that the blue portion on the graph on the right side for our forecast has shrunk considerably with that increased use of a generic. Now I'd like to point out in principle that all products on the drug reimbursement list here in Japan are subject to biennial price revisions, and these revisions are in even numbered years. Now there were full price revisions in 2018 and in 2020. We also saw a partial revision in 2019 at the timing of the increase in the sales tax here in Japan. And we also saw an out-of-cycle off-year revision last year. This was the first time for that annual revision. Our forecast is expecting that the annual revision will continue through 2026. We will see a standard revision this year, at 2024 and 2026, of course, but the off-cycle revisions will impact the market in 2023 and 2025. But you'll notice that the light blue section of the graph, which represents protected brands and include new launches, doesn't see an overall decrease. In fact, through our forecast, we can see that protected brands are increasing both in value terms as well as share of total market. And it's within protected brands that pricing policy has shifted considerably in the last 6 years, whereby innovative brands that are remaining on patent can be eligible for a partial or a fully deferred price cut. So unlike other markets where you may be subject to price cuts regardless of your level of innovation, Japan is saying we want these innovative therapies brought to market, and we will protect the price at launch for those products to continue to encourage investment in innovation. And that's why we're not seeing a decline in that protected brand space. So looking at the total market and the 5-year CAGR, the market will be flat year-on-year, actually slightly declining with a 5-year CAGR of minus 0.6%, which is actually relatively in line with the previous 5-year CAGR of around minus 0.5%. So it's a flat market, but that opportunity for truly innovative products is strong. Now Michael mentioned that specialty biologics will see 8% to 10% growth in many markets, we will see that growth in Japan. We will see innovative products factoring in the shift to off-patent brands, the remaining innovation, although the light blue line is showing a flat 0.81% growth, we'll actually see 6% to 8% growth for those innovative products that remain in innovation [indiscernible]. So although Japan looks flat, we will see ongoing growth opportunities driven by innovation. Looking at the same breakdown of spending and growth drivers. Underlying trends in the last 5 years will continue through 2026 as well. The continuation of the deferred or the partial price cuts is expected, and we will see contribution from both new brands and existing brands, a combined $33.2 billion absolute increase in the next 5 years. That will be offset by an increase in loss of exclusivity. We're expecting between $4.5 billion and $6.5 billion in spend annually to face loss of exclusivity. And we're expecting higher price cuts in those off-year annual revisions, resulting in a considerable decline in that LOE space. But that will be offset by some growth in generics, which includes biosimilars. But generics growth will be slightly lower than historically, in part driven by those annual price cuts, but also slower volume growth in generics as a result of generic utilization already hitting the 80% target and probably maxing out at around 84%, 85% in 2024. So we will see that increased generic opportunity, which does also include biosimilars. Now we heard Sarah mention that the European market is more of an established biologics market and a biosimilars market in the rest of world. And Japan adoption of biologics in general has been behind other developed market, behind the U.S. and Europe. And only more recently have we seen those biologic launches. And factoring in the drug lag, we will not see as many LOE risks in the biologics space and [indiscernible] biosimilars launching in the coming years. That being said, biologics have been successful. Those that are on market today, and they are priced quite favorably compared to the pricing structure for generics. And the cost saving for a biosimilar is not necessarily as great as that in the small molecule generic space. So we're seeing some prescriber hesitation to adapt to biosimilar, even though there is some cost saving because of that long-term uncertainty in biologics and that lower biologics market. I think in most countries, biologics account for 30% to 35% of total pharma spend. In Japan, it's about 26%, 27%. So it is a lower market because of that historical lack of biologic launches in Japan. Although the launches are accelerating, and we will see a lot of the new brands, that $17.9 billion contribution for new brands, a lot of that will come from specialty and biologics that will be brought to market under expedited approvals timeline and a reduced drug lag. So Japan and investment in Japan is innovation-driven and will continue to be innovation-driven. And stakeholders, including pharma companies as well as wholesalers as well as the hospital networks, as they continue to focus on improved patient outcomes, we will see continued reward for that investment with patient access to improved hospital infrastructure, better managed bed and market access for patients and hospitals. We will see continued management of health care spend at the top line, but at the same time, a reward on innovation in the pharmaceutical market to drive those outcomes and the quality of life improvements we have seen in, as I mentioned, one of the world's most aged populations. So I thank you for your time, and I apologize for the rush. I think I squeezed everything in, Murray, in 10 minutes?

Yes. No, that was terrific, Alan, and I think you did us all a great service by depicting the Japan landscape as clearly as you did. This is clearly a market that remains very important from a drug use perspective. It's also one where the government has managed to implement a series of measures that enables them to support innovation, but also in an envelope of declining expenditure on drugs, which I know many other countries are very interested, and doing that in the context of a population that is aging as much as it is and well in advance of other countries also makes this always a very instructive market to understand and to follow. So we thank you for laying this out for us and bringing your perspective. Last but not least, we want to head to Latin America. And I will ask Sydney to join in here for providing us a perspective on how we see the outlook in Latin America through 2026. Sydney?

Thank you, Murray. Hello to all. So obviously, Latin America, a lot of countries within the region. I'll try to depict what are the key trends, which are mostly common to what's going on in drug spend within these markets. When we think about pharmerging there's a lot of Latin America that ends up falling within pharmerging. You think about countries like Brazil, Mexico, Colombia and Argentina, which are all the 4 top markets in the region, typically fall within pharmerging. And think about the size of the opportunity, it's -- or the size of the drug spend actually, it's about a little bit smaller than what Japan is today when you add this all together. But from a spend perspective, with a prospect which is of growth, right? Main dynamics here are the well-known factors of aging population, right? So you do have an aging population in the region, you take a country like Brazil, which has an age profile similar to U.S. today. But in 25, 30 years, we'll have an age profile similar to a mature country like Germany. So volume demand within the region is going to grow. Yes or yes. There's no doubt about that question. The whole point is about how are we going to pay for it and how our payers are going to deal with it. So when you look at the -- at this chart here, you've got the expected growth rate. So about 8% overall. There are some puts and takes on the countries. The key markets will likely perform well over time. And when we think about COVID impact, right, when we think about the net impact of COVID within drug spend in the region, it's generally been an increase in -- net increase in growth, right, growth rates. So we had more expenses, people concerned about compliance to adherence to treatment. So you think about cardiovascular, you think about diabetes, people weren't very adherent to treatment. So that increased and that gave a boost to volumes. Yes, we had some delays in terms of treatments in oncology like we saw in the United States, very similar situations in Latin America. But overall, net-net, COVID brought an acceleration of drug spend in the region. And overall, in the 5-year outlook, we do have a drug spend, which is quite similar to what we've had in the past 5 years. Regarding digitalization, we do have COVID leaving us with a legacy of increased digital users, especially when you think about telemedicine. And when you think about telemedicine in regions like Latin America, which is still developing, it is actually quite a boost of efficiency for the health care system, where telemedicine does provide some type of access to specialists and even generalist physicians to countries -- or parts of countries which basically don't have doctors, right, or don't have specialists. So hopefully, legislation has been passed through COVID -- the COVID period for the existence of such services and that could be a good boost in terms of efficiency of the overall health care system, which could also free up money for additional spending on innovation and access moving forward. So when we think about Latin America, it's somewhat different from a mature market in terms of how things are -- how drugs are funded and how drugs are bought and used. And basically, what you do have is the basic difference between the pharmacy channel and the nonretail channel or the hospital channel, right? Things and dynamics are very different depending on what we're talking about. And I'll try to go through the main differences and what we see moving forward. So the big difference is when you think of any drug that's picked up in the pharmacy and there are some slight differences in countries, so I'm generalizing a little bit. Drugs purchased in a pharmacy represent about 75% of the overall spend. And basically, these are out of pocket. There's no payer Basically, no payer, it's a cash market. So obviously that puts a whole different dynamic in how things get used, which drugs get purchased. So you do see -- and what we see moving forward is obviously, when you think about -- let's talk about the OTC part of the business, right, or even some consumer health products, which are more geared towards real health issues, right? You do see things like vitamins really having a boost during the period of the pandemic and will probably -- some of that boost will remain long term as people try to prevent disease, right? So there's all this prevention mentality, which will probably linger within the region and drive growth in that type of OTC or consumer health product, which provides those benefits, right? We will see a lot of postpandemic market accommodations. You think about cough and cold. All of that will accommodate over time with the recovery of the cough and cold market post-COVID. But mostly, there's a lot of economic recovery here, right, so as economies recover, spend on OTC drugs also tends to increase. When you think about prescription drugs within the pharmacy channel, cash market, out of pocket, we do see really the 3 in green, right, cardiovascular, central nervous system and diabetes, really with very high growth prospects within the region, right? That has to do with the aging. It also has to do with the lifestyle habits, which generally tend to be unhealthy. So more diabetes, more cardiovascular needs, but also mental health, right, mental health is, in Latin America, becoming quite a huge issue. It's very prevalent within the population. So you do see those types of central nervous drug systems also with very good prospects in terms of how much spend is going to happen in those therapeutic areas. Innovation is key when you think about Latin America. Typically, new drugs, innovative drugs are very well accepted within the pharmacy retail segment. Growth rates of protected brands are typically in the 20% to 25% range on average in the region and physicians do take innovation quite well in the region, right? Good products are well picked up by the physicians. Obviously, not the entire population can pay for these drugs since this is a cash market, but you do cater to a segment of the population and uptake of such drugs and growth in innovation is very well rewarded in the region. When you think about the nonretail channel, the nonretail channel in Latin America is, and many of the dynamics are, very similar to what we saw to some of the assets in the U.S. and some of the assets in Europe. It's a payer-funded market. No cash market here. So you see oncology being the key driver and growing. In terms of immunology, it's still a key driver, but a lot of biosimilars coming in. And these biosimilars being picked up by public payers very quickly. Within the private market, a little bit different. Still a lot of room for originator brands within the private market. Vaccines, obviously. But here, I think the bottom line on the nonretail channel is that most of the growth here is driven by innovation with the dynamic of payers trying to push back on cost through some of the measures that I depict in this next slide. So I mean, Latin America, as a whole, has a dynamic similar to what we saw in China, right? The government is -- governments are being pressured to provide more access to an aging population. Volume demand is going to increase how are we going to pay for this, right? So most countries, and I'm not going to go through all the details in the slide here, but I'll try to kind of provide the key highlights. Many initiatives to drive more access, right? You have INSABI in Mexico, you have the Ley Ricarte Soto and the cancer law in Chile. Many other initiatives to increase access for innovative and noninnovative drugs in the region. However, not enough funds, clearly not enough funds or spend per capita on health care within the region. So a lot of the initiatives we see in mature payer markets happen here. So centralized purchasing, big topic. You see some less successful and some more successful initiatives of centralizing purchases across the region. You take UNOPS in Mexico, SERCOP in Ecuador, CENABAST in Chile, the list goes on. So many governments continue to try to centralize public purchases within a single tender, right? So that's a big push. Another big push is obviously pricing also, right? Greater control on pricing or greater control on price increases. So we see that happening, for example, in Chile. Colombia is doing some of that. And the same thing happening in Argentina. Last but not least, a move towards seeking more efficiency in how drugs are approved into the formularies, right? So a greater use of the build-out of HTA bodies, right, in some countries like Brazil and Colombia, where you've got some very mature HTA bodies. Other still being built out like Argentina and Mexico. But a greater use of RWE within submissions or the requirement of RWE within submissions or the requirement of our complex modeling within submissions. DRG usage within the health care systems, Chile, applying a DRG within the public health care system. So initiatives that we have seen across mature markets, more and more being used by governments in Latin America to kind of control or have a better or a more efficient spend on medicines to drive more access to their populations. I think that's a broad highlight. Murray, I'll send it back to you, please.

Great. Thanks, Sydney. And also very useful to hear that perspective of a dynamic set of different countries within the region and how they are wrestling with the set of issues that we've talked about in the other regions as well. I'm conscious we are at the 90-minute mark. And so unfortunately, we're not going to have time for questions. So I just want to wrap up by saying, first, thank you to all of you for tuning into this webinar, and I hope that you found it of value. Thank you especially to our speakers, Michael, for his summary of the global report, Hannah, Sarah, Howard, Alan and Sydney for your regional and local perspectives, which has brought a lot, I think, to the discussion. Here's where you can follow us on social media. If you join our mailing list, you'll be informed of our future reports coming out from the institute and other events such as this. I would just close with a short reflection that as I listen to each of the speakers here today, I see us all in every corner of the world dealing with this dynamic around science, which is driving the flow of innovation and which is being encouraged and bringing new therapeutics to patients for diseases where there are significant unmet needs. We're hearing about technology and its embrace and how that affects the delivery of health care, and in that context, the use of medicines. We hear a lot about issues of accessibility, access by patients to medicines and the systems that ensure that those patients who will benefit and get value from medicines are able to do so. And of course, we hear a lot about affordability from a payer perspective, from a budget setting perspective. I always do think that we're having that conversation in a very static way as opposed to recognizing that over time, budgets and share of wealth that is allocated to health care should, in fact, be viewed as something that increases and not decreases. But the issue of affordability is clearly top of mind, both at the governmental, private payer and indeed patient perspective. And then all of that wrapped up with the pandemic and where we are 2 years in, as I said at the outset, and with uncertainty still ahead of us. It brings a level of complexity to all stakeholders in the health care system in terms of how they think about fulfilling their roles including how medicines are used and how those medicines indeed are paid for. So this is a dynamic and ever-changing environment, one that we follow very closely here at IQVIA. We look forward to sharing our further insights and perspectives on the use of medicines and the market for medicines globally in the future. And with that, I will, again, thank you for your interest and participation, and I wish everyone a good day. Thank you very much.