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

Hello, and thank you all for attending today's webinar, MIDAS Early Bird and covering the defining trends of 2023 and what these hold for 2024. My name is Sophie [indiscernible], and I lead the Global Market Insights marketing team here at IQVIA. Our webinar today will be presented by Helena Bayley and Aaron Wright, analyst in the Europe, Middle East and Africa Thought Leadership team at IQVIA; and Tom woods, Senior Consultant in the EMEA Thought Leadership team, will run the Q&A session. In our webinar, Helena and Aaron will take you through 2023 from a growth areas and emerging trends with deep dives into the oncology and immunology markets. Helena and Aaron will then assess the generics and biosimilars sectors and review the obesity market before concluding with an outlook for 2024. And to finish, Tom will lead the Q&A session. [Operator Instructions] Before we begin, I wanted to cover a few housekeeping items. At the bottom of your audience console, multiple application widgets you can use. The Q&A widget to ask your questions. The help widget, if you have any technical difficulty. It has a question mark icon and covers common technical issues. The survey widget, the survey will appear at the end of the webinar, but you can fill it in at any time. We would really welcome your feedback, so you could -- so if you could complete this before you leave the webinar, it would be greatly appreciated. Use the survey if you want to receive today's slides or if you want to learn more about the content of the webinar, or IQVIA-related solutions. And finally, the on-demand version of the webinar will be available afterwards and can be accessed using the same audience link that has been sent to you earlier. And now it's time to start the webinar. Helena, over to you.

Thank you, Sophie, and hello, everyone. As Sophie mentioned, we're going to start by taking a look at some of the key global trends and growth areas in 2023. When we look back at 2023, overall, it was a year which was marked by significant progress in terms of therapeutic innovation. For example, we have the approval of the first ever CRISPR therapy, this was in both the U.K. and the U.S. to treat sickle cell disease and beta thalassemia. We also have the readout of the SELECT trial, which demonstrated the significant impact of the obesity agent, semaglutide on cardiovascular outcomes. But despite this, 2023 was also a year that was marked by the ongoing impact of the pandemic. There are signs of continuing recovery from the pandemic, but the recovery is highly variable, and we expect it to continue to be throughout 2024. When we look at the total volume of the prescription medicines market, which is on the left here, there's been strong recovery from the sharp drop that we saw in 2020. A closer look at this does reveal though, this is a generic volume that's driving this recovery. And we know that generics comprised most of the overall volume in the pharmaceutical market and they've been growing with a CAGR of 4% since 2020. However, innovative volume last year was still below 2019 levels, and it's been making a gradual recovery since 2020. Based on this, it's perhaps unsurprising that innovative launches are struggling overall. But what is striking is the extent of this. So based on full year 2023 data, we've calculated that the uptake of innovative launches is 28% below pre-pandemic levels on average in the 8 major markets. We've seen a similar story in the last couple of years, but where 2023 differs is that there is now starting to be a real divergence between these 8 countries in terms of recovery in launches. So in the U.S. and China, for example, recovery is now looking strong. And actually, where the launch underperformance is now is in the European markets, particularly Italy, and also in Japan. This is evidence of the impact that the pandemic is still having on health care systems and therefore, also on prescription medicine markets. We expect the impact of the pandemic to continue to last through 2024. For example, we know at the moment that health care professionals continue to be stretched. And we've got ongoing patient backlogs. And actually, we also have COVID patients that are affecting the health system capacity whether they're from new waves of COVID or from non-COVID. And so there's a gap between the demands on the health care systems, especially when it comes to the demands of new innovative therapies. And the capacity of health care systems to deliver on these demands. However, despite this relatively weak picture, last year, we saw that the global pharmaceutical market grew in value by 11% which is significantly higher than any other year since the start of the COVID-19 pandemic. So on the left here, you can see that it grew at around 8% to 9% in the last couple of years and 5% before that. So 11% really is a big increase in growth. Here, we've split out the market shares of the major markets. So we have the U.S. top 5 Europe and Japan. And then we also have other Europe, Middle East and Africa, other Asia and Pacific and Latin America and Canada. The U.S. accounts for just over half the market at x manufacturer list price. And its market share has been increasing gradually in recent years. While on the other hand, it's Japan and the rest of the APAC region that have been seeing a slowly falling market share. On the right-hand side, we have a breakdown of last year's growth. So in total, the global market grew by $135 billion last year to reach a total value of almost $1.4 trillion at manufacturer-less price. Around 2/3 of this growth is due to biologics, and these are predominantly specialty biologics, they're mainly for immunology and oncology. And safe immunology, the specialty biologics, which has really contributed to absolute growth in the last year are risankizumab and dupilumab, while for oncology, it's pembrolizumab. The traditional biologics that have been driving growth are the type 2 diabetes and weight loss treatments: semaglutide and tirzepatide. If we look now at small molecules, among the leading fast-growing specialty small molecules are the CDK4/6 inhibitors for oncology, such as palbociclib. While for traditional small molecules, it's SGLT2 inhibitors. So you might be wondering how have these growth drivers changed in the last year? Well, for each of these 4 areas, absolute growth was bigger last year than the year before. But the most notable change is the increased growth for traditional biologics and this is due to GLP-1s. And the entry of these GLP-1s really has been extraordinary. Aside from having standout launches, these companies have developed products that are in such high demand that the demand can't be met at the moment. And it's the ability to supply them that's limiting the uptick. So we know that biologics have been key to driving growth in the last year. But how much of this growth is innovative? On the left-hand side here, we're looking at the contribution to the 2023 market value of innovative small molecules and biologics and also generics and biosimilars. And one of the first things here that we noticed is that innovative biologics are almost equal in value to innovative small molecules now despite having only a fraction of the volume. And this reflects their high value. But what's even more striking is the contribution to absolute growth last year. So looking at the bars on the right, innovative biologics contributed $80 billion of absolute growth which is almost 4x as much as the growth of innovative small molecules. It's also interesting to see that generics actually contributed about the same growth as innovative small molecule as last year. And really, this is partly a result of the relatively low growth rate of innovative small molecules. So innovative biologics really achieving the whole picture here. And there are 3 main areas that are driving that growth. These are immunology, oncology and diabetes. And these are, of course, the 3 mega therapy areas. They represent 40% of the global market value. And last year, they contributed over 60% of all absolute growth. The next biggest therapy areas are not only much smaller, but also Germany have single-digit growth rates. So they're not going to come close to the value of the top 3 anytime soon. One exception to this, though, is obesity. And IQVIA projects that actually obesity might join the top 3 therapy areas to become the fourth mega therapy area within just a few years. And this is something that Aaron is going to come back to later. I think it's also interesting to point out here that the U.S. accounts for 3/4 of the market for diabetes and immunology but under half for oncology, whereas if we look at the EU4 and the U.K., it's the opposite. And actually, these countries have a relatively large share of the oncology market. There are many reasons behind this. And one of them is that in Europe, there are lower levels of obesity. And also there's high biosimilarization for immunology. And these things mean that spending on diabetes and immunology is actually relatively low in Europe. In addition, we know that in the EU4 and the U.K., there's a high willingness to pay for oncology medicines than other medicines. So we've talked about the high value share of the top 3 therapy areas. And in order to maintain this value share, one key area to focus on is the messaging when promoting these products. Messaging needs to be clear, and it needs to demonstrate the value proposition to health care professionals or HCPs, so that their products are used in clinical practice. In terms of time spent interacting with HCPs, the landscape varies by country. So here, we're looking at the EU4, the U.K. and the U.S. for the last few years. The channels that we've got here, the interactive channels are face-to-face meetings, telephone calls and one-to-one remote video calls. And so when we look back at the last few years, the thing that all 6 of these countries have in common is that interactive contact time dropped sharply in 2020 due to the pandemic. If we look at the 3 countries on the right, so Spain, the U.K. and the U.S. These countries pivoted strongly to a combination of remote telephone and face-to-face interactions in 2020. And these are the countries where we see the strongest recovery in interactive time with HCPs. So in 3 of these countries total interactive time has continued to rise through the last year, and the recovery is actually also included a steady increase in face-to-face contact time, but the digital component has remained as well. The U.K. has now hit pre-pandemic levels of interactive contract time but with a different mix of interactive channels. The U.S. really stands out here. It's the only country where interactive time now exceeds 2019 levels. And actually, notably face-to-face time alone is greater than in 2019 in the U.S. In contrast, when we look at interactive time in Germany, France and Italy, it's still well below pre-pandemic levels at the moment. And actually, it's plateauing at around 70%. This is, of course, a challenge for the pharmaceutical industry. And the key thing here is that as there are fewer opportunities to interact with HCPs, each interactive opportunity is more valuable than it was before. And therefore, each interaction really needs to count. One of the ways to do this is to offer omnichannel engagement, which means not only offering HCPs all channels, it means orchestrating them in line with preferences. Incidentally, Germany, France and Italy are actually the countries which pivoted at least strongly to remote engagement in 2020. We also know that different channels have different roles in contributing to the physician's journey when they lend that new product. So face-to-face interactions certainly not being replaced by remote channels. But actually, we're just saying that other channels have a crucial role in complementing face-to-face engagement. The general drop though in interactive time with HCPs that we see in the major European markets here does present a real challenge for the pharmaceutical industry. And this is especially true for therapy areas like oncology. Oncology is a highly innovative therapy area. It has a lot of new launches. And therefore, it's really important to be able to have sales reps in front of customers to explain the value proposition of the new product. Despite this challenge for Oncology though, the global oncology market grew by 13% last year. And this rate is faster than the overall pharmaceutical market. We've already seen that oncology remains the highest value therapy area. And actually, IQVIA projects that the oncology market will grow even faster in the next 5 years. And it may reach a total value of $440 billion in 2028, which is about double its current value. And in the last couple of years, it's been solid tumors that have been driving growth in this market. Solid tumor therapies make up about 3/4 of the total oncology market. And their growth rate, which is shown in yellow here, has been consistently higher than that of the pharmaceutical market as a whole. On the other hand, hematological cancer therapies had been growing quickly until 2022. But at this point, the growth rate took a dive to 7%. And this was partly due to generics entering the market for lenalidomide and bortezomib. So we saw that growth in heme started to recover last year. But at the moment, it's still lower than the average growth rate for the pharmaceutical market. On the right, we have the regional breakdown of the oncology market as a whole. So the LatAm bar is looking at the market share last year by region. And then the right-hand bar is looking at the absolute growth contributions last year from these different regions. So we've already seen that the U.S. has the highest market share. As I mentioned earlier that the EU4 and U.K. actually have a relatively high market share here at 25%. And generally, when we look at the regional breakdown of growth in the last year, it reflects the regional market shares. There are some small differences. For example, the LatAm and Canada region is growing fast, whereas the APAC region had relatively small growth last year. And interestingly, if we separate out solid tumors and hematological cancers, we find that actually the U.S. accounts for particularly high proportion of growth in heme, whereas the EU4 and the U.K. is the opposite. In these countries, there's this proportionate growth in the solid tumor market. So you've seen that it's solid tumors that are currently driving growth, and we can understand the dynamics even better if we break this down by indication. In this bubble chart, we're looking at the top 15 tumor types globally. The solid tumors are in light blue here and the hematological cancers are in dark blue. And the bubble size represents total sales in 2023. On the x axis, we have the historical 5-year growth rate. And then on the y axis is the forecast future 5-year growth rate. So any indication that's above the diagonal line on this chart is 1 that's forecast to see growth accelerate in the coming years. So we know that solid tumors dominate the oncology market, and we know they're driving growth. And the top 3 solid tumor types are breast cancer, non-small cell lung cancer and prostate cancer. For all 3 of these, we expect growth to accelerate. And this is significant because these types of cancer are already high in value. So combined with a really high future 5-year growth rate, we expect them to account for about half of all the oncology aptly growth in the next 5 years. Looking at hematological cancers, multiple myeloma is the biggest heme market at the moment. and its growth is set to decelerate. While leukemia will continue to grow at a similar rate to its historic growth. In some of the smaller indications, there are also some interesting dynamics. So in February, we saw the first FDA approval of a CAR T therapy for a solid tumor. It's called Amtagvi and it's been approved for melanoma. And 2 other tumor types that stand out on this chart are small cell lung cancer and liver cancer because they both have unusually large historical growth rates. And for both indications, it's due to 2 checkpoint inhibitors having entered the market, and we predict that these checkpoint inhibitors will continue to drive growth here. Checkpoint inhibitors have, of course, been driving growth in many areas of the oncology market recently as have other innovative biologics. As a result of this, oncology biologics have been rising in value rapidly in recent years. And in 2023, they are almost equal in value to oncology small molecules despite representing any fraction of all oncology Rx volume. The high growth rate is illustrated by the bar chart on the right as well. Overall, biologics comprised 70% of oncology value growth last year. And this was always entirely from innovative biologics and it's just 1% that came from biosimilars. As I mentioned, checkpoint inhibitors contributed substantially to this growth. They comprised 60% of innovative biologic growth last year. And it was mainly the PD-1 and PD-L1 inhibitors behind this, such as pembrolizumab and also durvalumab, which is approved for several different indications. There's also a LAG-3 blocking antibody combination, which had a notably high growth rate last year. But aside from checkpoint inhibitors, what are the other innovative biologics that are driving growth? There are a couple of classes of biologics with novel modalities that are important here. The first of these that I want to talk about is antibody drug conjugates, or ADCs. These consist of a monoclinal antibody which targets the tumor and it's linked to a highly cytotoxic T mode. And HER2 is a well-known HER2-targeted ADC used to treat patients with HER2 positive breast cancer and its total sales more than doubled last year. Bispecific antibodies are another very fast-growing class of biologic. Bispecific antibodies have been developed to address drug resistance and improve efficacy. And they recognize and bind 2 different antigens. And last year, bispecific antibodies had a growth rate of over 100%. There are many more bispecifics in the pipeline, primarily focusing on hematological cancers. And there are also many novel ADCs in clinical development at the moment. So these biologics will continue to be important, definitely in coming years. Finally, we'll just take a quick look at small molecules in oncology. So here, growth comes from both innovate small molecules and generics, a bit like what we saw in the earlier slides, the whole pharmaceutical market. And in fact for oncology, generics had an 8% market share last year, but a 10% share of absolute growth. So their market share is slowly increasing. Among the highest value and fastest-growing generics are lenalidomide, which is used to treat hematological cancers and abiraterone acetate, which is for advanced prostate cancer. But overall, it really is biologics that are changing the oncology landscape at the moment. Another interesting therapy area where biologics play a key role is immunology, and Aaron is going to take us through this now. So over to you, Aaron.

Great. Thank you very much, Helena, for all of that information. And just a reminder to all our attendees, we've already got a lot of questions coming in about the content so far. But please do keep adding your questions into the Q&A session -- into the Q&A box, and we've got a session at the end where we will talk through them. And then with that, let's talk about immunology and the immunology market. So as Helena mentioned, it is 1 of the top 3 most valuable therapy areas globally. The chart on the left-hand side here is showing us the sales of immunology over the past 5 years, and we've split it here by sales for autoimmune products and indications and allergic inflammation, products and indications. So autoimmune indications are those such as rheumatoid arthritis and psoriasis and the IBD conditions, Crohn's and ulcerative colitis. Rheumatoid arthritis and psoriasis make up about 25% each of the autoimmune market. So they're the dominant product in that space. And allergic information is primarily composed of sales in atopic dermatitis and allergic asthma as well. And we can see that allergic information has been growing considerably faster as a subsection of immunology compared to the autoimmune market. We've seen highly successful launches recently in this space. Helena mentioned dupilumab, for example, in this space. And it's quite an immature market in the prescription market, and that's why we're seeing this high growth rate that is slowly decreasing as the market slowly matures, but it is still a minority in the immunology market, it's only around 10% of the total immunology market. It's really dominated by these autoimmune conditions. In terms of the regional breakdown, we saw this previously on a similar slide -- on a previous slide to Helena around 75% of the global sales are coming from the United States. Helena also mentioned a couple of reasons for that. The United States is a bigger market. And we've also seen the entry of biosimilars in the immunology sector within Europe, noticeably adalimumab. And when it comes to the growth in immunology, this is, again, heavily skewed towards the United States as well, with over 80% of the growth attributed to that country. Though, of course, because this is such a valuable therapy area, it is also an area where a lot of effort is put into the promotion of these products. And so what we're looking at on this slide is the promotional spend on immunology-focused products, and we're looking at promotion to dermatologists, rheumatogists, gastroenterologists and also direct-to-consumer marketing in the U.S. as well. And what we can see here is that there was a flattening of the promotional spend in immunology between the end of 2019 and 2022. That's pandemic-related effects. We've already seen in terms of the contact times and contact hopes in the pandemic, that's changed quite drastically and decreased on Helena's slides. But in the past year, we've seen a recovery in the promotional spend in immunology. And now as a result, this promotional spend is an additional 41% above pre-pandemic spending levels. This is an area that is heavily dominated by the top 10 companies when it comes to spending. So we've got the top 10 spending here. That attributes to around 90% of the immunology-focused promotional spend here. And then within that, AbbVie is the leader with 36% share at the end of 2023. So lots of spending, lots of activity in immunology, which is always good to see. And we can also take a look now at some of the specific indications within immunology. We're going to start by looking at psoriasis where we are seeing steady forecasted growth rate of around 5% out to 2028. This is a fairly mature market. I already mentioned that it's one of the major players, one of the major market sizes when it comes to immunology, growing from around $40 billion to nearly $50 billion in 5 years. There's also, of course, going to be impacts in the psoriasis market from entry of biosimilars, entry of ustekinumab biosimilars is expected shortly. And we also -- we've also seen the impact of adalimumab biosimilars in the United States as of 2023. This chart though, splits the sales in psoriasis by the mechanism of action of the products in this area. And what we can see is that it's primarily IL-23s that are responsible for sales here, nearly 41% of the market share by 2028. We can see anti-TNF products are seeing a decrease in the share of value as well. But there's other players coming in, new products launching, and we're seeing new methods of delivery as well, such as with topical formulations in the prescription psoriasis and space. Moving on, we can also take a look at the IBD conditions that Crohn's disease and ulcerative colitis. We have got Crohn's disease on the left-hand side, ulcerative colitis on the right. And there are quite different competitive dynamics in these indications, although they're both these inflammatory bowel diseases, there are different dynamics but there are some similarities. So for example, in both CD and UC, we can see anti-TNF products having a significant reduction in their share of value between 2018 and 2023 and then again, between 2023 and 2028. In the case of Crohn's disease, they're reducing share from 2/3 down to 1/3. And in ulcerative colitis, down from around about 1/2 to 1/4 of the value in 2028. The other similarity that we can see here is the growth of the IL-12/23 products in both therapy areas again. And that's over the past 5 years, these have gone from essentially no market share in ulcerative colitis and 16% in Crohn's to much, much greater proportion, 1/5 in UC and 2/5 in Crohn's, over the next 5 years, there will be very slight decreases in their share of value, but it mostly -- they mostly maintain that share. Furthermore, we are seeing growth of IL-23 products in both Crohn's and ulcerative colitis. And there are also, again, oral formulations and products in this space as well, particularly in UC, where we see the JAK inhibitors, the red section there maintaining their share of between 8% and 10% over the next 5 years. But those markets will again be affected by biosimilars. Immunology will be quite exposed more broadly to biosimilars in the next 5 years. But now we can look at what will be the overall impact on the total pharmaceutical market over the next 5 years from losses and exclusivity and the entry -- potential entry of biosimilars for these products. So for the total global pharmaceutical markets over the next 5 years, it's nearly $200 billion at risk due to the availability of biosimilars. That's primarily being driven by the entry of generics for small molecules. That's the green sections here, but around 30% of the losses are attributable to biologics. So some of the small molecules that we might see the entry of biosimilars 4, things like dapagliflozin, I've always trouble to pronounce that. And Apixaban, you might also see for biologics, things like mepolizumab biosimilars as well. So there are certainly -- there are certainly a lot of the market at risk from this, but biosimilars do need to get their market share. They need to have a decent uptake. And what we can see here is the uptake curves for biosimilars in Europe on the left-hand side and in the United States on the right-hand side. Here, we're looking at the share of treatment days. So this is a measure of volume as opposed to value. We've got a few molecules where we have seen the entry of biosimilars, the date of entry of those biosimilars in the markets. And we've normalized the launches of these biosimilars, so that it's all from 0 months. So we're looking at the first 36 months following the entry of biosimilars into these markets. From what we can see is that -- after around a year, the biosimilar market is averaging 30% of treatment days of the volume. And then after 24 months, it's around about 50%. But we can also see that there's a pattern when it comes to the gradient of the uptake curves for these products depending on when we saw them enter in the market. We can see that more recent launches tend to have steeper gradients, tend to have quicker uptakes of these biosimilars, and that's a reflection of the increasing comfort that health care professionals, health systems, and other stakeholders are feeling surrounding biosimilars and the use of them as opposed to originated products. Of course, one of the major stories of 2023 was the entry of adilimumab biosimilars into the U.S. market. So you can go and take a quick look at how adalimumab has been performing in the United States. On the left-hand side, we've got the uptake rates for United Kingdom, and we can see that adalimumab is roughly in line with other biosimilars. The U.K. is typically a market that is fairly keen and fairly quick to use biosimilars. On the right-hand side, we can see Japan has fairly low uptake of adalimumab, but there is generally fairly low uptake of biosimilars in Japan. It's the U.S. that we really want to talk about. And here, we can see the uptake is much lower for adalimumab than is for other biosimilar products. And there's a few reasons for that: pricing structure and incentives in the U.S. differ from the U.K. and Europe, for example. But we've also seen that the entry of biosimilars -- adalimumab biosimilars has helped or has reduced the cost of the originated products but the originated product is maintaining the overall volume share when it comes to 2 treatments. Remember, we're looking at the volume here in this case. Moving on then from biosimilars to look at generics. What we've got in this slide is the top 10 generic small molecule therapy areas. So it's not the therapy areas with the highest value of small molecules. It's the highest value of generic small molecules. And we can see that it's topped out by pain and antibacterials. They both have quite low growth rates over the past 5 years. In pain, for example, there has been concern around the use in prescribing of opioids. We've seen reductions in prescribing that is affecting the sales there. And in antibacterials, similarly, this concerns around overprescribing and of potential antimicrobial resistance, certainly, especially in developed markets. And so that's both -- they've both been affecting the growth of these markets. Of the top 10 global therapy areas by total sales, which were oncology, immunology and diabetes, we can see only oncology is in the top 10 for these generic small molecules. Diabetes is down in #15 and immunology, all the way down in a number 42. So oncology is actually the first specialty area -- specialty therapy area, 4 generics that is driving growth. We can see it's the only 1 here with a double-digit 5-year CAGR. And in total, the global market for these generics more molecules is nearly $300 million, which is around about 1/5 of the total global prescription market. Again, we're just leading with prescription products here. We're not including over-the-counter once as well. So now we can look at how these generics are being used? What is the kind of uptake similar to the biosimilar uptake curves that we just looked at, what is the generic utilization. Again, this is a volume measure. We're looking at standard units. And we can see here that the United States is the most -- is the developed country with the highest utilization of generics at 90%. And that puts it in line with some more developing markets like India and Brazil, for example. All of the countries that we've got here though have seen positive growth in the use of generics. The one exception is Poland, but it's a negligible decreases. It essentially remains the same. What it does show on this chart though is that the EU5 or EU4 and U.K. countries here have different levels of generic utilization. The U.K. and Germany, which tends to push down, which have tended to have quite strict pushing down on prices, have this high utilization, whereas countries like Spain and Italy historically have southern areas -- southern regions that prefer to use branded medicines and they've got this lower utilization overall. We can also take a quick look at China, which has generic utilization of 80%. And locally manufactured generics are likely to be making inroads into the markets in China that are being controlled by -- or that are being held by the off-patent originators that China is also looking to increase its share of innovative products as well. And so that's also going to affect the generic utilization overall. One area though where there is certainly a lot of activity, and there are certainly a lot of interest, Helena alluded to at the start of this presentation, is the obesity market. And what we've got here is a forecast of the potential value of the global obesity market. So in 2023, spending on obesity pharmacotherapeutics was around about $23 billion, and that's up from just $3.2 billion in 2020. So it's been a huge increase already. And the demand for these products, again, as Helena mentioned this, is very high, but there's also a lot of need for them as well. It's estimated that by 2035, around about 25% of the global population could be suffering with obesity. That's defined as above 30 BMI in this case. And that's not even considering the people with overweight as well. And of course, in many countries at the moment, especially in Europe and the United States, there are already high levels of obesity -- people with obesity. So the demand is certainly there, and this is reflected by the very large share of the sales, which is coming from out-of-pocket expenses -- out-of-pocket spending, sorry. So in Europe, around 80% of Wegovy sales that the CEO reported recently, were coming from out-of-pocket expenditure. So there's certainly lots of demand for these. As to the forecast for what this market could be in the future, at its most optimistic, IQVIA is forecast around $131 billion globally by 2028. That's from a standard estimation of $74 billion and the low estimate of $39 billion by 2028. And there's a myriad of factors that could affect what this market looks like in the future and the size of the market as well. Some of the key ones here are the expanded access to markets and reimbursable markets as well is the cardiovascular benefits of these products, the updated treatment guidelines and longer treatment durations as well. So for example, when it comes to reimbursement, I've already mentioned that most of the expenditure certainly in Europe is coming from out of pockets. But in many countries, these weight-loss products are seen purely is cosmetic. Actually, they're not allowed to be reimbursed Germany is an example of that, although EU countries are looking at changing this. One of the major ways that were -- one of the major shifts that is causing this is the cardiovascular benefits that these products could offer. So last year, we had the SELECT trial, again, as Helena mentioned, for Wegovy, which showed that these weight-loss products can have additional benefits we can have things like positive cardiovascular outcomes. And that is a huge, huge point in increasing the appeal of these products. Furthermore, having updated treatment guidelines for these products will help developed markets. So traditionally, in the United States, only around about 2% of people with obesity were treated with pharmacotherapeutics, again, for a variety of different reasons. But these clear benefits, hopefully, will cause changes to these treatment guidelines and cause increasing usage of pharmacotherapeutics in treating obesity and associated conditions. And likewise, clinical evidence has shown that these products can have -- can offer sustained weight loss at a higher level than previous products and for longer periods of time. And that could lead to patients being on these treatments for longer periods in order to lose the weight and to keep the weight off. But of course, there are other issues as well that could be affecting the obesity market. Supply chain issues have been quite prevalent in the news recently. And there's other factors that could be affecting this market. But one area of these obesity therapeutics that are certainly receiving a lot of attention as well as a subspace is the oral products in here. So of the clinical stage obesity pipeline, around about 1/3 of the products are these oral products that are being trialed, and it could be worth up to 20% of the obesity market value by 2030. When it comes to the advantages of overall products, these are much in line with the benefits of oral products in other therapy areas and indications. They can be more convenient for patients. They avoid having to use needles for people with fear of needles. They have lower cost of goods, and they have a simple supply chain as well. And, of course, these products still will need to demonstrate their efficacy, but it's a good opportunity for companies, especially late entrants to the obesity market to be able to differentiate their products, although, of course, it is worth noting that the existing big players in the space, Lilly and Novo have their own orals in development. And in fact, just recently, Novo got some positive results for its next gen and oral obesity protein Phase I clinical trial as well. So that's lots of useful innovative insights there. In conclusion, what can we really take away from this presentation. When we look at the global market, the health care capacity gap remains a challenge for the uptake of medicines, particularly of innovative medicines, where there is this demand for them, but there is issues potentially with the ability to supply these products. Similarly, launches will continue to struggle in countries, but it's not -- launches are not striving equally across countries. The United States and China are leading the recovery in that sense. For oncology, it will remain the engine of growth, and we'll see the expiration of new combinations, how they mentioned the immunotherapy ADC combinations. And additionally, there will be greater interest in new tropicalities such as radioligand therapies. In immunology, the allergic information market, whilst smaller than auto new is growing significantly faster, and we've seen the primary spending has recovered after a pandemic flattening of that spending. For generics and biosimilars, these are going to remain in the cartons for health care systems and for payers, especially due to the macroeconomic impacts that we're seeing globally. But nearly $200 billion is at risk of loss of as at risk due to LOE events out to 2028 and generic utilization, there's still room for improvement in European countries. Finally, on obesity, could be the fourth most valuable therapy area by 2028. But there's many benefits to these products, but there are still challenges to overcome, one of which is creating these reimbursable markets in many cases. So thank you very much for listening. We'll now have a Q&A session, but just before we get into that. I wanted to make you aware of some of the latest thought leadership content that we've got, particularly webinars on launch excellence in rare diseases and our quarterly pharmaceutical market outlook, where we'll be talking about 9 key trends for 2024 and beyond. Please do register for those if you want more insights from IQVIA here. We've also got some recent publications. All of this can be accessed via the IQVIA website, and we also have the IQVIA Insight newsletter from Global Market Insights if you want to receive additional insights and content as well. So thank you very much for listening. And I'll hand over to Tom, who will be moderating the Q&A.

Excellent. Hello, everyone. My name is Tom Woods. I also work on the Europe and Africa Thought Leadership team at IQVIA. And I think the first thing for me to say is just to thank Helena and Aaron for all the hard work and insights that they put together in this presentation. I know that a lot of hard work have come into it. And hopefully, it's been an enjoyable session to you all today. So we've got about 10 minutes left, and I appreciate that some of the questions have already come in on the chat. So please do continue to put them on there by the widget bottom your screen. But the first question, I'm going to turn to is one for Helena. And it's a topic that has come up a lot in the question-and-answer session, but there's a lot of variation between countries and this mixture of channels that are being used for HCPs. So at the bottom line is what's causing this difference in the channels being used for HCPs.

Yes, that's definitely true. There are many different factors behind this and reasons for the variation between different uses of channels in different countries. One of the main reasons is that there are different cultural expectations in different countries. We know that historically, physicians in different countries have different preferences. And actually, I keep you some interesting announcements recently on channel preference among HCPs based on primary research and this analysis found that the country where the HCP works is 1 of the main factors affecting their preferred balance of channels. And our specialty is another thing that affects their preference. So preference definitely is a big factor here. Something else that's important is the different demographics of HCPs in different countries. So for example, we know that in Italy, according to the OECD, 56% of medical doctors were over the age of 55 in 2019. And this means that overall doctors in Italy are older than in the other EU foreign U.K. countries. And so they generally have a higher affinity for engaging by traditional inpatient channels. as opposed to digital channels. So there's just a few different reasons behind that.

Excellent. Thanks, Helena. Very good. Well explained. So I've got a question for yourself, Aaron. So you talked a lot about biologics and biosimilars, but which biologics are seeing the most biosimilars being developed for them?

Yes. So it tends to be -- well, biologics quite some has been developed for biologics that are in the near future going to be using exclusivity, of course. But when it comes to where we're seeing the most development, it is 4 biosimilars that have the highest sales value, quite frankly, generally. It's not quite a perfect trend, but generally the more valuable, the originator, the more biosimilars we see in development, thadalimumab I think has least 9 or so that are looking to enter the market. But when we get to the lower value originated biologics, we can actually see there's quite a lot of them that do not have a biosimilar in development. This is kind of biosimilar voids, you could almost call it. And I keep you've done a report on this that you can take a look at where because the production of biosimilars is very complex. It's much more complex than for small molecule synthesis. For example, there's also -- in many cases, these biologics with lower sales values might be for very specific indications or for rare diseases, which is going to make finding patients for clinical trials harder and it's going to make marketing them harder than finding the HCPs and the patients like I said. So it's certainly an area of interest and concern that these products, they just might not face by us in the competition if they've got a smaller overall sales value. Yes.

No, absolutely. And I think, as you say, Aaron, there's GBP 200 million -- GBP 1 billion, sorry, LOE deficit cliff that we are potentially facing in the next few years. So definitely want to look out for. Okay. Let's go back to Helena on this one. So is the pandemic continuing to have a significant impact on the oncology market and oncologists in particular?

Yes, it is. So as I mentioned earlier, face-to-face interactive time between sales reps and oncologists is down compared to pre-pandemic and this is particularly the case for oncology actually compared to some of the therapy areas. But there's also some IQVIA primary research that was done in the middle of last year that shows us a significant number of interactions between oncologists and patients also remote now. This research was looking at the EU4, the U.K. and the U.S. So obviously, the interactions between oncologists and patients used to be almost entirely face-to-face. And we know that physicians are generally less willing to prescribe new products for patients remotely. And therefore, this is a challenge for pharmaceutical companies, especially for newly launched oncology product. Because we know that new launches, in particular, suffer if there's a lack of face-to-face interaction between physicians and patients. Yes.

Yes, it's absolutely right. Okay. Probably got time for 1 or 2 more. I'm going to go back to the obesity question because obviously, that is something that is really shaking up the industry right now. And the question is what can pharma companies do to help encourage the development of reimbursable market for obesity products?

Yes. No, I understand why people are interested in this area. The more answer really is data, having the data to prove the effect of these products is going to be hugely, hugely important, not just from RCTs or clinical trials, but also from real-world evidence studies as well. Because this is such a large patient -- potential patient population because there are so many associated factors with obesity and different causes and the ways to stratify patients being able to get the data to show to regulators and to help technology assessors in Europe as well. These products are justified will be vital. The economic impact of obesity are already huge. I think it's around $2 trillion globally due to people with overweight or obesity. That's not just on health care treatments, but that's also due to effects on productivity, for example. And so if you can demonstrate that these products can not only increase weight loss, but can keep the weight off and have additional beneficial cardiovascular outcomes that could then reduce the need for medicines in other areas, for example, to reduce the medicines patients are taking or that can increase productivity as well, that will be hugely beneficial. So yes, data and lots of it.

Excellent. Thank you, Aaron. I think I was going to wrap it up there, but I've got one more question, and I really like it. And I think it's one for you, Henner, around what are some of the biggest challenges facing innovators in oncology.

Okay. Yes. So one of the main challenges in oncology at the moment is the competition that we're seeing in terms of innovation in oncology. There's so much commercial potential in oncology. And this keeps attracting more players, more companies. So most of the top 20 pharma companies are involved in innovating, but also hundreds of emerging biopharmaceutical companies as well. And so not only do we have more competition, but this also leads to greater complexity. It leads to fragmentation of the market because we're seeing increasingly small patient populations being targeted for new therapies. And also it gives payers more choice so payers can exert greater leverage as there's more intense competition between different therapies, different indications. And finally, cap offs are lagging. So in many cases, they're not actually equipped to adopt novel innovation and they require significant reconfiguration. So these are just a few of the challenges in terms of innovation. And really, it means that companies need to rethink their commercialization approach in oncology. And we have a white people on this as well. You can find us on our website written last year.

Excellent. Thank you, Helena. And I think we're nearly at the -- out of time. So thank you very much, everyone, who submitted your questions, and I will hand back to Sophie to close the webinar.

Yes. Thank you, Tom. Thank you, Helena, and Aaron as well for sharing all these valuable insights as well, it was very insightful and great to hear. And thank you all for attending our webinar today. If we didn't get to your questions because we had a lot of questions coming, don't worry, we will follow up with you via e-mail. And for those who asked for the link to the recording, you will receive it via email anyways. And before you leave, really, it would be greatly appreciated if you could fill in our survey, and you can use the survey to request for the slides as well, if you want to receive them. Okay. So with that, we'll conclude the session. And thank you very much, and have a good rest of your day.