EngageTalent ImproveProductivity Hewitt2010CPRDSResultsSharing Sept 21th2010 OverviewofHewittR DCenterStudy Hewitt2010CPRDSParticipantList Totaling31 Today sContent OverallMarketUpdatePharmaIndustryandR DSectorOverviewEngageEmployeetoImproveProductivityBasedonHewittEngagementModelAppendixEngagementDriverDefinitionAboutHewitt Marco economicSituationintheWorld Datasources 1 InternationalMonetaryFundDatabase2 ChinaCPIfromNationalBureauofStatistics PRC3 EconomistIntelligenceUnit Australia India Japan Singapore Thailand UAE China ChinaMarketMovement Datasources 1 NationalBureauofStatistics PRC2 HewittChinaSalaryIncreaseSurvey1995 20103 InternationalMonetaryFundDatabase4 OECDStatistics China sSourceofGrowthisShifting Chinahighgrowthinthepastyearshasbeenmainlydrivenbyimprovementinallocativeefficiency particularlyreallocationofhumancapitalRuralvs Urban Centralprobablyforanother10 15years Sustainabilityofgrowthinfuturemuchdependsonimprovementinproductiveefficiency thatis technologicalinnovation AllocativeEfficiency productionfactorsmovefromlowproductivity lowvaluesectorstohighproductivity highvaluesectors pricemustberight ProductiveEfficiency Increaseinproductivitythroughtechnologicalinnovation incentiveforinnovationmustberight DataSource ProfessorWeiyingZhang PekingUniversity ChinaBeatingJapanintermofShareofTotalGlobalR DSpending DataSource Battelle R DMagazine TheGovernmentistheMainSourceofChinaR DInvestment DataSource OrganizationofEconomicCooperationandDevelopment2009 BreakdownofChineseR DInvestment DistributionofChinesePatents DataSource QueenMaryUniversityofLondon 2009 EmergingEconomicsDrivingGlobalR DGrowth DataSource R DMagazine Battelle OECD IMF CIA 2008 ScientistsandEngineers MillionPeople R Das GDP Today sContent OverallMarketUpdatePharmaIndustryandR DSectorOverviewEngageEmployeetoImproveProductivityBasedonHewittEngagementModelAppendixEngagementDriverDefinitionAboutHewitt SlowingGlobalPharmaGrowthwithParmergingGrowthOutpacingtheRest DataSource MinistryofHealth IMS CITICS MarketSales BillionUSD IncreaseRate PharmaMarketGrowthintheWorld PharmaMarketGrowthintheWorld 40 AmongGlobalInnovationTop20CompaniesarefromPharmaIndustry IncreasingExpenseinPharmaR DbutDecreasingOutput Strongneedstoimprove 1 CapitalEfficiency 2 R Dproductivity DataSource PhRMA 2007 FDA TheRoadtoPositiveR DReturns ImproveProductivity IncreaseROI ScientificinnovationisnottheonlyroutetohigherR Dproductivity Attentiontothefamiliarmanagementareasofcost speed anddecisionmakingcanstillreaprewards DataSource MicKinseyQuarterly Feb 2010 CostOrganizationalandProcurementIssuesMoreAggressiveoutsourceselectednoncoreactivitiestolow costlocationsReducethecostsassociatedwithdrugfailuresbyFocusingontheactivitiestrulyreducingriskoffailureSharingriskwithothers SpeedClinicaldevelopmentplanning goodvs poor PatientRecruiting quickvs slow Siteandinvestigatormanagement optimalvs suboptimal DecisionMakingShiftcompoundattritiontoearlierstagesChoiceofcompoundsforInvestment AllMajorBigPharmasHaveSteppeduptheirInvestmentsinChinainthePastOneorTwoYears Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Bayer Scheringwillinvest100milEurotoestablishitsR DcenterinBeijingtoenhanceitsglobalR Dcapability Johnson JohnsonannouncedthattheywillbuildupitsAPACR DcenterinShanghaitoconsolidateitsR DcapabilityinBeijing MumbaiandBangaloreandwillhavewidecooperationwithuniversitiesinChina AstraZenecainvesttoestablishitsnewChinaoperationcenterandpartofitsAPACfunctioninShanghaiItsnewR Dcenterwillstarttousein2012inShanghaiZhangJiangHigh TechPark Novartisinvested 1BinR DinChinaoverthenext5yearsandwillpay 125milliontobuyan85 stakeinChinesevaccinemakerZheijangTianyuanBio Pharmaceutical RocheannouncedthatitsAsiaoperationscenterisbeingestablishedinShanghaiandthatChinawillserveasacoredevelopmentregion atthesamelevelastheUSandGermany PfizerPfizerEMPresidentannouncedinteresttopursueacquisitionsinChinatoaccelerategrowthPfizerexpanditsmanufacturerplantandR DcapabilityinChina MerckSeronoplanstoestablishitsglobalR DcenterinBeijingandwillkeepinvestabout150milEuroforthisnewcenter NovoNordiskplanstodoubleinvestmentinChinaR Din3yearstobethe2ndlargestglobalR Dcenter BIToinvest 240MinR DandmanufacturinginChina GSKShanghaiR DcenterconsolidatedasthesoleglobalneuroscienceR Dsite Q2 2010 Sanofi AventisDecidedtoestablishitsAPR DcenterinShanghai CROBenefitsfromPharmaMovingUptheValueChain CROinChina Todayataglace298registeredChinese basedclinicaltrialsin2007 ayear on yeargrowthof41 RapiddevelopmentinbiotechcapabilityMovementtowardsgenomicsandgenetherapyIncreasingabilitytomeetwesternstandardsindrugqualityandsafety TheChallengesThelackofenforcementofIPlawsThedifficultiesinrecruitingexperiencedtalentforprojectmanagementaswellasinretainingthemLargelyfragmented AnoutsourceddestinationDespitetheproportionallysmallbaseof1 ofthetotalglobalCROrevenue China sattractivenessattributableto Costandtimesavings suggestively50 Talentpool Patientpool Animalresources Rapideconomicdevelopment TheTrendsEmergenceofone stopserviceprovider fromdrug