| why and how big pharma are using cros | 13 jan 2011pass2.pdf · need to find new more cost...
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| Why and how Big Pharma are using CROs | 13 Jan 2011
Why and how Big Pharmay gare using CROs
Successful Drug Development – Biotech SwedenMalmö, 13 January 2011
Objective of presentationj
1. What is driving the use of CROs?2. Outsourcing strategies and models3. AstraZeneca Case studies3. AstraZeneca Case studies
| Why and how Big Pharma are using CROs | 13 Jan 2011
Why do big Pharma outsource R&D activities?
Need to find new more cost effective solutions to deliver drugs. Stems from key and increasing external pressures like:• Regulatory environment and requirementsRegulatory environment and requirements• Pricing pressures from payors
Combined with major patent expiries and challenges of j p p gmaintaining healthy pipelines this has driven:• More externalisation and R&D collaborations• More R&D outsourcing to provide flexibility and more
effectively manage internal costs
| Why and how Big Pharma are using CROs | 13 Jan 2011
Other drivers for Outsourcing
Reasons for outsourcing differ between organisations
Typical reasons Sponsors Outsource 1)
Reduce and controlti t
Reduce time to market
The resourcing/outsourcing strategy must be aligned with the corporate strategy, goals
operating costsImprove/focus on company corebusiness/competency
Access capabilities not otherwise availableelsewherep gy, g
and objectivesbusiness/competency elsewhereService/qualityimprovement
Free internal resourcesfor other purposes
Organisational strategy Reduce risk
Competitive advantage Gain flexibility
Skill enhancement Industry transformation
1) Turning Lead into Gold: The Demystification of Outsourcing. Peter Bendor-Samuel. Executive Excellence Publishing; 1st edition (October 1, 2000)
Skill enhancement Industry transformation
| Why and how Big Pharma are using CROs | 13 Jan 2011
Is there a change coming up?
Covance & Sanofi ink 10-year, $2.2bn strategic R&D alliance
GSK selects Parexel and PPD as strategic CROs
Covance’s R&D partnership with Lilly expands
Icon and Parexel partner with B-MS to support clinical dev
Source: News Headlines 2010 from Outsourcing-pharma.com
| Why and how Big Pharma are using CROs | 13 Jan 2011
The Functional Service Provider (FSP) model
Project/study ownership remains in-house but functional providers used as needed.Data Management and monitoring but also other services likeData Management and monitoring but also other services like site initiation, investigator contracting, medical writing etc.
• Benefits- Flexibility- Quality control and oversight- Lower costs (?)
• Risks- Costs of oversight and study set up- Multiple handovers & interfaces- Accountabilities not clearly defined
| Why and how Big Pharma are using CROs | 13 Jan 2011
The Full Service outsourcing model
Limited number of CRO pre-qualified to run all or most elements of studies. Sometimes referred to as Preferred Provider model.
• Benefits- Limited oversight and interfaces- Shift of accountabilityy- Time saving (?)
• Risks- Lack of control- Cost and contract management
| Why and how Big Pharma are using CROs | 13 Jan 2011
Other Approaches and Terminology
There are a number of sourcing approaches being used in the industry. Examples are:• ‘Tactical Outsourcing’Tactical Outsourcing
- New solutions and/or providers for every new study• Sole Sourcing
- A defined service area sourced to one provider onlyp y• Business Process Outsourcing (BPO)
- A defined business process and set up with (one) external provider
• Offshoring- Provider delivering services from low cost region
• Insourcing- Hiring of dedicated staff on- or off site
• Asset/staff transfer• Mixed models
| Why and how Big Pharma are using CROs | 13 Jan 2011
AstraZeneca clinical case studies
| Why and how Big Pharma are using CROs | 13 Jan 2011
AstraZeneca clinical case studiesTh E t l P id M t T (EPMT)The External Provider Management Team (EPMT) ModelA Full Service and Sole Sourcing model for outsourcing of late phase clinical studies
• Features- Demand managed centrally- One CRO selected per therapeutic area- One CRO selected per therapeutic area- ’All’ study services performed by the CRO- Dedicated interface team (AZ/CRO) managing all studies
| Why and how Big Pharma are using CROs | 13 Jan 2011
AstraZeneca clinical case studiesD t M tData Management
A Functional Service Provider and BPO type Offshoringmodel for data management of all internally managed late phaseclinical studiesclinical studies
• Features- Pre-defined demand- One provider primarily based in India- Provider staff also on AZ sites- Dedicated interface team managing all activities- Robust governance structure
| Why and how Big Pharma are using CROs | 13 Jan 2011
AstraZeneca clinical case studiesTh Cli i l Ph l Alli (CPA)The Clinical Pharmacology Alliance (CPA)
A Full Service and BPO/Sole Sourcing type model for the delivery of all activities of all Clinical Pharmacology studies in the AstraZeneca portfoliothe AstraZeneca portfolio
• Features- Pre-defined and transparent demandp- One provider using sub-contractors as needed- Outcomes based and hugely simplified cost model- Dedicated interface team (AZ/CRO) managing all studies- Robust governance structure
| Why and how Big Pharma are using CROs | 13 Jan 2011
Key considerations
Choose the model and way of working that fits your organisation’s strategy and objectives
• Governance and oversight- Develop basic oversight structure- Performance monitoringg- Implement appropriate governance- Project- and relationship management skills
• Invest in provider selection and contracting• Work closely with internal staff and manage expectations
| Why and how Big Pharma are using CROs | 13 Jan 2011
Thank youy
In times of profoundIn times of profound change the learnersinherit the earth while theinherit the earth while the learned find themselves beautifully equipped tobeautifully equipped to deal with a world that no longer existsg
Eric Hoffer
| Why and how Big Pharma are using CROs | 13 Jan 2011
| Why and how Big Pharma are using CROs | 13 Jan 2011
Strategic PartnershipStrategic Partnership between CRO & Sponsor
Jan HellqvistqRegional Managing Director
TFS Nordic
TFS locations & Business Areas
HelsinkiOslo
Lund (HQ)
StockholmGothenburg
Copenhagen
Lund (HQ)
You have Three Choices in Life
• Celibacy• Celibacy• Partnership• Promiscuity
Living in Celibacy or in Promiscuity
Partnership
Definition of Partnership
A t hi i• : A partnership is an arrangement where entities and/or individuals agree to cooperate to advance theircooperate to advance their interests. In the most frequent instance, a partnership is formed between one or more businesses in which partners co-labor to achieve and share profits or losses.
• : A contractual relationship between two or more personsbetween two or more persons carrying on a joint business venture with a view to profit, each incurring liability for losses and g ythe right to share in the profits
From Transactions to Integration
CRO share price performance vs S&P 500, DRG and BTK
Standard & Pore 500 (500 largest companies traded in US) BTK (US Biotech Index) DRG (US Large Pharma Index)Standard & Pore 500 (500 largest companies traded in US), BTK (US Biotech Index), DRG (US Large Pharma Index)
When the Picture Changes
2008/2009 D d Sh k Eff t• 2008/2009 Demand Shock was caused by:
– Economic Meltdown
• Effects:– Delays in decision making– Cancellation spike
– Unexpected slowdown in Pharma Sales
– Big Phara ConsolidationH lth C f
– R&D spending had a massive decline for the first time in history
– Contract awards was halted– Health Care reforms– Biotech funding window was shut
– Consolidations– Change Management
The 8 most Important determinants of Satisfaction or Dissatisfaction improves with a tighter partnership
C i ti Hi h• Communication• Attitude• Flexibility
High
• Relationship• Capability• Ability to Recover an issue
Involvement
• Specification Conformance• Time/Money
Low
Low Customization High
( B2B Relationships: Satisfiers and Dissatisfiers of American &Canandian SMES in Deep Partnerships, Stanworth, Baillargeon)
Evolving nature of B2B Service Contacts.
Business-to-business contacts are increasingly characterized as relationships that have to be responsive
and flexible.
Therefore value is represented not only in the willingness to customize the product but in the seamless integration of p g
service to create solutions
(Tuli, Kohli et al. 2007).
Who will benefit from a Partnership?
HighLarge Clinical OperationsNeed for high flexibilityPrefers adaptability to long lasting contractsNeed for speed is high
Involvement
Low
Need for speed is highBenefits from joint ventureSmall or even virtual companies
Small Clinical OperationsMedical Affairs, Regulatory Strategy inhouseP f l d l tiPrefers long and lasting employment contractsHandyman mentality
Low Customization High
Some tips on..getting the most out of your CRO partnership.
G t ” i tifi t ” i ht f th• Get ”marriage certificate” right from the start
• Let your partner understand where you are heading and whyare heading and why
• Involve your Partner • Be Honest• Trust your partner but keep an eye• Trust your partner…but keep an eye
on for deviation• Stay close • Be Quick and clear in CommunicationBe Quick and clear in Communication• Give Feedback• Every now and then you still need to
”look at the menue”look at the menue
Some predictions about the future(William Blair & Co, Business Monitor Int., Nature Reviews Drug Discovery.)
Gradual Recovery but slower R&D• Gradual Recovery but slower R&D spending is expected to persist for some time
• Drug development is expected to Good Luck
Guys!
surge in developing markets and stagnate or even decrease in developed markets
• Risk Capital has become ”Less RiskyRisk Capital has become Less Risky Capital” but there is now more interest in investments again.
• More Flexibility will be core in a changing and unpredictable worldchanging and unpredictable world
• Use of outsourcing will become deeper and broader
Summary
• A Higher degree of Partnership• A Higher degree of Partnership improves satisfaction
• The trend since late eighties is towards higher integration and risk share.Partnership is not for everybody• Partnership is not for everybody
• We will gradually move from partnerships to joint ventures
• Consolidation of CROs will not only d d G h ddepend on Geography and Capabilities but also on the ability to initiate and take part in joint ventures and integration.
• Venture Capital and Service Providers• Venture Capital and Service Providers might merge even more
• The near future is (as always) highly unpredictable
d O t i M i ht• and…Outsourcing Managers might have to updated their business cards to Joint Venture Managers
G d L k ith P t hi !Good Luck with your Partnerships!
| Why and how Big Pharma are using CROs | 13 Jan 2011
Succesful Drug Development, Malmö 13 January 2011
I t ll t l t t ti ithIntellectual property aspects on cooperation with CROs and CMOs – Important considerationsMaria Stenbäck, Partner and European Patent Attorney, Awapatent AB
© 2002
©2011
Outline of my presentationy p
• Awapatent in brief
• Brief introduction
• Important aspects for the sponsor
• Important aspects for the CRO/CMO• Important aspects for the CRO/CMO
• Important aspects for the cooperationp p p
© 2002
©2011
Awapatent in briefp
• Awapatent is one of the largest IP firms in Europe• Awapatent is one of the largest IP firms in Europe
• 13 offices in 3 European countries – head office in Malmö
F d d i 1897• Founded in 1897
• Employee-owned
• Turnover in 2009: € 51.5 million (SEK 521.5 million)
• Around 300 highly qualified members of staff, including 160 patent attorne s and attorne s at lapatent attorneys and attorneys at law
• Access to an international network of partners
• Full service in prosecution, litigation, legal advice and strategic services in all intellectual property disciplines
© 2002
©2011
Brief introduction• IP = Intellectual Property
• IP helps to make sure that your products and concepts generate long-term profits for your company
• Examples of IP:– Patent protection– Trademark protectionTrademark protection– Design protection– Copyright
G hi i di ti f– Geographic indications of source– Plant protection– Other:
• Know-how• Trade secrets• Confidential information
© 2002
©2011
Brief introduction - Patents
• National rightsg
• Term of protection: maximum 20 yearsS C– sometimes longer: PTA , PTE, SPC
• Granted in exchange for a public disclosure of an inventionGranted in exchange for a public disclosure of an invention
© 2002
©2011
Important aspects for the sponsorp p p
• Possible to file patent application before CRO/CMO is involved?– More difficult if CRO/CMO is involved at a very early stage– In what countries should the first application/further applications be
filed?• Where is CRO/CMO based?
– Have you really made the invention?– First application starts the clock…
• Normal situation when CRO/CMO is involved in a late stage:IP is owned by the sponsor
© 2002
©2011
Important aspects for the sponsor, cont.p p p ,
• If not possible to file application before contact with CRO/CMO:identify and prevent potential problems
• Agreements are vital
© 2002
©2011
Important aspects for the CRO/CMO
• Protect own development– such as platform technologies or screening methodsp g g
• Will the IP generate any profits?
• Will it be possible to prove patent infringement?
• Freedom to operate?
© 2002
©2011
Important aspects for the cooperation between sponsor and CRO/CMObetween sponsor and CRO/CMO
• AGREEMENTS
– IP agreement as part of the overall agreement– Who owns what
• IP• IP• Results
– Who may use what results and for what– Who may publish the results and whenWho may publish the results and when
– Special considerations if any party is in academia– Who shall handle IP prosecution?
M k IP t i i l d h t i d ft d– Make sure IP expert is involved when agreement is drafted
© 2002
©2011
Conclusions
• Make sure you consider all possibilities and potential problems in advance (preferably already before/at the beginning of the cooperation)
• Agreements• Agreements – These may need to be updated/renewed
© 2002
©2011
| Why and how Big Pharma are using CROs | 13 Jan 2011