Howtobuildwin-winrelationshipswithCROs?

ShreekantKarmarkar,Ph.D.May22,2019

Topics

�  Transactionalvs.StrategicCROrelationship◦  DrivingtransactionalCROrelationshiptosuccess

�  Win:WinstrategicCROrelationship◦  DuediligenceinCROselection◦  Qualitymanagement:FDAandICHguidances◦  Clarityleadstosuccess,ambiguitytofailure◦  Buildthetrust,andnotusvs.them◦  Empowerment◦  Simplifyingthecomplex◦  Relevantmetrics◦  Operationalexcellence

�  Summary�  Q&A

Background,firstsomeacronyms

•  CRO•  Contractresearchorganization•  Clinicalresearchoutsourcing

•  CMO:Contractmanufacturingorganization•  CDMO:Contractdevelopmentandmanufacturingorganization•  CTO:ContracttestingorganizationThetermCRO,usedinthispresentation,ismeantforcontractresearchorganizationinmind.However,Ithinktheconceptsleadingto“win:winrelationship”wouldapplytoalloutsourcedcontractworkwithlong-termstrategiesinmind.

Background

•  PharmaceuticalandbiopharmaceuticalcompaniesextensivelyuseCROstomeettheirchallengingneedsinresearchanddevelopment,manufacturingandstability.•  Forexample,Approximately33%ofdrugsinthepipelinesofthetop

tenpharmaceuticalcompanieswereinitiallydevelopedelsewhere,accordingtoa2014WSJarticlebyJonathanD.Rockoff.

•  BothsmallandlargepharmacompaniesextensivelyuseCROs.•  ThesponsorcompanyneedstodecidewhethertoengageaCROon

atransactionalbasisorastrategicrelationshipbasis.•  Stakesarehighforpharmaceuticalandbiopharmaceutical

companiestomakesureCROworkissuccessful.•  AsuccessfulCROrelationship,evenwithareputedCRO,isnota

given.SponsorcompanyandCROcandrivetoasuccessfulrelationshipbyimplementingthekeystrategiesdiscussedhere.

References

�  JonathanHughesandStuartPrice,ThePerilsandPromiseofStrategicPartneringwithCROs,PharmaceuticalOutsourcing,March2016.

�  AnthonyMire-Sluis,JuliaEdwards,JeffreyStaecker,QiaoBobo,PatriciaHughes,StephenLiewbowitz,ShawnNovick,SiddharthJ.AdvantandBernardHuygheEffectiveManagementofContractOrganizations:KeepingtheProductPipelineMoving,Compliant,andAvailable,BioProcessInternational,October2015.

�  Syngene’swhitepaper,2018https://pink.pharmaintelligence.informa.com/emails/weekly-partnered-content?utm_campaign=Pink%20Sheet&utm_source=emdigest&utm_medium=email

�  FDAguidancedocument,Contractmanufacturingarrangementsfordrugs:Qualityagreements,November2016

�  Section2.7,Managementofoutsourcedactivitiesandpurchasedmaterials,ICHQ10,Pharmaceuticalqualitysystem,2008

Transactionalvs.Strategic

Transactional•  Shortdurationprojects•  Commitmentbyboththe

clientandtheCROonlyfortheSOWproject

•  CROaswellasclientwouldshyawayfromanybiginvestment,continuousimprovementorinnovation

•  Atarms-length.Simplyanaugmentationofresources

•  Examples:Verificationstudy,Validationstudy,Synthesis

Strategic•  Longdurationprojects•  Long-termcommitments

byboththeclientandtheCRO

•  CROaswellasclientwouldwanttomakebiginvestment,continuousimprovementandinnovation

•  Ideallybasedonmutualrespectandtrust

•  Examples:Stabilitystudies,Referencestandards,Clinicalstudies

MetricsfortransactionalCROs

AretherewaystomaximizetheoutcomefromtransactionalCROs?�  Asimpleansweris“Yes”!�  Forexample,considerimplementingthefollowingmetrics:◦  On-timecompletioninpercentage.AquantitativeKPI

◦  Qualityofwork:Itcanbemeasuredintermsofiterationsforreviewofprotocol,report,oranyinvestigations.Theoutcomecanbemeasuredintermsofiterations:

◦  Valuesof5:minimumiterations(e.g.,2-3),Valueof3:medium(3-5),andValueof1:major(greaterthan5iterations).

�  Overthecourseofyearortwo,thenumbersdoaddup.ThemetricsthenbecomesapowerfultoolinevaluatingCROperformance.

0

25

50

75

100

0 2 4 6

On-tim

ecompletion

Quality

PerformanceassessmentofCROs

Starperformers!

Eitherdropthemornegotiatelowerrateuntilperformanceimproves!

CreatebubbleplotwithbubblesizeproportionaltoannualspendwiththeCROforimpactassessment

StrategicrelationshipswithCROs

StrategicrelationshipwithCROs

Strategicrelationship◦  WhensponsorandCROactivelyworktogethertohelpeachother

achievetheirrespectiveobjectives.

Afewthingstoconsider◦  UnderstandingofdifferentbusinessmodelsforsponsorsandCROis

importantindevelopingmutuallybeneficialrelationship.◦  Knowingthattherelationshipsarenotmonogamoushasimportancein

afewaspects,e.g.,firewall&applyingbestdemonstratedpractices.◦  Itismoreofstrategicrelationship,butitmaynotgotothelevelof

partnership.

Benefitsofstrategicrelationship

�  Improvedoperationalefficiency◦  Accesstoinfrastructurewithouthavingtomakecapitalinvestment◦  Resourceflexibility:Rampingupanddown

�  Continuousimprovement,innovation,andlearningwithandfromCROs

�  In-houseresourcescanbeleveragedtobusinesscriticalprojectneeds

�  PossibleopportunitiestopenetrateintoanewmarketsegmentwhentheCROisfromalocationwherethesponsorcompanylacksanypresence.

Examplesofstrategicrelationships

�  SyngeneInternational,Bangalore,India◦  Amgen◦  BaxterHealthcare◦  Bristol-MyersSquibb◦  GSK◦  Herbalife◦  Novartis

�  Parexel◦  EliLilly

Formingastrategicrelationship

Define

• Definewhatworkstaysin-houseandwhatisoutsourced• Definekeydrivers;speed,cost,workcomplexity

Duediligence

• Technicalassessments• Supplierqualityaudits

MSAandQA

• Masterserviceagreement(MSA)&Qualityagreement(QA)withtheselectedCRO(s)• Addresstechnical,business,andqualityaspects

Cadences

• Workinitiation,includingtransferwork• Establishingengagementandgovernancecadences

Followthrough

• Qualityaudits• MSAandQArenewals

WhatareFDAguidelinesonqualityagreement?

FDA’sguidance,“Contractmanufacturingarrangementsfordrugs:Qualityagreements”

•  Guidancedocument,November2016•  FDA’sregulationsrecognizethatownerscommonlyusecontractfacilitiestoperform

somedrugmanufacturingactivities.•  AlthoughtheguidanceisforCMO,manyoftheprinciplesdescribedinthisguidance

couldbeappliedinpre-commercialstagesofthepharmaceuticallifecycle.

•  Whenanownerusesacontractfacility,theowner’squalityunitislegallyresponsibleforapprovingorrejectingdrugproductsmanufacturedbythecontractfacility,includingforfinalrelease.Theregulationsrequirethatthequalityunit’sresponsibilitiesandproceduresbeinwritingandthattheybefollowed.

•  OwnerscanuseacomprehensivequalitysystemmodeltohelpensurecompliancewithcGMP.Acomprehensivequalitysystemscallsforqualityagreementsbetweenownersandcontractfacilities.

•  OwnerstoevaluatecontractfacilitiestoensurecGMPcomplianceforspecificoperations.

FDAandthequalityagreement•  Qualityagreement:

•  Qualityagreementsshouldclearlydescribethematerialsorservicestobeprovided,qualityspecifications,andcommunicationmechanismsbetweentheownerandcontractfacility.

•  ShouldexplainhowtheCROwillreportmanufacturingdeviations,deviationswillbeinvestigated,documented,&resolvedincompliancewithcGMP.

•  Definesandestablisheseachparty’smanufacturingactivitiesintermsofhoweachwillcomplywithcGMP.

•  FDArecommendsthatqualityagreementsbeseparatedocuments,oratleastseverable,fromcommercialcontractssuchasmasterservicesagreementsorsupplyagreements.Qualityagreementsmaybereviewedduringinspections.

•  Twocriticalpieces:•  Manufacturingactivities(Qualityunit,Facilitiesandequipment,Materials

management,Productspecificconsiderations,Laboratorycontrols,anddocumentation)

•  Changecontrols

Thebuckstopswiththesponsor

•  Nomatterwhoteststheproducts,theowners’qualityunitsareultimatelyresponsibleforensuringthattheproductsaremanufacturedinaccordancewithcGMP.Aqualityagreementdoesnotchangethat.FDAcouldcitetheownersforfailingtoevaluate,qualify,audit,andmonitortheircontractfacilities.

•  ICHguidanceforindustryQ10PharmaceuticalQualitySystemstatesthat,aspartofapharmaceuticalqualitysystem,theownerisultimatelyresponsibleforensuringthat“processesareinplacetoassurethecontrolofoutsourcedactivitiesandqualityofpurchasedmaterials.”

Howtheendgamemaylooklike?

SponsorWinSponsorLoseCRO

Win

CROLose

•  Sponsor:TimelyandQualityoutput,costsavings,resourcemgmt.

•  CRO:Growthinrevenueandprofits,capabilitiesfornewbusiness

•  Sponsor:Short-termwin.•  CRO:Unsustainable

partnership

•  Sponsor:andCROwanttoendtherelationship

•  Sponsor:workoutputeitherlate,notofquality,overbudgetandresourcedrain

•  CRO:Revenueandprofitgrowth,andcapabilitiesfornewbusiness

Keystrategiesforwin:winrelationship

Win:WinStrategies

Continuousimprovement

CROselection

Qualitymanagement

Clarityinexpectations

Buildthetrust

Empowerment

Simplifyingthecomplex

Metrics

Solidfoundation

Softfactors

ProjectManagementExcellence

Roadtowin:winrelationship

CROselection•  Defineoutsourcedwork•  Qualitytrackrecord•  IPandconfidentiality•  Capabilities:depthandbreadth•  Resourcepoolinthelocalarea•  Financials•  Managementteam

Qualitymanagement•  Qualityagreement•  Qualitysystemalignment•  Qualitytraining•  Rolesandresponsibilitiesfor

investigations,OOS,FAR•  Frequencyinreviewoforiginaldata•  Qualitymetrics

Buildthetrust•  Meetingcadencesandtransparency:

Senior,midandoperationallevel•  Feedbacksessions(CROto/from

Sponsor)andactingonthem•  Accountabilityonbothsides•  Openbook,e.g.,FilesonSharepoint

Clarityleadstosuccess•  Clarityisamusttoovercometime,

distance,&culturaldifferences•  SOWisthevehicle•  Frequentteleconferences•  Useoftemplates•  Lessonslearnedsessions

Roadtowin:winrelationship

Empowerment•  ConsiderCROasanextension:Coaching

andmentoring•  Culturaltraining•  Trainingandeffectivenesscheck•  SMEvisit•  ShowCROthebigpicture

Simplifyingthecomplex•  Feasibilitystudiespriortoformalones•  Identifyfailuremodes•  Templatesforprotocolsandreports•  Audio-visuals,e.g.,telepresence,skype•  Earlysuccessenablers•  Issueescalationcadence

Relevantmetrics•  Identifyrelevantmetricstoevaluate

strategicandtacticallevelstatus•  Review&course-correctmetricsasthe

collaborationmatures:Establishment;efficiency,&productivity

Continuousimprovement•  Don’tsitonyourlaurels•  IdentifyKPIstomonitorstatus•  UseGreenBelttooltominimize

defectsandLEANtoeliminatewaste•  Explorevisualtools

It is a journey and not a destination!

ExamplesofrelevantKPIs

KPI Frequency Purpose

On-timeSOWcompletion,% Quarterly

MeasuresofefficiencyFirsttimeright,% Monthly

Labexecutionerrors,% Quarterly

Logistics,e.g.,shipment,receiptofchemicals Monthly Measureofefficiency

Productivity,studyoutput/FTE/year AnnualMeasuresofproductivity

Productivity,tasks/FTE/yearQuarterly

Regrettablelosses Measureofworkenvironment

“ Not everything that counts can be counted, and not everything that can be counted counts” – Albert Einstein

Illustrativescenarios

Scenario Discussion

CROneedstosubcontractpartofservice

•  CROneedstoauditthesubcontractedCROtoensurecGMPcompliance.

•  WorkaccountabilityisstillwiththeCRO

Inaccuratedocumentationofmanufacturingsteps

•  Contractfacility’sbatchrecordsdidnotaccuratelyreflecttheactualmanufacturingprocessbecausethebatchrecordsdidnotdocumenttheadditionofreclaimedpowder.Batchrecordswassponsorresponsibilityperthequalityagreement.

•  AqualityagreementcannotexemptownersorcontractfacilitiesfromstatutoryorregulatoryresponsibilitiestocomplywithapplicablecGMP.TheCROviolatedcGMPbyusingabatchrecordthatdoesnotaccuratelyreflectthemanufacturingprocess,eventhoughthebatchrecordwasconsistentwithwhatwassetoutinthequalityagreement

Illustrativescenarios

Scenario Discussion

Parentcompanyreceives483sorwarningletter

•  AlthoughtheparentcompanyandCROhaveseparatequalitysystemsandthereisafirewallbetweenthetwoentities,thequalityculturecanessentiallybethesame.TheCROshouldsharewhatwouldbethenecessarychangestheyneedtoimplementbasedontheparentcompany’sauditfindingswiththesponsor.

Leastsuccessfulvs.mostsuccessfulstrategicrelationship

Leastsuccessful•  Bothsideshaveunclearandunrealistic

expectationsofoneanother•  Amindsetof“Youworkforus/weworkfor

you”prevails•  CROshavelimitedvisibilityintoSponsor

developmentplansandtimelines•  Lackofclarityandalignmentaround

policiesandprocedures;lackofclearlydefinedanddifferentiatedrolesandresponsibilities

•  WorkiseithermicromanagedbySponsorsor“thrownoverthefence”toCROs

•  Problemsareoftennotaddresseduntiltheymetastasize,finger-pointinganddefensivenessarecommon

•  Lackofcontinuousimprovement

Mostsuccessful•  Differencesarejointlymanaged•  Amindsetof“Wearecolleagues”prevails•  Sponsorsprovideahighdegreeof

transparencytoCROsregardingdevelopmentpipelineandplans,enablingmoreefficientresourcedeploymentandmanagementbyCROs

•  Processes,policies,andproceduresareclearlydefinedandwell-integrated.

•  Rolesandresponsibilitiesforexecutionandoversightareclearlydistinguished

•  Potentialproblemsarespottedandaddressedearly;bothsidesexplorerootcausesanddeveloppotentialsolutionstogether

•  ContinuousimprovementwithGB,LEAN

Summary

•  StrategicCROrelationshipcanindeeddeliversubstantialbenefits.•  However,asuccessfulCROrelationship,evenwithareputedCRO,isnota

given.•  ImplementationofkeystrategiesinCROselection,qualitymanagement,

buildingtrust,drivingclarityandempowerment,simplifyingcomplex,relevantmetrics,andcontinuousimprovementcanleadtheCROcollaborationtosuccess!

•  HowcanIhelpyouinstartingthestrategiccollaborationtherightwayorturningaroundanineffectivecollaboration?

•  Reachouttomeatskarmarkar2018@gmail.comorat224-383-4493

Acknowledgments

�  NumerousBaxtercolleaguesandmanagers�  Syngeneemployeesandmanagement�  EdMoore,RichJohnson,JeffStacker,andBioPhiacolleagues�  MATTER

Thankyouforyourtime!