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with Asia
Increasing Agility and Innovation in the Clinical Supply Chain for Cost Optimization
CTS East Coast
Oct 19th , 2011
Philadelphia
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Introduction Zuellig Pharma Asia Pacific
Privately Owned (80/20) Established over 90 years Sales 2010: US$ 6.9 billion
Asia Pacific’s leading distribution solutions provider for healthcare products
14 countries and regions in Asia Pacific 9,000 employees
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Introduction ZP Specialty Solutions Group
Wholly owned affiliate of Zuellig Pharma
Offers logistics & supply chain management solutions
HQ in Singapore since 2009
Core businesses:
Clinical Reach (IMP services suite)
• Specialty logistics for IMP and supplies
• Own depot network across 13 APAC countries
• Transport solutions (International courier and domestic)
• Comparator drug sourcing & labeling
• 1,000 clinical studies over 5 years (40% cold chain)
Pharma Bio-Logistics (regional distribution of commercial drugs)
Anti-counterfeit Solutions (combining serialization and SMS technology)
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Our Network, Your Clinical Reach
Central Depot (2)
Local Depots (12)
New Local Depots 2012 (2 planned)
Sydney
New Zealand
Mumbai
Beijing
Shanghai
Hong Kong
Kuala Lumpur
Bangkok
Taipei
Kobe
Manila
Ho Chi Minh
Singapore
Jakarta
Seoul Features a unique network of
storage Depots for IMP
covering 14 locations
Bangladesh
Sri Lanka
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Agenda
Changing environment
The role of Asia
Evaluating supply chain models
Case study on cost optimization
Innovation in the clinical supply chain
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Cost pressure in R&D and demand for higher ROI greater than ever
Trend to greater, more holistic collaboration
Pfizer Parexel / ICON
GSK Parexel / PPD
BMS Parexel / ICON
Eli Lilly Parexel (for Asia)
Eisai Quintiles
Takeda Global strategic partnership with Quintiles / Covance
Sanofi A. Covance (10 year strategic deal)
Merck PPD
Reduced number of service partners higher contract value
Shift in risk/reward sharing approach (outcome based remuneration)
The backdrop
Sponsor
CRO
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Low innovation rate in clinical trial
supply chain management
Is your service provider a potential liability for you?
What are the incentives for logistics service
providers to innovate?
Is single source and volume leverage the (only)
route to greater cost savings in clinical trial logistics?
More dominant role of procurement
The emerging challenge
Sponsor
CRO Logistics?
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The Threat: Patent cliff (top-line challenge)
Between 2010 - 2015, $142 bln sales of patented products face generic competition
(IMS)
Speed to market
The Opportunity: Increased Revenue
Closing gap between research and markets
(e.g. Asian specific diseases)
Stakeholders: Increasing regulatory requirements
Larger trials required (more patients across more countries, genetic diversity)
Internal: Rising cost of clinical trials & low R&D productivity
High cost of drug development (est. 800M – 1B USD per drug)
Unsatisfactory return on R&D investment
What drives clinical research
The role of Asia
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Better access to patients
Low clinical trial density (CT per million population)
China (0.4), India (0.7), South Korea (9.5), USA(120), Germany (51)
Faster recruitment rates
85% of clinical trials in traditional markets experience delays due to patient recruitment
Lower costs per patient (40-60% cheaper)
Asia (excluding China) is up to 60% of the cost in US/Western Europe
Population with genetic, therapeutic and demographic advantage
Hospitals increasingly experienced in conducting global multinational trials
Talented workforce (qualified investigators and site support)
Large number of drug naïve population
The Asian attraction
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Asia's growth
Growth in studies (2008-2010):
North America 55%
Europe 94%
Asia Pacific 95%
65% of FDA-regulated clinical trials will be conducted with sites outside of US by 2013 (http://csdd.tufts.edu)
Source: Clinicaltrials.gov
Source: Frost & Sullivan
0
200
400
600
800
1000
1200
2004 2005 2006 2007 2009
CRO Market Size in USD million (Asia)
0
2000
4000
6000
8000
10000
2007 2008 2009 2010
New Clinical Trials (2007 – 2010) by region
North America Europe Asia Pacific
Evaluating Supply chain models for Asia
Modifying supply chain tactics according to
clinical study dynamics
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Approaches to IMP shipment 1/3 Central Depot Model
IMP
source
US, EU
Thailand
Site 1
Site 2
Site n
Taiwan
Site 1
Site 2
Site n
Central
Depot
Disadvantage
• Highly dependent on courier service
• Highly dependent on shipper performance
• High transit risk, excursion risk
• High international shipment /packaging cost
• IMP recall, return & destruction challenging/
impossible and costly
Advantage
• Relatively low IMP needed
• Standardized external processing
• Simplicity for IMP source
• Efficient shippers to Central Depot
• Centralized kitting, labeling option
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Approaches to IMP shipment 2/3 Local Depot Model
IMP
source
US, EU
Korea
Site 1
Site 2
Site n
Local
Depot Disadvantage
• More IMP needed
• Forecast based supply (≠ recruitment)
• Higher depot fix cost, storage & mgmt cost
• Quality management/ qualification of depots
Advantage
• Local validated and efficient shippers
• Shortest lead time to site (same or next day)
• Most responsive to site orders
• Lowest cost (local transportation)
• Same time zone / language as site
• Recalls, returns, destruction is localized
• Local comparator drug sourcing option
• Local expiry date re-labeling saves IMP cost
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Approaches to IMP shipment 3/3 Hybrid Depot Model
IMP
source
US, EU
Thailand
Site 1
Site 2
Site n
Korea
Site 1
Site 2
Site n
Taiwan
Site 1
Site 2
Site n
Central
Depot
Local
Depot
Disadvantage
• Complex project mgmt
• Forecast based supply to depot
• Higher depot fix cost, storage & mgmt cost
Advantage
• Reasonable complexity for IMP source
• Most adaptable, supply strategy can change
during study
• Shortest lead time (1-3 days) to Site
• High responsive to Site orders
• Optimum cost (Inventory vs. local transport)
• Same time zone / language as site
• Suitable for adaptive trial designs and
competitive recruitment strategies
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The ultimate supply chain challenge
Have the right kit
… at the right time
… at the right site
… in the right quality
… for the right patient
agility to adapt to changing requirements (known)
and circumstances (unknown).
… while minimizing waste of
time
cost
drug/materials
To do this …
Your
supply chain
needs …
Case study
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Case Study
• Global Phase III study, 36 months
• 7,000 subjects (1,755 for Asia)
• IP (2-8°C)
• IP Kit valued at 121.00 USD
• Local sourced comparator drug
• Return and destruction of IP at project end
Project Challenges & Key Logistics Figures
Several states
7 countries
Indonesia
Malaysia
Philippines
Singapore
Taiwan
• A surprise element unknown to all parties at
time of RFQ.
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Case Study
Key Transaction Figures
• 2 inbound per year
• 12 outbound per site
• 1 return per site
No. of sites by country:
Malaysia – 5 Philippines – 20
Indonesia – 2 Taiwan – 15
Singapore – 3
Central Depot
(benchmark)
387,000 USD
Hybrid Model
(alternative)
240,000 USD
Taipei
Manila
Singapore
Thailand
Malaysia
Indonesia
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Case Study
Other Benefits
• Local comparators saved additional USD 55,000 (drug, transport & duties)
• 3 depots managed by single provider for Asia
• PH, TW: Re-usable shipping containers (no disposal at sites needed)
• Zero IP loss due to temperature excursion (no hidden cost)
• No complications with project close-out (returns & destruction)
Key Transaction Figures
• 2 inbound per year
• 12 outbound per site
• 1 return per site
No. of sites by country:
Malaysia – 5 Philippines – 20
Indonesia – 2 Taiwan – 15
Singapore – 3
Central Depot
(benchmark)
387,000 USD
Hybrid Model
(alternative)
240,000 USD
Courier -146,000
Additional IP (20%) + 42,000
Packaging Box - 36,000
Project Mgmt + 19,000
Return/destruct. - 12,000
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The Project Manager’s Office
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May 6th, 2011 The surprise element arrives …
약사법 시행규칙 75조(의약품의 표시 및 기재사항)
⑥ 법 제56조 각 호 외의 부분 단서에 따라 임상시험용의약품의 용기나 포장에는 다음 각
호의 사항을 기재하여야 한다. 다만, 법 제31조제2항 및 제3항 또는 법 제42조제1항에 따른
허가를 받지 아니하거나 신고를 하지 아니한 사항은 기재하지 아니한다.
•"임상시험용"이라는 표시
•제품의 코드명 또는 주성분의 일반명
•제조번호 및 사용(유효)기한 또는 재검사일자
•저장방법
•임상시험계획 승인을 받은 자의 상호와 주소
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… Translation
Announcement of regulatory change issued on 6. May 2011
According to the revised Pharmaceutical Affair Law 56, IND holder’s name and
address has to be included on each pack of IMP.
(Effective date: 6. May 2011 )
• Investigation medicinal products
• Product code of general name of API
• Batch no and expiry date or retest date
• How to store / storage condition
• IND holder’s name and address
IND (investigational new drug)
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... Effect
“I don’t like to hear
about problems, I
want solutions!”
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... The solution
16 customers using that depot
… representing 35 sponsors
… affecting 200 studies
… requiring 85,000 kits at the depot to be re-labeled
5 months later …
Still, most incoming shipments are received non-compliant. IP either already
manufactured or it is easier to apply label in Korea than change the label at source.
Key conclusion:
Working with the right vendor is the key to being able to respond to unexpected
local challenges and to have flexibility.
How we solved the problem:
we printed label locally
we provided a local GMP compliant labeling service
we ensured there were no disruptions to IP supplies to sites
… all for a bargain of just USD 0.65/IP kit.
Innovation in the clinical supply chain
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Versatile supply chain models as driver of cost avoidance
Biological specimen collection process (consolidation & packaging)
Tax & duty recovery for IP that has been destroyed
Simplified fee structure
Eye on innovation
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Asia’s role is increasing and Asian countries are becoming more
frequently part of US FDA controlled clinical trials.
To harness greater cost saving opportunities, supply chain
models and execution will need to become more sophisticated.
Assess with an open mind the viability of new emerging
solutions alternatives and scrutinize current alliances to ensure
continued value creation through innovation.
Summary
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Thank you!