Pharmaceutical Resource Planning & Management

The Evolving Role of Project Management in Drug Development Eric M. Towler, PhD, PMP Associate Project Director Merck and Co., Inc.

Productivity Productivity – the ratio of input to output Inputs – Scope – Cost Scope Time – Time Cost Outputs – Launches

Global pharmaceutical R&D expenditure 1996–2009p 80 Some sources estimate as much as $150bn by 2010 70.6 66.6 70 62.9 Global R&D expenditure (US$ bn). 59.3 60 55.9 53.1 50.3 47.8 50 44.5 41.8 40.2 38.9 36.8 40 35.3 30 20 10 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006p 2007p 2008p 2009p Year P - Projected figures have been calculated based on an average annual growth in R&D expenditure between 2000 and 2005.

Mean pipeline size as of 31st December per year 2001-2005 All companies Major companies Mid companies Other companies 65 65 65 65 60 60 60 60 55 55 55 55 50 50 50 50 45 45 45 45 40 40 40 40 35 35 35 35 30 30 30 30 25 25 25 25 20 20 20 20 15 15 15 15 10 10 10 10 5 5 5 5 0 0 0 0 01 02 03 04 05 01 02 03 04 05 01 02 03 04 05 01 02 03 04 05 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 The data presented in this graph are based on data provided for all years by 25 companies (12 Major, 5 Mid and 8 Other companies). Data provided are based on active substances between the „First toxicity dose‟ milestone and the „First approval‟ milestone Major companies are defined as those spending ≥ US$ 1.8 billion in 2005 on ethical pharmaceutical R&D Mid companies are defined as those spending ≥ US$ 0.6 billion and < US$ 1.8 billion in 2005 on ethical pharmaceutical R&D Other Companies are defined as those spending < US$ 0.6 billion in 2005 on ethical pharmaceutical R&D

Development time for medicines first launched onto the world market 1998-2005 All Companies Major Companies 18 Development time (3 year moving average/ years) . 16 14 12 10 8 6 4 1998 1999 2000 2001 2002 2003 2004 2005* Year of first launch * The development time data point for 2005 includes data from 2004 and 2005 only Major companies are defined as those spending ≥US$ 1.8 billion in 2005 on ethical pharmaceutical R&D.

Number of new molecular entities and new active substances first launched onto the world market 1996-2005 Number of NMEs first launched onto the world market Number of NASs first launched onto the World Market 50 45 40 Number of NMEs/ NASs 35 30 25 20 15 10 5 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year of first launch

The Triple Constraint of Managing Projects Scope Time Risk Cost

Session Description • The purpose of this session will be to review different approaches taken by major pharmaceutical companies to streamline drug development processes and increase business acumen and the impact on project management responsibilities

Learning Objectives • Recognize the productivity issues facing drug development • Contrast the varying industry approaches to increase productivity • Adapt industry approaches to productivity for individual use 9

Presentation & Speaker Learning while Managing Scope in a Learn-and-Confirm Approach to Drug Development Mark A. Lane, PhD, MS Director, Project Management Wyeth Research United States Improving Productivity through Timeline Practices Thomas C Lange, BSIE Project Management Consultant Eli Lilly and Company United States Improving Productivity through Project Accounting Todd Tullis Manager Accenture United States

Improving Productivity Through Resource Planning & Management Todd Tullis Pharmaceutical R&D Consultant

Productivity and Resources Productivity – the ratio of input to output Inputs – People – Project-based cost items Scope Time – Overhead cost items – Facilities/other resources Cost/Resources Outputs – Major lifecycle milestones – e.g., First in Man, Launch

Dimensions of Resource Planning & Mgmt Strategic Project level costs, resources, planned Resource & actual amounts Portfolio Management Cross < 18 months functional Information “Project“ Depth Planning ..... Clinical Pharmacology Formulation Study level costs, Horizon Project resources, planned & actual amounts ..... Study 1 Study 2 Country level Operational costs, resources, Resource planned & actual Management amounts Country 1 Country 2 < 18 months Breadth

Information Many resource types; Limited resource types; plans and actuals plans or actuals only Do you need plan data, actual data, or both? • Selecting resource types and project team control • Including non-project labor and cost expenses • Risks and rewards of “dollarizing” labor 14

Breadth Selective R&D All R&D Enterprise What drives you to widen the net? • Moving beyond the “classic R&D” definition • Challenges of including Discovery • Addressing geographic differences 16

Depth Portfolio Study Person Do you have strategic or operational management objectives (or both)? • Diminishing returns of detail • Minimum level of consistency across breadth areas • Business model considerations 18

What do productivity improvements look like?  Resources are reallocated away from low- priority work  Informed portfolio decisions are made, including:  Program timing  Program scope  Licensing opportunities  Areas for cycle time improvements are identified and measured  Fewer „late‟ sourcing decisions 19

How do we improve productivity?  Leveraging of Scope Management techniques (e.g. Learn and Confirm) to increase POS of late stage successes  Leveraging of Project Management Timeline Scope Time Management Practices (e.g. Critical Chain) to Optimize Team Performance  Leveraging of Resource Cost/Resources Management techniques to ensure the right resources are applied to the right tasks at the right time 20

Pharmaceutical Resource Planning & Management

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