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  • 1. Strategic Partnerships with Service Providers Bonnie Mangold Vice President, Head of Strategic Sourcing November 2009 Novartis Pharmaceuticals Corporation
  • 2. Agenda Introduction Strategic Sourcing Introduction Strategic Sourcing Why to bring in new capabilities and strategic opportunities? Why to bring in new capabilities and strategic opportunities? New model of partnerships New model of partnerships Active Benchmarking - what you measure is what you get Active Benchmarking - what you measure is what you get 2 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 3. Integrated Development Sourcing Strategy Capacity Reactive Strategic From Driven Outsourcing Sourcing Alignment of core/non-core activities Strategic involvement in demand planning Implementing an outcomes-based approach with strategic partnerships Innovative sourcing models Maximum cross-Novartis spend transparency & volume leverage 3 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 4. Benefits Strategic Sourcing Expected benefit: Competitive advantage Executive time/focus on the core activities Executive time/focus on the core activities Access to innovation and expertise Access to innovation and expertise Shorten development times, and accelerate patient recruitment Shorten development times, and accelerate patient recruitment Reduced costs, faster decision making Reduced costs, faster decision making Access to additional capital to fund more projects Access to additional capital to fund more projects 4 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 5. What are the reasons to change now? 5 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 6. Changing Face of Pharma Focusing on biologics and high-potency Oncology Re-establish position in generics (biosimilars) Big Pharma Targeting emerging markets Acquisitions/mergers Emergence of Japanese, Indian, Chinese companies expanding globally New Players Early development pipeline nearly doubled from 1998 to 2008 Smaller However, major pharma making radical cuts in portfolios to improve R&D Development efficiency Pipeline Increasing trial costs and complexity Critical element of every biopharm and pharmaceutical company More Handing off functions previously considered core competencies including Outsourcing toxicology, clinical data management, manufacturing Trend to favor CROs with greatest capabilities and financial strength Source: PharmTech.com April 8, 2009 6 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 7. CRO Evolution: The world is changing 2006-Today 2000/2005 Partnership models emerge with big pharma 1980/90s Biotech/specialty pharma Big pharma moves use CRO’s strategically towards strategic outsourcing Tactical outsourcing by big Well-funded biotechs pharma lacking internal Growth rate for CRO capabilities rely on CROs industry increases CROs are spill-over capacity, used tactically CRO demand stabilizes, Recent large deals: Volatility in CRO growth rates performance improves, and profitability investments add scale Source: Covance; Literature searches 7 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 8. Agenda Introduction Strategic Sourcing Introduction Strategic Sourcing Why to bring in new capabilities and strategic opportunities? Why to bring in new capabilities and strategic opportunities? New model of partnerships New model of partnerships Active Benchmarking - what you measure is what you get Active Benchmarking - what you measure is what you get 8 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 9. Why to bring in new capabilities and strategic opportunities? “Active Benchmarking” “Active Benchmarking” to bring in new capabilities, improvement and strategic opportunities through expanded partnership with CROs Provide alternative resources and approaches to drug development Provide alternative resources and approaches to drug development Define process and roles & responsibilities for extended CRO Define process and roles & responsibilities for extended CRO partnership on program level rather common trial operational level partnership on program level rather common trial operational level Benefits Provide external development expertise to Novartis Provide external development expertise to Novartis (i.e. integrated model-based approach, real-time data analysis, (i.e. integrated model-based approach, real-time data analysis, faster decision making with less patients) faster decision making with less patients) Provide alternative solution to manage portfolio risk, i.e. CROs to Provide alternative solution to manage portfolio risk, i.e. CROs to provide at-risk capital or services (risk-sharing model) provide at-risk capital or services (risk-sharing model) 9 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 10. Agenda Introduction Strategic Sourcing Introduction Strategic Sourcing Why to bring in new capabilities and strategic opportunities? Why to bring in new capabilities and strategic opportunities? New model of partnerships New model of partnerships Active Benchmarking - what you measure is what you get Active Benchmarking - what you measure is what you get 10 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 11. Strategic approach via Active Benchmarking Program Team CRO Program Team Sponsor External team integrated into Company line functions Program Teams via Sourcing generate learning about relationship insufficient internal processes Involved in strategic Results in reviewing own development activities rather productivity and adapt as than trial operations only New model needed of CRO Providing scientific Gain scientific learning from opportunities and expertise partnership external partner Uses a model-based Gain understanding about approach including real-time integrated program team data analysis sourcing model 11 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 12. Develop key principles of partnership… Communication driven Establishing mutual trust Monthly Progress Report of through single-point of and partnership performance metrics contacts (fully integrate CRO team (agreed upon the project (fewest touch-points as members to the project start) possible) team) Clearly define sponsor and Quarterly Review Meetings Gain stakeholder support to CRO roles and (F2F) with Program Team overcome internal barriers responsibilities and Clinical Team 12 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 13. Develop key principles of partnership…(cont.) Face-to-Face Kick-off Meeting essential An understanding that not Willingness to allow (define objectives, roles & all partnership processes empowerment to the responsibilities across will be defined upfront strategic partner departments and both organizations) Keep it simple and remain Overcoming well- Establish infrastructure at focused on key program established cultures to the beginning of a project questions allow innovative (incl. legal, contracting and (do not address too many approaches quality assurance) questions at once) 13 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 14. Extended responsibilities included… Design and finalization of assigned trial protocols (one compound), including Design and finalization of assigned trial protocols (one compound), including data analysis and clinical study report data analysis and clinical study report Clinical lead of the studies, including medical and statistical consultancy Clinical lead of the studies, including medical and statistical consultancy Utilizing integrated, model-based development strategies focused on key Utilizing integrated, model-based development strategies focused on key decision points decision points Overall Program Lead (incl. regulatory, drug supply management, trial Overall Program Lead (incl. regulatory, drug supply management, trial operations, contract management etc.) operations, contract management etc.) Budget Management and support of invoice handling and negotiations with Budget Management and support of invoice handling and negotiations with other service providers other service providers Provide aacompletely transparent status of study progress through aasecure Provide completely transparent status of study progress through secure web portal web portal 14 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 15. Were there any bottlenecks? Novartis remained the lead for key regulatory, drug supply release and financial responsibilities due to New internal processes need to be developed to established internal processes integrate external partner successfully Difficulty to overcome internal barriers Benefits of change in complex to give-up “core” activities & to deviate organization not always immediately from established processes. understood Open communication essential to overcome bottlenecks 15 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 16. Feedback – Measurement of success Monthly Traffic Light Reports on agreed metrics CRO Feedback to Novartis Novartis Survey Feedback to CRO 16 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 17. Established Governance Model Monthly Program Meeting Updates with metrics in place Quarterly Review Meetings with CRO and Novartis Quarterly Surveys to assess overall collaboration 17 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 18. Clinical metrics: key milestones for reporting and relevant performance benchmarks monitored Milestones/ Description / Details Performance benchmarks measurements Time from assignment of CTH to FP Final protocol signed (plan vs. actual) FP FPFV First patient first visit (plan vs. actual) Time from FPFV to LPFV LPFV Study milestonesvisit (plan vs. actual) Last patient first and progress reported on a(recruitment time) Monthly LPLV Basis topatient last visit (plan vs. actual) Last core Novartis Lead None FIR Close collaboration between CRO Ops Lead None First interpretable results & LDG Novartis Dirgenerated (Program and Sourcing) Time from LDG to DBL Last data of Ops DBL Database locked (plan vs. actual) CRO joins Global Program Team meetings on monthly to CSR Time from DBL CSR Clinical study report available (plan vs. actual) basis for project update and scientific input to Expected cost (FTEs and external cost); total developmentpatient Budget & Cost and per Cost per patient (?) Actual vs. expected cost Number of patients Other Number of sites None (?) Total study duration 18 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 19. Actual versus Planned Milestones Time Actual Milestone versus Planned 30 20 10 0 Working Days -10 -20 -30 -40 FP FPFV – LPLV – FPFV – LPFV – LP LPLV – Cohort A Cohort A Cohort B-1 Cohort B-1 Randomized Cohort B-1 Milestones 19 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 20. CRO Feedback – areas that worked well Sponsor educated CRO partner to learn internal processes quickly Project standards were kept (CRF’s, vendors) ensuring integration into program CRO Feedback Willingness and openness to integrate CRO partner into NVS Program Team Investigator contracts: Inclusion of CRO into the approval process CRO successfully managed vendor negotiations and contract execution Open to working with new vendors at the CRO’s recommendation Coordinated QA audits of new vendors Leveraging expertise and relationships with KOLs Safety reporting – process integrated with CRO 20 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 21. Survey Results 2009 66% satisfied/very satisfied in Q3 compared to 37% in Q1 Survey: 30% increase in overall satisfaction within 4 months Overall Satisfaction Rate Overall Satisfied 0% 20% 40% 60% 80% 100% Survey Q1 2009 Survey Q3 2009 Response rate ~70% 21 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 22. Survey Results 2009 92% agreed that the Active Benchmarking 67% (21% increase from Q1) agreed that Project provided useful insights/lessons that Active Benchmarking Project provided may apply to future collaborations with effective external resources to the Novartis external resources Development Team 42% increase in “strongly agree” Dissatisfaction rate decreased over time 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% Strongly Agree Neither Disagree Strongly Strongly Agree Neither Disagree Strongly Agree Disagree Agree Disagree Survey Q3 2009 Survey Q1 2009 Survey Q3 2009 Survey Q1 2009 22 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 23. Outlook: Main Questions to be answered Costs: How efficient was resource utilization? Speed: What was the speed to decision point? Quality: Did the data produced enable confident and informed decision-making? Concept: What were risks of the specific approach? What did we learn that could be brought into our organization? 23 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 24. Agenda Introduction Strategic Sourcing Introduction Strategic Sourcing Why to bring in new capabilities and strategic opportunities? Why to bring in new capabilities and strategic opportunities? New model of partnerships New model of partnerships Active Benchmarking - what you measure is what you get Active Benchmarking - what you measure is what you get 24 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 25. Why Use Metrics? Increase focus in a complex environment Focus on what needs to be done to reach goals Move down the “learning curve” Work smarter, not faster Reduce “ineffective” work Source: David Zuckerman (2006), “Pharmaceutical Metrics” from Gower Press 25 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 26. Three Principles of Metrics 1 2 3 Metrics measure Metrics help us Metrics get us out progress toward prevent failure of ruts/routine our goals Source: David Zuckerman (2006), “Pharmaceutical Metrics” from Gower Press 26 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 27. Metrics need to be defined and agreed upon… Metrics for outsourcing To provide information for evaluating our project success, ultimately driving decision making for future collaboration with CRO Allow for consistent measurement and comparison of internal vs. external/ outsourcing option 27 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 28. Summary – Productivity improvement needed Constructive Change needed to make clinical trials affordable Pilot innovative collaborations with less complexity Reduce Bureaucracy and number of contracts Implement sensible benchmarking Increase mutual trust with external partners Communicate success broadly to gain wide stakeholder support Adapt risk-shared approaches 28 | 8th Annual Partnerships in Clinical Trial Conference | Rotterdam Nov 4-6 2009 | Strategic Sourcing | Bonnie Mangold, Novartis Pharmaceuticals | Business Use Only
  • 29. Thank you