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