2nd Annual State of ClinicalDevelopment Cost Conference Clinical R&D: Challenges & Opportunities Amarnath Sharma MPharm PhD Sharma, MPharm, Vice President, Clinical Research & Precision Medicine Worldwide Development Operations January 10, 2012 This document provides an outline of a presentation and is incomplete without the accompanying oral commentary and discussion. Conclusions and/ or potential strategies contained herein are NOT necessarily endorsed by Pfizer management. Any implied strategy herein would be subject to management, regulatory and legal review and approval before implementation.
Outline Challenges Low R&D Productivity Loss of product exclusivity Opportunities Build strategic partnership Globalization of clinical trials Transformation of Dev Ops at Pfizer Key elements of the new model For External Presentation Purposes; Not for Distribution. 1
Current R&D Model is Not Sustainable Low R&D Productivity & Increasing Costs What will the future be? R & D Costs to Bring a NME to Market $1,500 $1,200 Cost ($ Million) $900 $600 $300 $0 1970 1980 1990 2000 2010 For External Presentation Purposes; Not for Distribution. 2
Individual R&D Productivity: A Snapshot Successful Launches vs. R&D Spend 5Successful NMEs launched 4 02-2008 3 s between 200 2 1 Each dot represents a biopharma company 0 0 10 20 30 40 50 R&D spend in $B 1998-2004 Note: "Successful" NMEs are those that achieve >$600M/yr WW peak sales Source: EvaluatePharma, BCG analysis For External Presentation Purposes; Not for Distribution. 3
Potential Loss of Significant Revenue Loss of Exclusivity for Major Products & Patent Erosion For External Presentation Purposes; Not for Distribution. 4
Multiple Reasons For Low R&DProductivity Compound and / or target related issues Inadequate therapeutic index The drug target is not well understood The target is valid only in sub-group of patients Clinical trial design issues Efficacy observed in the early clinical trials (phase II) have been relatively poor predictors of phase III success Appropriate patient population is not well defined Clinical trial operations issues Cost Quality Speed Qualified investigators and sites For External Presentation Purposes; Not for Distribution. 5
Current Industry Trends• More outsourcing to reduce fixed development costs• Increased globalization of clinical trials Continued advancement in execute studies with quality and cost-effectiveness in emerging markets and around the world• Intensified regulatory focus on GCP compliance & quality “Quality by Design” in every step of the clinical trial process, from study concept, through protocol development, execution, and reporting• Amplified clinical trial complexity & “Precision Medicine” approach Increased complexity of clinical trial design, partnerships and reliance on third parties for trial conduct is likely to result in an increasing shift for sponsors to prove the integrity of their clinical trial data Need to prospectively identify patient cohorts of potential “responders” will require the use of biomarkers and alternate trial designs For External Presentation Purposes; Not for Distribution.
What is Driving the Globalization ofClinical Trials? Cost • The cost of clinical trials continues to increase by more than 20% per year in developed markets • Conducting trials in developing countries can reduce costs by > 50% Speed • Patient recruitment in developing markets can more than 100% faster compared to the U.S. and Western Europe Availability of large, treatment naïve patient populations Potential new biopharmaceutical markets for growth For External Presentation Purposes; Not for Distribution. 7
Increased Globalization of Clinical TrialsA Shift to the East R&D centers are looking for opportunities in the emerging markets. Sources: http://www.clinicaltrials.gov/ct2/search/map, date accessed: 16 January 2011. Karlberg JPE. Responding to Emerging Queries on the Legitimacy and Validity of Globalization of Clinical Trials. Clinical Trial Magnifier. March 2009. Tufts Center for the Study of Drug Development, Outlook 2008. For External Presentation Purposes; Not for Distribution. 8
Providers: Quality by Region Resultsfrom 2011 Avoca CRO Oversight SurveyOverall level of comfort with the quality of deliverables/services provided by clinical service providers (including your own company) in each regions. N North America 82% 15% 3% 102 Western/Central Europe 77% 21% 2% 103 Australia/New Zealand 54% 43% 2% 81 Eastern Europe 43% 52% 5% 99 Japan 34% 48% 19% 80 Latin/South America 27% 54% 19% 89 India 15% 51% 34% 94 Asia, other than India/China/Japan 12% 50% 38% 78 Africa 11% 36% 53% 73 China 8% 43% 48% 83 0% 20% 40% 60% 80% 100% Very comfortable Somewhat comfortable Not very comfortable For External Presentation Purposes; Not for Distribution.
Need for Qualified InvestigatorsA Supply and Demand Imbalance More Investigators, Lots More Studies Non-US Investigators New Studies New Investigators 12,000 11,914 11,223 10,735 10,000 8,373 8,000 8 000 7,641 6,226 6,324 6,000 5,157 4,941 4,461 4,477 4,482 4,000 3,526 4,069 2,859 3,063 3,038 2,676 2,000 1,697 1,518 0 97 98 99 00 01 02 03 04 05 06 19 19 19 20 20 20 20 20 20 20 Source: CenterWatch Analysis, FDA, 2008. Published in “State of the Clinical Trials Industry” CenterWatch, 2008 For External Presentation Purposes; Not for Distribution.
Perceptions & Misperceptions Abound Misperceptions regarding the globalization of clinical trials include: • Exploitation of vulnerable clinical subjects • Purposefully seeking loose regulatory frameworks in which to conduct trials • Ignoring safety concerns • Exploiting loophole in FDA regs: if studies in U.S. suggest a drug has no benefit, trials from abroad may be used in lieu to secure FDA approval For External Presentation Purposes; Not for Distribution. 11
Increasing Oversight & Regulation “FDA should expand its oversight of foreign clinical trials.” FDA increased its number of inspections from 2007-2009, but still conducts relatively fewer foreign inspections than domestic inspections - 11% of foreign establishments inspected in 2009 For External Presentation Purposes; Not for Distribution. 12
Recent Trends inRegulatory Inspections • Both FDA and PMDA have increased the number of inspectors and inspections • Findings at the site level are increasing and resulting in more findings of GCP Violations and Warning Letters The CenterWatch Monthly, Vol 18, Issue 8, August 2010 For External Presentation Purposes; Not for Distribution. 13
GCP Warning Letter Breakdown(FDA WLs Issued in 2009-10) Requirement of IRB Inadequate IRB Review Inadequate IC Process Protocol Violations Deviation Inadequate Documentation Annual IRB Approval Missed Inadequate PI Oversight Inadequate Monitoring 0 1 2 3 4 5 6 7 8 9 10 IRB Deviations(5) PI Deviations (18) M onitor Deviations(3) http://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/EnforcementActivitiesbyFDA/WarningLettersandNo iceofViolationLetterstoPharmaceuticalCompanies/default.htm For External Presentation Purposes; Not for Distribution. 14
How Does Industry Approachthese Issues? • Ensure compliance with the applicable laws and regulations Need to consider all relevant laws in addition to specific medicines laws concerning the conduct of trials, e.g., Privacy laws • Comply with internationally recognized guidelines and ethical principles Examples: ICH, GCP, CIOMS and Declaration of Helsinki • Require a universal position to be adopted for all clinical research activities -- this is ideal Example: Pfizer’s “Global Clinical Trials Standards” Policy • Support global programs designed to enhance infrastructure for study conduct and oversight Ethics committees, qualified investigators & investigator training • Seek certification of Research Programs e.g., AAHRPP For External Presentation Purposes; Not for Distribution. 15
Site Training & Certification AAHRPP certification Goal • All Pfizer CRUs certified (a first for Industry) • Core Research Sites in progress: Canada, USA, India, India Hong Kong • Additional sites progressing towards certification in: China Russia Brazil • Global Health Fellows worked with AAHRPP to improve ethical research standards in China For External Presentation Purposes; Not for Distribution.
Collaborative Training Workshops:E.g., Clinical R&D in Korea • 5 Training Sessions on R&D with 550 University Graduate Students; Certificates Issued Co-hosted with a local CRO (DreamCIS) and co-sponsored with KoNECT (Korea National Enterprise for Clinical Trial), Catholic University of Daegu, Korea University Anam Hospital Clinical Trial Center, Catholic Medical Center Clinical Research Coordinating Center, Inje University Pusan Paik Hospital Clinical Trial Center • R&D Workshop for 200 physicians Sponsored with Hospitals in Daegu, Severance Hospital. Catholic Medical Center, Korea University Medical Center, Asan Medical Center, Seoul National University Hospital, B H it l Busan P ik H Paik Hospital. it l • Research Operations Training for 40 Coordinators from CRS consortium (Asian Medical Center, Samsung Medical Center, Yeonsei University Severance Hospital, Seoul National University Hospital). • Pfizer KOREA KoNECT: Expert Course for Clinical Research Coordinators Sponsored by the Ministry of Health, Welfare, Family Affairs, KONECT, Daejeon City. Hosted with Chungnam National University Hospital CTC, Kyunghee University School of Nursing. For External Presentation Purposes; Not for Distribution. –1
Focus on Quality, Compliance andPerformance % Non Performing Sites25 232015 131050 –213% –82% Emerging Markets Developed Markets FDA Inspection results Sep-08 to Apr-10 –100% –100% 100% 80% 60% Official Actions 40% Voluntary Actions 20% No actions 0% Emerging Developed Markets Markets (ex US) For External Presentation Purposes; Not for Distribution.
Summary• Significant trend towards more outsourcing to reduce fixed development costs• Globalization of the clinical trials is creating “supply/demand” pressures on regulators, sponsors and clinical investigators in emerging markets• The industry m st in est reso rces to ens re q alit and ind str must invest resources ensure quality compliance in the conduct of global clinical trials including a risk based approaches to quality management• GCP training of investigators and clinical staff is essential• Ultimately, well conducted global clinical trials will improve the R&D productivity and also increase patient access to medicines For External Presentation Purposes; Not for Distribution. 19
Transformation of the Dev Ops Model at Pfizer For External Presentation Purposes; Not for Distribution. 20
Simple with Clear Accountability 17+ FSPs ICON & Parexel For External Presentation Purposes; Not for Distribution.
Key Elements of New Dev Ops Model From Pfizers previous ...to innovative, value-creating sourcing model... strategic partnerships 17+ Functional Service Providers Full service model with alliance partners supporting entire for individual studies resulting in assets with increased visibility and accountability diffuse accountability & limited transparency Quality = imposed Pfizer Quality = AP responsibility for robust process with Pfizer processes accountable for oversight Selection of best indi id al individual Collaboration for best overall clinical development quality & o erall de elopment q alit functional expertise performance Incentives towards innovative approaches from APs Prescriptive specifications on In the clinical development plan, on resourcing, site selection clinical studies and timeline Partners competition on overall performance and joint value Suppliers competition on unit creation costs With focus on speed & quality Impact on NPV of assets Trusting environment / platforms in which innovative ideas can Transactional relationships flourish This is an industry-leading change For External Presentation Purposes; Not for Distribution.
Extensive Due Diligence:Evaluation of Leading1 Global Clinical CROs Quality was a primary driver of selection of the partners: Overall quality approaches/philosophy, quality quantification, learnings from past experience Technical capability to execute on plan, including IT support of tracking of quality Willingness to be transparent and to work with us collaboratively on addressing challenges Evidence-based process was followed Discussions with senior management of each company Deep technical discussions between Pfizer subject matter experts (SMEs) and partner SMEs on process and culture On-site audits by team of internal and external experts covering following areas: Regulatory Inspection Management Clinical trial related activities Key document development (e.g. Corrective action and remedial plans Investigator recruitment and training protocol, ICF) QC and QA activity Study start up and close out Information Technology SOP development and management Project management Validation of computerized Records management Monitoring systems Staff training Trial Master File Clinical data management/clinical Subcontracting and vendor oversight Safety management and programming Facilities reconciliation Data retention, security and Medical writing recovery 1. Top 4 of 5 by revenue in the clinical development space For External Presentation Purposes; Not for Distribution.
Overarching Quality & RiskMitigation Strategies Quality & risk mitigation built into the agreement & operating plans Balanced Scorecard with metrics used as indicators of performance, includes specific quality metrics Metrics are used to assess performance and determine rewards/penalties Service Agreements contain requirements on specific quality/compliance Standards Support for voluntary certification of Pfizer research programs Proposal to seek full certification by AAHRPP which is considered “Gold Standard” for independent accreditation of research programs Regulatory agency consideration Position of regulatory agencies (FDA, MHRA, EMA) was considered in advance of executing Organizational model was “built for purpose” over the last 24 months For External Presentation Purposes; Not for Distribution. 24
Key Features of the New Model • Partners input in operational plan and investigator selection to optimize quality, cost and execution timelines • Partners commit to maintain/develop capabilities in all TAs where Pfizer needs support • Post-PoC asset allocation to one AP with expectation that they will follow p y through the entire development / life cycle • Expectation that all studies will be managed by one of the two APs • Unconstraining the APs by having them use their systems and procedures to deliver value to Pfizer With overall quality standards defining the “what” set by and actively monitored by Pfizer For External Presentation Purposes; Not for Distribution. 25