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Otsuka's New CRO Alliance


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This presentation describes Otsuka's new strategic partnership alliance, how we chose our strategic partner and how the alliance is built. It also discusses a state-of-the-art staffing forecasting tool to be used in the partnership.

Published in: Health & Medicine, Business

Otsuka's New CRO Alliance

  1. 1. A New Model for Collaborative Partnerships William H. Carson, M.D. Sr Vice President, Global Clinical Development Otsuka Pharmaceutical Development & Commercialization, Inc. [email_address] David Zuckerman President Customized Improvement Strategies LLC [email_address]
  2. 2. Key Points <ul><li>Otsuka is building a true pharma-CRO Alliance </li></ul><ul><li>Otsuka has based our CRO selection on cultural fit rather than capability </li></ul><ul><li>We are using long-term, systematic staffing planning to assure continuity & staff availability </li></ul>Apr 2009
  3. 3. The Otsuka Pharmaceutical Group Globally 106 Companies 18 Nations 33,000+ Employees 77 Factories/Plants 18 Research Facilities Healthcare 38% Consumer Products 62% Apr 2009
  4. 4. Tufts & CIS Analyses: Key Results <ul><li>Industry </li></ul><ul><ul><li>Most Pharma’s using tactical, capacity-driven outsourcing </li></ul></ul><ul><ul><li>Key characteristics of strategic partnerships </li></ul></ul><ul><ul><ul><li>Formal needs and core capabilities assessment </li></ul></ul></ul><ul><ul><ul><li>Internal governance structures </li></ul></ul></ul><ul><ul><ul><li>Small number of carefully selected, partner-providers </li></ul></ul></ul><ul><ul><ul><li>Operating procedures focused on collaboration </li></ul></ul></ul><ul><li>Otsuka </li></ul><ul><ul><li>Outsourcing approach is tactical, capacity-driven </li></ul></ul><ul><ul><li>Too many CROs, providers </li></ul></ul><ul><ul><li>Multiple CRO governance structures </li></ul></ul><ul><ul><li>Too many required Otsuka competencies </li></ul></ul><ul><ul><li>Limited outsource management staffing and training </li></ul></ul>Apr 2009
  5. 5. Otsuka 2020 Future State Implies a Substantial Leap Apr 2009 I J H G F D A Otsuka B C Size of Company by R&D Spending (Millions of USD, 2006) Tactical Strategic
  6. 6. Otsuka Decision: Collaboration <ul><li>Otsuka Expectations </li></ul><ul><ul><li>Project Management Performance </li></ul></ul><ul><ul><li>Team performance & stability </li></ul></ul><ul><ul><li>CRO anticipates Otsuka needs & resolves issues quickly </li></ul></ul><ul><li>CRO Expectations </li></ul><ul><ul><li>Upfront pipeline planning & collaborative protocol optimization </li></ul></ul><ul><ul><li>Multi-level involvement and engagement </li></ul></ul><ul><ul><li>Time to anticipate and engage the ‘best’ available team </li></ul></ul><ul><li>Joint requirements </li></ul><ul><ul><li>Complementary responsibilities without redundancy </li></ul></ul><ul><ul><li>Core competency alignment </li></ul></ul><ul><ul><li>Ability to collaborate at all management & team levels </li></ul></ul>Apr 2009
  7. 7. One-Now, More-Later Proof of Concept Approach 1 2008 2009 2010 2011 2012 Number of CROs Tactical Providers Strategic Partners Work transfers gradually from tactical providers to strategic partner (e.g., end of study, phase or contract period), not all at once Proof of concept (POC) period Add additional Strategic Partners after POC Apr 2009
  8. 8. Otsuka Proof of Concept Objectives <ul><li>Successfully identify, select and negotiate an agreement with a core strategic partner that will: </li></ul><ul><ul><li>Develop systematic approach to outsourcing </li></ul></ul><ul><ul><li>Leverage internal and external expertise </li></ul></ul><ul><ul><li>Build integrated project teams </li></ul></ul><ul><ul><li>Define strategies to maximize efficiency, quality, and innovation </li></ul></ul><ul><ul><li>Evaluate organizational requirements for successful implementation </li></ul></ul><ul><ul><li>Establish an effective, long-term relationship </li></ul></ul>Apr 2009 Partnerships fail due to communication & alignment problems, not technical capabilities
  9. 9. Otsuka’s Outsourcing Initiative Process 1. Identify outsourcing goals & vision for Otsuka CIS works with Executive Team 2. Develop industry benchmarking data Tufts University conducts benchmarking study 3. Determine current Otsuka outsourcing practices & capabilities CIS interviews key executives & managers 4. Perform gap analysis & develop proposed Otsuka outsourcing strategy Utilizing interview and benchmarking data, CIS proposes an Otsuka outsourcing strategy 5. Otsuka outsourcing strategy approved BDCC approves outsourcing strategy 6. Implementation of outsourcing strategy Partner TF forms and works on implementation We are here Apr 2009
  10. 10. We Used a Unique Selection Approach Identify Capable CROs Select Culturally Compatible CROs Select Best Overall Fit <ul><li>Size </li></ul><ul><li>Experience </li></ul><ul><li>TA coverage </li></ul><ul><li>Global reach </li></ul><ul><li>etc </li></ul><ul><li>Application, not RFP </li></ul><ul><li>Malcolm Baldrige National Quality Award based </li></ul><ul><li>50 pages, 3 weeks </li></ul><ul><li>Rank ordered </li></ul><ul><li>Top 10 selected </li></ul><ul><li>100 pt objective scoring </li></ul><ul><li>Top 4 selected </li></ul><ul><li>Scoring & feedback provide to all applicants </li></ul><ul><li>Review of all functions & approaches </li></ul><ul><li>Mock kickoff meeting </li></ul><ul><li>8 hrs, 35-50 people from Otsuka & each CRO </li></ul><ul><li>100 pt objective scoring </li></ul><ul><li>Top CRO selected </li></ul>Apr 2009
  11. 11. CRO Comments on Otsuka’s Approach <ul><li>We appreciate Otsuka’s efforts and transparency in this process – its not usual to get this level of constructive feedback during one of these partnership processes. </li></ul><ul><li>The level of professionalism and knowledge your team exudes is amazing. </li></ul><ul><li>We will use the information as a benchmark of how we can continuously improve our operations and approach to partnership. </li></ul><ul><li>Otsuka’s thoughts regarding the strength of our application are appreciated. </li></ul><ul><li>Thanks so much for the feedback – there is SO much great information here that we truly appreciate and will use in our process of continuous improvement. </li></ul>Apr 2009
  12. 12. Alliance Development Status - Mar 2009 <ul><li>Executive & Operations Governance Teams formed </li></ul><ul><ul><li>Current state health check </li></ul></ul><ul><ul><li>Vision of the future </li></ul></ul><ul><ul><ul><li>Vivid description of 2011 operating norms (MBNQA based) </li></ul></ul></ul><ul><ul><li>Charters & operating guidelines </li></ul></ul><ul><li>Alliance operating norms being developed </li></ul><ul><ul><li>Pipeline forecasting </li></ul></ul><ul><ul><li>Work sharing & management </li></ul></ul><ul><ul><li>IT & process integration </li></ul></ul><ul><ul><li>Issue escalation process eliminated? </li></ul></ul><ul><ul><li>Novel pricing strategies? </li></ul></ul><ul><li>Alliance now in kickoff process </li></ul><ul><ul><li>Near-term actions required to commence the alliance </li></ul></ul><ul><ul><li>Long-term actions to optimize the alliance during POC </li></ul></ul>Apr 2009
  13. 13. Future Views If We Fail…. … And If We Succeed Apr 2009
  14. 14. The Global Business Partnership Alliance Partnership Crab Apr 2009 Behaviour Values / Mindset (Mutual Trust, Transparency, Commitment) Capabilities Cultural Harmony (Understanding, Respect) Complementary Strengths (Market, Technical, Financial) Sponsorship & Shared Objectives (Ongoing leadership, Alignment, Requirements, Benefits, Interests) Integration & Working Together (Roles & Responsibilities, Relationships, Processes, People / Knowledge Transfer) Communications (Clarity, Openness, Levels, Frequency) Evaluation (Vital Signs, Assessment, Contract) Resources (Time, People, Skills, Finance) Source: GBPA Discovery Projects, 2005-2009
  15. 15. What now? <ul><li>Make the Alliance work </li></ul><ul><li>Perfect our forecasting </li></ul>Apr 2009
  16. 16. One Key to Success: Accurate Forecasting Otsuka Pipeline Otsuka Product Development (PD) Level Probabilistic Forecasts Otsuka PD Level & CRO Staffing & Mgmt Probabilistic Forecasts CRO Trial-level Point Forecasts CRO Multi-Trial Staffing Point Forecasts (Bottom Up) The missing link Apr 2009 Integrated Pipeline & Staffing Forecast
  17. 17. How Does the Staffing Model Work? IND Phase 1 Phase 2 Phase 3 NDA Post Launch Annual Pipeline Additions 12 13 14 1 2 3 4 5 6 7 Current Pipeline 8 10 Planned Pipeline 9 11 Run probabilistic simulation (typically 500 cases) Generate portfolio, staffing and management forecasts Feb 09 Apr 2009
  18. 18. Calculating the Staffing Forecast Apr 2009 Pipeline Single case output: 5-Year Otsuka + CRO Staffing & Management Forecast Calculate staffing required Calculate CRO staffing required Calculate Otsuka management required Calculate Otsuka staffing gaps Otsuka Staff
  19. 19. Example Result: Total Requirements Apr 2009 Otsuka Staffing Shortfall CRO Staffing Requirement Otsuka Management Requirement
  20. 20. How Do We Use the System? <ul><li>We aim to eliminate surprises, confusion & frustration! </li></ul><ul><ul><li>Predict CRO staffing needs </li></ul></ul><ul><ul><li>Predict Otsuka management needs </li></ul></ul><ul><ul><li>Identify opportunities for Otsuka staff advancement </li></ul></ul><ul><ul><li>Prompt discussions about alliance relationships & contracting </li></ul></ul><ul><ul><ul><li>Minimum Otsuka financial commitments </li></ul></ul></ul><ul><ul><ul><li>Minimum CRO staffing guarantees </li></ul></ul></ul><ul><ul><ul><li>Ways to improve management and reduce headcount needs </li></ul></ul></ul>Apr 2009
  21. 21. Questions Apr 2009 ? ? ? ? ? %*@#$% !!!