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This presentation describes a state-of-the-art partnership alliance between Otsuka and Covance. It also describes a staffing forecasting model that will be used in the partnership.
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A New Model for Collaborative Partnerships
William H. Carson, M.D.Sr Vice President, Global Clinical Development
Otsuka Pharmaceutical Development & Commercialization, [email protected]
David ZuckermanPresident
Customized Improvement Strategies [email protected]
Key Points
1. Otsuka is building a true pharma-CRO Alliance
2. Otsuka has based our CRO selection on cultural fit rather than capability
3. We are using long-term, systematic staffing planning to assure continuity & staff availability
Apr 2009 2
The Otsuka Pharmaceutical GroupGlobally
106 Companies
18 Nations
33,000+ Employees
77 Factories/Plants
18 Research Facilities
Healthcare 38%
Consumer Products 62%
Apr 2009 3
Tufts & CIS Analyses: Key Results
• Industry– Most Pharma’s using tactical, capacity-driven outsourcing– Key characteristics of strategic partnerships
• Formal needs and core capabilities assessment• Internal governance structures• Small number of carefully selected, partner-providers• Operating procedures focused on collaboration
• Otsuka– Outsourcing approach is tactical, capacity-driven – Too many CROs, providers– Multiple CRO governance structures– Too many required Otsuka competencies– Limited outsource management staffing and training
Apr 2009 4
Otsuka 2020 Future StateImplies a Substantial Leap
Apr 2009 5
TacticalTactical StrategicStrategic
I J
H
G
F
DA
Otsuka
B
C
Size
of C
ompa
ny b
y R&
D S
pend
ing
(Mill
ions
of
USD
, 200
6)
Otsuka Decision: Collaboration
• Otsuka Expectations– Project Management Performance– Team performance & stability– CRO anticipates Otsuka needs & resolves issues quickly
• CRO Expectations– Upfront pipeline planning & collaborative protocol optimization
– Multi-level involvement and engagement
– Time to anticipate and engage the ‘best’ available team
• Joint requirements– Complementary responsibilities without redundancy– Core competency alignment– Ability to collaborate at all management & team levels
Apr 2009 6
1
2008 2009 2010 2011 2012
One-Now, More-LaterProof of Concept Approach
Num
ber o
f CRO
s
Tactical Providers
StrategicPartners
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 7
OtsukaProof of Concept Objectives
Successfully identify, select and negotiate an agreement with a core strategic partner that will:– Develop systematic approach to outsourcing – Leverage internal and external expertise– Build integrated project teams– Define strategies to maximize efficiency, quality, and
innovation – Evaluate organizational requirements for successful
implementation– Establish an effective, long-term relationship
Apr 2009 8
Partnerships fail due to communication & alignment problems, not technical capabilities
Partnerships fail due to communication & alignment problems, not technical capabilities
Otsuka’s Outsourcing Initiative Process1. Identify outsourcing goals
& vision for OtsukaCIS 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 approvedBDCC approves outsourcing strategy
6. Implementation of outsourcing strategyPartner TF forms and works on implementation We are hereWe are here
Apr 2009 9
We Used a Unique Selection Approach
Identify Capable CROs
Identify Capable CROs
Select Culturally Compatible CROsSelect Culturally
Compatible CROsSelect BestOverall FitSelect BestOverall Fit
• Size• Experience• TA coverage• Global reach• etc
• Size• Experience• TA coverage• Global reach• etc
• Application, not RFP• Malcolm Baldrige National
Quality Award based• 50 pages, 3 weeks
• Application, not RFP• Malcolm Baldrige National
Quality Award based• 50 pages, 3 weeks
• Rank ordered• Top 10 selected• Rank ordered• Top 10 selected
• 100 pt objective scoring• Top 4 selected• Scoring & feedback provide
to all applicants
• 100 pt objective scoring• Top 4 selected• Scoring & feedback provide
to all applicants
• Review of all functions & approaches
• Mock kickoff meeting• 8 hrs, 35-50 people from
Otsuka & each CRO
• Review of all functions & approaches
• Mock kickoff meeting• 8 hrs, 35-50 people from
Otsuka & each CRO
• 100 pt objective scoring• Top CRO selected• 100 pt objective scoring• Top CRO selected
Apr 2009 10
CRO Comments on Otsuka’s Approach
• 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.
• The level of professionalism and knowledge your team exudes is amazing.
• We will use the information as a benchmark of how we can continuously improve our operations and approach to partnership.
• Otsuka’s thoughts regarding the strength of our application are appreciated.
• 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.
Apr 2009 11
Alliance Development Status - Mar 2009
• Executive & Operations Governance Teams formed– Current state health check– Vision of the future
• Vivid description of 2011 operating norms (MBNQA based)– Charters & operating guidelines
• Alliance operating norms being developed– Pipeline forecasting– Work sharing & management– IT & process integration– Issue escalation process eliminated?– Novel pricing strategies?
• Alliance now in kickoff process– Near-term actions required to commence the alliance– Long-term actions to optimize the alliance during POC
Apr 2009 12
Future Views
If We Fail….
…And If We Succeed
Apr 2009 13
The Global Business Partnership AlliancePartnership Crab
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, 2005-2009Apr 2009 14
What now?
• Make the Alliance work• Perfect our forecasting
Apr 2009 15
One Key to Success:Accurate Forecasting
Otsuka PipelineOtsuka Pipeline
Otsuka Product Development
(PD) Level Probabilistic
Forecasts
Otsuka Product Development
(PD) Level Probabilistic
Forecasts
Otsuka PD Level& CRO
Staffing & Mgmt Probabilistic
Forecasts
Otsuka PD Level& CRO
Staffing & Mgmt Probabilistic
Forecasts
CROTrial-level
PointForecasts
CROTrial-level
PointForecasts
CRO Multi-Trial Staffing Point
Forecasts (Bottom Up)
CRO Multi-Trial Staffing Point
Forecasts (Bottom Up)
Integrated Pipeline &
Staffing Forecast
The missing link
Apr 2009 16
How Does theStaffing Model Work?
INDIND Phase 1Phase 1 Phase 2Phase 2 Phase 3Phase 3 NDANDA Post LaunchPost Launch
Annual PipelineAdditions
1212
1313
1414
11 22 33 44 55 66 77CurrentPipeline
88 1010
PlannedPipeline99 1
111
Run probabilistic simulation (typically 500 cases)
Generate portfolio, staffing and management forecastsFeb 09Apr 2009 17
18
Calculating the Staffing Forecast
Apr 2009
PipelinePipeline
Single case output:5-Year Otsuka + CRO Staffing & Management Forecast
Single case output:5-Year Otsuka + CRO Staffing & Management Forecast
Calculate staffing required
Calculate staffing required
Calculate Otsuka staffing gaps
Calculate Otsuka staffing gaps
Otsuka StaffOtsuka Staff
Calculate CRO staffing required
Calculate CRO staffing required
Calculate Otsuka management
required
Calculate Otsuka management
required
19
Example Result:Total Requirements
Apr 2009
Otsuka Staffing ShortfallOtsuka Staffing Shortfall
CRO Staffing RequirementCRO Staffing Requirement
Otsuka Management Requirement
Otsuka Management Requirement
20
How Do We Use the System?
• We aim to eliminate surprises, confusion & frustration!– Predict CRO staffing needs– Predict Otsuka management needs– Identify opportunities for Otsuka staff
advancement– Prompt discussions about alliance relationships &
contracting• Minimum Otsuka financial commitments• Minimum CRO staffing guarantees• Ways to improve management and reduce headcount
needsApr 2009
Apr 2009 21
Questions
?
? ?
??
%*@#$% !!!
