Igniting Effective Partnerships and

Measuring the Results

Robert Kaminsky, MedSpan Research

Lindsey Thomas, Sagent Pharmaceuticals

Agenda

• Objectives

– Key takeaways

• Methodology

– Data collection

– Analysis

– Reporting

• Key Learnings

• Roll-out plan

2

Caveat

• The methodology we will review today was recently used for a study Sagent Pharmaceuticals sponsored.

• The data and results have been changed to protect Sagent’s proprietary interests.

• This particular case study isn’t market research as the manufacturer:

– Knew the participants by name

– Combined its data gathering with building relationships.

• We are presenting the case study to PMRG’s members as the methodology and insights are:

– Compelling

– Viable for pure, stand-alone marketing research if blinded.

3

Study Objectives

Sagent Pharmaceuticals asked MedSpan to assess its relationships with its key manufacturing partners

Business Goal

Study Objectives

Strengthen Sagent’s

current relationships with

its key manufacturing

partners

Improve Sagent’s business

processes to set a stronger

foundation for future

relationships

• Assess key manufacturing

partners’ perceptions about their

relationships with Sagent

• Compare the key manufacturing

partners’ perceptions of Sagent to

their perceptions of other drug

companies

• Evaluate Sagent’s own

perceptions of its relationships

with its key manufacturing

partners

• Debunk internal misperceptions

of performance, if any

5

Key takeaways

• The strengths and weaknesses of relationships between companies can be measured.

• The analytical framework examines both business processes and relationship management skills.

• The perspectives of both parties should be taken into account through both qualitative and quantitative techniques.

• An analysis provides a framework for optimally allocating resources to strengthen business outcomes.

6

Data Collection

Methodology

Data Collection

Key executives and project personnel at

Sagent’s key manufacturing partners who

work directly with Sagent.

Sagent’s employees who have direct,

regular interactions with one or more key

manufacturing partners.

Sagent provided lists for recruiting its

own executives and those at its key

manufacturing partners.

Respondent Qualifications

When Two weeks for fielding

Where Global

Whom Internet Survey (20-30 minutes)• Key executives and project personnel

at Sagent’s manufacturing partners.• 40 Sagent employees

Phone Interviews (30 minutes)• Handful of Sagent-identified executives at

manufacturing partners who also completed the Internet survey

The study was not blinded.• The objective was to convey to each partner the importance to Sagent of these key business

relationships.

As the study was not blinded, no honorarium was offered.

8

Telephone interviews were conducted with senior executives after they completed the Internet survey

• Objectives of the telephone interviews included:

– Validating the accuracy of the data collected via the Internet survey.

– Developing a better understanding of the rationale underlying the data.

– Gathering specific recommendations for improving each manufacturing partner’s relationship with Sagent.

• Only senior executives were interviewed due to:

– The breadth of their relationship with Sagent.

– The importance of their perspective for the well-being of the relationship.

– Their ability to provide recommendations for improvement that might cut across multiple business processes.

9| PMRG Institute: Igniting Effective Partnerships and Measuring the Results

| Tuesday October 16, 2012 |

Executives from the key manufacturing partners and Sagent

employees evaluated their relationships from two perspectives

Perspective 2:

Relationship

Management

Skills

Each business process or skill category is composed of 5 to 10 detailed data elements.

BUSINESS

RELATIONSHIP

MANAGEMENT

BUSINESS

DEVELOPMENT

PRODUCT

LABELING

REGULATORY

AFFAIRS

PRODUCT

DEVELOPMENT

LAUNCH PREP /

COMMERCIAL

QUALITY

ASSURANCE

COMMUNICATION

RESPONSIVENESSTRUSTWORTHINESS

TIMELINESS

RELIABILITYCREDIBILITY

ASSURANCE

PREPAREDNESSACCOUNTABILITY

Perspective 1:

Business

Processes

10

Data Analysis

The analysis compared Sagent’s performance to three benchmarks

Sagent’s PerformanceCompetition’s

Average

Performance

Sagent’s Internal

Standard

of Excellence

Partners’

Minimum Level

of Acceptable

Performance

Goal

Identify:• Sagent’s competitive advantages and disadvantages for

each business process or category of relationship skill

• Opportunities for improvement in Sagent’s performance

12

We compare Sagent’s performance to the 3 benchmarks, first from a market perspective, and then from that of individual partners

Combined

Perception

Market-Oriented Evaluation

of Sagent’s Strengths

and Weaknesses

Individual

Partner

Perceptions

Sagent’s strengths and

weaknesses with

individual partners

Market Perspective

Individual Partner Perspective

Mfg Partners

1 + 2 + 3…n

Partner 1

Partner 2

Partner 3

Partner 4

13

Results

Market Perspective

Objective of market-level analysis is to identify consistency between partners

• The objective of market-level analysis is to identify consistency between partners.

– Consistent areas of improvement require fundamental change and improvement.

– Consistent strengths are those upon which to build.

• Addressing market-level weaknesses lays the foundation for stronger relationships with future partners.

• Differences between Sagent’s perspectives and those of the market indicate Sagent may be incorrectly investing its time and financial resources.

– Processes and skills that Sagent views as stronger than its partners do Lack of investment in areas where it is needed.

– Processes and skills that Sagent views as weaker than its partners do Potentially making investments in improvements where they are not needed.

15

Sagent’s performance confers a competitive advantage but often does not meet Sagent’s internal standard of excellence

The strength of

Sagent’s and

competitors’

business

processes and

relationship skills

exceeds minimum

requirements.

However, Sagent

does not meet its

internal standards

of excellence for

most of its

business process

and relationship

management skills.

Business Processes*

Always outstanding

performance

Always poor

performanceAlways outstanding

performance

Re

lati

on

sh

ip M

an

ag

em

en

t S

kil

ls*

*Average of ratings of executives from all partners

“Sagent’s level of

support and

service is

stupendous.

Other companies

communicate too

infrequently.”-Manufacturing

Partner Executive

16

Sagent delivers excellent business processes and relationship management skills but none meet its own standard of excellence

BenchmarkPartners’ Minimum

Acceptable PerformanceCompetition

Sagent’s Standard of Excellence

Business Processes

BP1

BP2

BP3

BP4

BP5

BP6

BP7

Relationship Management Skills

Communication

Responsiveness

Reliability

Credibility

Trustworthiness

Accountability

Assurance

Preparedness

Timeliness

Performance

meets or exceeds

benchmark

Opportunity for

improvement versus

benchmark

“Sagent has a great

product development

team. The few problems

we have are taken care

of very quickly.”-Manufacturing Partner

Executive

17

Sagent may be under-investing resources in one process but over-investing in another

Sagent may be over-investing

to strengthen its processes

Sagent may be under-investing

in improving its processes

BP7

BP5

BP4

BP3

BP2

BP6

BP1

Always outstanding

performance

Sagent’s self-ratingAlways FAIR

performanceAlways outstanding

performance

Part

ners

’ ra

tin

g o

f S

ag

en

t*“Sagent’s quality

requirements are

demanding but

appropriate.”-Manufacturing Partner

Executive

18

There are a few specific business process elements where Sagent’s self perceptions differ the most from its partners

Sagent’s most UNDER-VALUED business

process elements

Degree to which less improvement may

be warranted than underway today

BP1

Provides complete explanations for financial items

Provides clear and timely reporting

BP2

Begin negotiations and close deals in a timely manner

When needed, provides supplies reliably and on time

Provides reliable data

Sagent’s most OVER-VALUED business

process elements

Degree to which more improvement may

be warranted than underway today

BP5

Requires acceptable level of data

Provide outstanding expertise

Requires acceptable oversight

Resolve issues to our mutual benefit

19

Results

Individual Partner Perspectives

Partner 4’s relationship with Sagent is strongest, while Partner 1’s is the least strong

• Each partner views Sagent's performance as stronger than Sagent views its own performance.

– This disconnect may encourage Sagent to invest in improvements that are unnecessary.

• There are opportunities for improvement with each partner.

Perceptions of Business Processes Perceptions of Relationship Skills

Partner 1

Partner 2

Partner 4

Partner 3

Partner 1

Partner 2

Partner 4

Partner 3

21

Sagent has three options for addressing its relationships with its manufacturing partners

Sagent can react to each of the study’s

findings in one of three ways...

Build upon strengths

Improve weaknesses

Agree to disagree with partner’s

feedback

22

Partner 1 suggests Sagent has many areas needing improvement while “BP7” and relationship skills are strengths

BenchmarkActavis’ Minimum

Acceptable PerformanceCompetition

Sagent’s Standard of Excellence = 6/7

Business Processes

BP1

BP2 ** ** **

BP3

BP4

BP5

BP6

BP7

Relationship Management Skills

Communication

Responsiveness

Reliability

Credibility

Trustworthiness

Accountability

Assurance

Preparedness

Timeliness

**Not evaluated by any of Partner 1’s executives

Sagent strength

Opportunity for

improvement

“We benefit from

Sagent’s experience.

Our team’s activity

was improved by

Sagent’s feedback.”-Operations Project

Manager

23

BP3 presents the greatest improvement opportunity while BP5 is Sagent’s greatest strength with Partner 1

Greatest Opportunities for Improvement with Partner 1

Business Processes

BP3

Facilitate more timely interactions

Communicate changes in expectations

more clearly

Deliver more accurate reporting

Communicate BP3 changes more clearly

BP4Require less documentation

Determine requirements more accurately

BP6 Require less interaction

BP7

Prepare and submit more effective responses to issues

Negotiate agreements in a more timely manner

Greatest Strengths with Partner 1

Business Processes

BP5

Reverts comments on proposals in

a timely fashion

Clearly communicates

requirements

Clearly communicates priorities

across multiple projects

BP1Provides a business relationship that is worth the effort required toachieve success

Relationship Management Skills

Communication Communicates courteously

24

Key Learnings

Conclusions

• There are opportunities for improvement.

• Goal:

• Meet Sagent’s own standards of excellence.

Key Learnings

• Define Sagent’s standards of excellence in concrete and measurable terms.

• Develop concrete strategies and tactics.

• Educate employees.

• Periodically measure and report on progress

Conclusions and Recommendations – Market-wide Perspective

26| PMRG Institute: Igniting Effective Partnerships and Measuring the Results

| Tuesday October 16, 2012 |

Conclusions and Recommendations – Individual Partner Perspective

Conclusions

• Specific processes and skills require improvement.

• Areas of improvement differ for each manufacturing partner.

Key Learnings• Meet with each partner to

• Explore incidents and issues.

• Agree on measurable goals for improvement.

• Develop approaches for better meeting each other’s needs.

• Agree on methods for periodic measuring and reporting on improvement.

• Educate employees

27

Roll-Out Plan

It is important to share the study’s results throughout the organization to gain consensus on improvement

Interim topline

presentation

Steering committee

review

Senior management

review

Departmental reviews

Audience Senior/dept

management

Gain buy-in to

the process

Completion of

fielding

Steering committee

- Validate findings

- Approve for further

dissemination

Completion of

analysis

Senior management

- Agree on roll-out plan

- Explore key initiatives to

address findings

Two weeks after steering

committee review

Departmental mgmt

Explore key initiatives to

address dept findings

1 to 3 months after senior

management review

Objectives

Timing

29

This methodology is broadly applicable in the assessment of a variety of relationships.

Manufacturing

R&D

Administrative Services

Sales/Marketing

Types of

External

Relationships

Appendix

“Soft” relationship management skills are integral to successful partnerships

Relationship Management Skill

Definition

COMMUNICATION Clear and timely sharing of information

RESPONSIVENESS Promptly addressing the manufacturing partner’s requests and needs

RELIABILITY Dependability and appropriateness of interactions

CREDIBILITY Belief in Sagent’s or other client’s expertise and its application to manufacturing

partner’s needs

TRUSTWORTHINESSHonesty demonstrated, and faith engendered, by manufacturing partner’s

clients

ACCOUNTABILITY Responsibility client assumes for their decisions and actions

ASSURANCE Trust client fosters by understanding and meeting your needs

PREPAREDNESS Client’s organization and readiness for interactions with manufacturing partner

TIMELINESSDegree to which client meets deadlines while continuing to provide high quality

service

32

The study evaluated many relationships to provide context

for the results

Manufacturing

Partners

Client 1

Client 2

Client 3

33

Each business process was composed of 5 to 10 detailed data elements• Example: Clarity of product labeling

– Each of Sagent’s manufacturing partners rated the strength of four clients’ (i.e., Sagent’s and three other clients’) product labeling processes.

– For each criterion, each of Sagent’s manufacturing partners rated:

• Each client’s performance (1=poor performance; 7=outstanding performance):

• Minimum level of performance the manufacturing partner would find acceptable from any client.

• If a criterion did not apply to a respondent’s job responsibility, they entered 0.

• Example of QA evaluation criteria from the manufacturing partner’s perspective:

The pharmaceutical partner ALWAYS... Minimum Sagent Client 1 Client 2 Client 3

Clearly communicates labeling requirements

Clearly communicates print quality

requirements

Requires an acceptable level of labeling

documentation

Reverts changes in a timely fashion

34

Each relationship skill category also was composed of 5 to 10 detailed data elements

• Examples of Communication evaluation criteria:

– Instructions and column headings for each manufacturing partner’s and for Sagent’s executives were the same as for the questions regarding business processes.

The pharmaceutical partner's written,

oral or electronic communications are

ALWAYS:

Minimum Sagent Client 1 Client 2 Client 3

Well-organized

Clear

Complete

Courteous

Occurs often enough to meet my needs

At a reasonable frequency (i.e. not too often

and not too rarely)

35

Reliability

Timeliness

Accountability

Preparedness

Assurance

To focus the analysis, respondents rated the relative importance of each relationship management skill

Communication

Credibility

Trustworthiness

Responsiveness

Important but less so Most important

36