Increasing Agility and Innovation in the Clinical Supply ... · Wholly owned affiliate of Zuellig Pharma ... 1/3 Central Depot Model IMP source US, EU Thailand Site 2 Site 1 Site

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Increasing Agility and Innovation in the Clinical Supply Chain for Cost Optimization

CTS East Coast

Oct 19th , 2011

Philadelphia


Introduction Zuellig Pharma Asia Pacific

Privately Owned (80/20) Established over 90 years Sales 2010: US$ 6.9 billion

Asia Pacific’s leading distribution solutions provider for healthcare products

14 countries and regions in Asia Pacific 9,000 employees


Introduction ZP Specialty Solutions Group

Wholly owned affiliate of Zuellig Pharma

Offers logistics & supply chain management solutions

HQ in Singapore since 2009

Core businesses:

Clinical Reach (IMP services suite)

• Specialty logistics for IMP and supplies

• Own depot network across 13 APAC countries

• Transport solutions (International courier and domestic)

• Comparator drug sourcing & labeling

• 1,000 clinical studies over 5 years (40% cold chain)

Pharma Bio-Logistics (regional distribution of commercial drugs)

Anti-counterfeit Solutions (combining serialization and SMS technology)


Our Network, Your Clinical Reach

Central Depot (2)

Local Depots (12)

New Local Depots 2012 (2 planned)

Sydney

New Zealand

Mumbai

Beijing

Shanghai

Hong Kong

Kuala Lumpur

Bangkok

Taipei

Kobe

Manila

Ho Chi Minh

Singapore

Jakarta

Seoul Features a unique network of

storage Depots for IMP

covering 14 locations

Bangladesh

Sri Lanka


Agenda

Changing environment

The role of Asia

Evaluating supply chain models

Case study on cost optimization

Innovation in the clinical supply chain


Cost pressure in R&D and demand for higher ROI greater than ever

Trend to greater, more holistic collaboration

Pfizer Parexel / ICON

GSK Parexel / PPD

BMS Parexel / ICON

Eli Lilly Parexel (for Asia)

Eisai Quintiles

Takeda Global strategic partnership with Quintiles / Covance

Sanofi A. Covance (10 year strategic deal)

Merck PPD

Reduced number of service partners higher contract value

Shift in risk/reward sharing approach (outcome based remuneration)

The backdrop

Sponsor

CRO


Low innovation rate in clinical trial

supply chain management

Is your service provider a potential liability for you?

What are the incentives for logistics service

providers to innovate?

Is single source and volume leverage the (only)

route to greater cost savings in clinical trial logistics?

More dominant role of procurement

The emerging challenge

Sponsor

CRO Logistics?


The Threat: Patent cliff (top-line challenge)

Between 2010 - 2015, $142 bln sales of patented products face generic competition

(IMS)

Speed to market

The Opportunity: Increased Revenue

Closing gap between research and markets

(e.g. Asian specific diseases)

Stakeholders: Increasing regulatory requirements

Larger trials required (more patients across more countries, genetic diversity)

Internal: Rising cost of clinical trials & low R&D productivity

High cost of drug development (est. 800M – 1B USD per drug)

Unsatisfactory return on R&D investment

What drives clinical research

The role of Asia


Better access to patients

Low clinical trial density (CT per million population)

China (0.4), India (0.7), South Korea (9.5), USA(120), Germany (51)

Faster recruitment rates

85% of clinical trials in traditional markets experience delays due to patient recruitment

Lower costs per patient (40-60% cheaper)

Asia (excluding China) is up to 60% of the cost in US/Western Europe

Population with genetic, therapeutic and demographic advantage

Hospitals increasingly experienced in conducting global multinational trials

Talented workforce (qualified investigators and site support)

Large number of drug naïve population

The Asian attraction


Asia's growth

Growth in studies (2008-2010):

North America 55%

Europe 94%

Asia Pacific 95%

65% of FDA-regulated clinical trials will be conducted with sites outside of US by 2013 (http://csdd.tufts.edu)

Source: Clinicaltrials.gov

Source: Frost & Sullivan

0

200

400

600

800

1000

1200

2004 2005 2006 2007 2009

CRO Market Size in USD million (Asia)

0

2000

4000

6000

8000

10000

2007 2008 2009 2010

New Clinical Trials (2007 – 2010) by region

North America Europe Asia Pacific

Evaluating Supply chain models for Asia

Modifying supply chain tactics according to

clinical study dynamics


Approaches to IMP shipment 1/3 Central Depot Model

IMP

source

US, EU

Thailand

Site 1

Site 2

Site n

Taiwan

Site 1

Site 2

Site n

Central

Depot

Disadvantage

• Highly dependent on courier service

• Highly dependent on shipper performance

• High transit risk, excursion risk

• High international shipment /packaging cost

• IMP recall, return & destruction challenging/

impossible and costly

Advantage

• Relatively low IMP needed

• Standardized external processing

• Simplicity for IMP source

• Efficient shippers to Central Depot

• Centralized kitting, labeling option

http://www.google.com.sg/imgres?imgurl=http://www.vectorstock.com/composite/193649/customs-vector.jpg&imgrefurl=http://www.vectorstock.com/royalty-free-vector/193649-customs-vector&usg=__C-jUKrsdqHTkdLI5C1-rGKX3mkY=&h=400&w=380&sz=19&hl=en&start=126&zoom=1&um=1&itbs=1&tbnid=adQ6tCr_2cGhXM:&tbnh=124&tbnw=118&prev=/images?q=customs+barrier&start=108&um=1&hl=en&sa=N&ndsp=18&tbs=isch:1&ei=xSSPTdSSCY6GvAP_3Ii8DQ






Approaches to IMP shipment 2/3 Local Depot Model

IMP

source

US, EU

Korea

Site 1

Site 2

Site n

Local

Depot Disadvantage

• More IMP needed

• Forecast based supply (≠ recruitment)

• Higher depot fix cost, storage & mgmt cost

• Quality management/ qualification of depots

Advantage

• Local validated and efficient shippers

• Shortest lead time to site (same or next day)

• Most responsive to site orders

• Lowest cost (local transportation)

• Same time zone / language as site

• Recalls, returns, destruction is localized

• Local comparator drug sourcing option

• Local expiry date re-labeling saves IMP cost



Approaches to IMP shipment 3/3 Hybrid Depot Model

IMP

source

US, EU

Thailand

Site 1

Site 2

Site n

Korea

Site 1

Site 2

Site n

Taiwan

Site 1

Site 2

Site n

Central

Depot

Local

Depot

Disadvantage

• Complex project mgmt

• Forecast based supply to depot

• Higher depot fix cost, storage & mgmt cost

Advantage

• Reasonable complexity for IMP source

• Most adaptable, supply strategy can change

during study

• Shortest lead time (1-3 days) to Site

• High responsive to Site orders

• Optimum cost (Inventory vs. local transport)

• Same time zone / language as site

• Suitable for adaptive trial designs and

competitive recruitment strategies








The ultimate supply chain challenge

Have the right kit

… at the right time

… at the right site

… in the right quality

… for the right patient

agility to adapt to changing requirements (known)

and circumstances (unknown).

… while minimizing waste of

time

cost

drug/materials

To do this …

Your

supply chain

needs …

Case study


Case Study

• Global Phase III study, 36 months

• 7,000 subjects (1,755 for Asia)

• IP (2-8°C)

• IP Kit valued at 121.00 USD

• Local sourced comparator drug

• Return and destruction of IP at project end

Project Challenges & Key Logistics Figures

Several states

7 countries

Indonesia

Malaysia

Philippines

Singapore

Taiwan

• A surprise element unknown to all parties at

time of RFQ.


Case Study

Key Transaction Figures

• 2 inbound per year

• 12 outbound per site

• 1 return per site

No. of sites by country:

Malaysia – 5 Philippines – 20

Indonesia – 2 Taiwan – 15

Singapore – 3

Central Depot

(benchmark)

387,000 USD

Hybrid Model

(alternative)

240,000 USD

Taipei

Manila

Singapore

Thailand

Malaysia

Indonesia


Case Study

Other Benefits

• Local comparators saved additional USD 55,000 (drug, transport & duties)

• 3 depots managed by single provider for Asia

• PH, TW: Re-usable shipping containers (no disposal at sites needed)

• Zero IP loss due to temperature excursion (no hidden cost)

• No complications with project close-out (returns & destruction)

Key Transaction Figures

• 2 inbound per year

• 12 outbound per site

• 1 return per site

No. of sites by country:

Malaysia – 5 Philippines – 20

Indonesia – 2 Taiwan – 15

Singapore – 3

Central Depot

(benchmark)

387,000 USD

Hybrid Model

(alternative)

240,000 USD

Courier -146,000

Additional IP (20%) + 42,000

Packaging Box - 36,000

Project Mgmt + 19,000

Return/destruct. - 12,000


The Project Manager’s Office


May 6th, 2011 The surprise element arrives …

약사법 시행규칙 75조(의약품의 표시 및 기재사항)

⑥ 법 제56조 각 호 외의 부분 단서에 따라 임상시험용의약품의 용기나 포장에는 다음 각

호의 사항을 기재하여야 한다. 다만, 법 제31조제2항 및 제3항 또는 법 제42조제1항에 따른

허가를 받지 아니하거나 신고를 하지 아니한 사항은 기재하지 아니한다.

•"임상시험용"이라는 표시

•제품의 코드명 또는 주성분의 일반명

•제조번호 및 사용(유효)기한 또는 재검사일자

•저장방법

•임상시험계획 승인을 받은 자의 상호와 주소


… Translation

Announcement of regulatory change issued on 6. May 2011

According to the revised Pharmaceutical Affair Law 56, IND holder’s name and

address has to be included on each pack of IMP.

(Effective date: 6. May 2011 )

• Investigation medicinal products

• Product code of general name of API

• Batch no and expiry date or retest date

• How to store / storage condition

• IND holder’s name and address

IND (investigational new drug)


... Effect

“I don’t like to hear

about problems, I

want solutions!”


... The solution

16 customers using that depot

… representing 35 sponsors

… affecting 200 studies

… requiring 85,000 kits at the depot to be re-labeled

5 months later …

Still, most incoming shipments are received non-compliant. IP either already

manufactured or it is easier to apply label in Korea than change the label at source.

Key conclusion:

Working with the right vendor is the key to being able to respond to unexpected

local challenges and to have flexibility.

How we solved the problem:

we printed label locally

we provided a local GMP compliant labeling service

we ensured there were no disruptions to IP supplies to sites

… all for a bargain of just USD 0.65/IP kit.

Innovation in the clinical supply chain


Versatile supply chain models as driver of cost avoidance

Biological specimen collection process (consolidation & packaging)

Tax & duty recovery for IP that has been destroyed

Simplified fee structure

Eye on innovation


Asia’s role is increasing and Asian countries are becoming more

frequently part of US FDA controlled clinical trials.

To harness greater cost saving opportunities, supply chain

models and execution will need to become more sophisticated.

Assess with an open mind the viability of new emerging

solutions alternatives and scrutinize current alliances to ensure

continued value creation through innovation.

Summary


Thank you!

Documents

Increasing Agility and Innovation in the Clinical Supply ... · Wholly owned affiliate of Zuellig Pharma ... 1/3 Central Depot Model IMP source US, EU Thailand Site 2 Site 1 Site