Experts agree that new ways of working are needed if R&D is to continue producing innovative products now and in the future. The past generation of pharmaceutical R&D is over. Life-sciences companies are facing a perfect storm of challenges: eroding margins, decreasing R&D productivity, pressure to demonstrate health outcomes and cost effectiveness, and increased scrutiny over product safety. The classic R&D development takes far too long and is predisposed to identify failures late in the process, which is expensive. The classic model also has a tendency to bring products to the market with little or no therapeutic advantage — at the expense of true innovation. “The time of blockbuster-driven pharmaceutical R&D is quickly drawing to a close," says Sanjeev Wadhwa, partner and director life-sciences R&D, at Computer… Sidebar: Attributes of a Transformed R&D Model Tips for Adopting a New R&D Model Experts Paul Chew, M.D. Senior VP, U.S. Chief Medical Officer/Chief Scientific Officer, Sanofi-Aventis US, a pharmaceutical company that discovers, develops, and distributes therapeutic solutions to improve the lives of everyone. For more information, visit sanofi-aventis.us. Terri Cooper. Principal and National Leader, Life Sciences R&D Practice, Deloitte Consulting LLP, which offers professional services across all segments of the health plan, health provider, and life-sciences industries. For more information, visit deloitte.com. James J. DeSanti. CEO, PharmaVigilant, a SaaS company, provides broad technologies to streamline the clinical trial process for biopharmaceutical companies. For more information, visit pharmavigilant.com. Glen de Vries. President, Medidata Solutions, a global provider of SaaS-based clinical development solutions that enhance the efficiency of clinical trials. For more information, visit mdsol.com. Jean-Jacques Garaud, M.D. Global Head of Pharma Research and Early Development (pRED), Roche, which addresses unmet medical needs through early detection and prevention of diseases to diagnosis, treatment, and treatment monitoring. For more information, visit roche.com. Glenn Gormley, M.D., Ph.D. Chief Science Officer, Co-head, Research & Development, Daiichi Sankyo, and Global Head of Development, President, Daiichi Sankyo Pharma Development (DSPD), Daiichi Sankyo Inc. is dedicated to the creation and supply of innovative pharmaceutical products to address the diversified, unmet medical needs of patients in both mature and emerging markets. For more information, visit dsi.com. Devin Gross. CEO, Emmi Solutions LLC, which provides an interactive media platform that enables healthcare organizations to track patient participation, enhance the patient experience, and meet regulatory guidelines. For more information, visit emmisolutions.com. Michael Naimoli. Worldwide Managing Director, Health and Life Sciences, Microsoft Corp., which is committed to improving health around the world through software innovation. For more information, visit microsoft.com. Todd Reul. Director, Clinical Services, ClearTrial, which provides clinical trial operations (CTO) software that makes the planning, forecasting, and tracking of clinical project and financial performance faster and more accurate. For more information, visit cleartrial.com. Sheila Rocchio. VP of Marketing, PHT Corp., a provider of electronic patient reported outcome (ePRO) solutions used in clinical trials around. For more information, visit phtcorp.com. Val Romberg. Senior VP, Research & Development, CSL Behring, which researches, develops, manufactures, and markets biotherapies that are used to treat serious and rare conditions. For more information, visit cslbehring.com. Sanjeev Wadhwa. Partner and Director Life-Sciences R&D, Computer Sciences Corp. (CSC) Life Sciences Practice, which provides solutions that improve the way physicians deliver services, experts conduct medical research, and institutions provide coverage. For more information, visit csc.com. he past generation of pharmaceutical R&D is over. Life-sciences companies are facing a perfect storm of challenges: eroding margins, decreasing R&D productivity, pressure to demonstrate health outcomes and cost effectiveness, and increased scrutiny over product safety. The classic R&D development takes far too long and is predisposed to identify failures late in the process, which is expensive. The classic model also has a tendency to bring products to the market with little or no therapeutic advantage — at the expense of true innovation. “The time of blockbuster-driven pharmaceutical R&D is quickly drawing to a close," says Sanjeev Wadhwa, partner and director life-sciences R&D, at Computer Sciences Corp. (CSC). “The classic laboratory-centric R&D model — where scientists would discover, protect, and develop a molecule that might have therapeutic promise — has collided with the hard realities of today’s health economics. With internal development pipelines drying up, companies are turning toward increased in-licensing and semantic drug discovery as tools to bring innovative products into their development portfolios." The industry is under increasing pressure from various stakeholders, says Jean-Jacques Garaud, M.D., global head of pharma research and early development (pRED) at Roche. “We must address a critical flaw in current R&D models: the attrition-based model," he says. “This model does not address the true nature and biology of disease. Therefore, a better approach would be to foster interactions between discovery and research, translational medicine and experimental development. In addition, the complexity of biology and life-sciences is such that no one institution can expect to have the ‘big’ discovery any longer. So industry needs to build much stronger links with the outside world through public-private partnerships. This will nurture and accelerate innovation." For example, he says Roche has about 150 actively managed partnerships worldwide and within the pRED organization; has established several translational research hubs with scientific and medical institutions; is expanding the postdoc program; and is increasing its focus on collaborations with leading academic research institutions to ignite innovation and drive value. “These approaches will allow us to tap into external innovation, as well as gain valuable scientific knowledge and expertise," Dr. Garaud says. Another important issue is managing R&D with a lack of infinite funding, says Val Romberg, senior VP, research and development, at CSL Behring. “Historically, the pharmaceutical industry has been willing to spend up to 20% of sales on R&D, thinking that returns were a given," he says. “It is clear now that R&D needs to be treated like any other investment, and sound fiscal choices must be made. Shareholder returns are also much more likely to be driven by lower-risk projects that are feasible to develop. This makes the R&D manager’s job much more difficult; it is about making choices with small amounts of data." Mr. Romberg says companies are the victims of their own success. “In the last 20 years, pharmaceutical and biotherapeutic companies, such as CSL Behring, have developed many new therapies that improve patients’ quality of life and in many cases save lives," he says. “New therapies in development can’t simply treat the condition. They have to be a better therapy than what is already available. The bar for new therapies is getting higher and higher." The Changing R&D Model Over the next five years, because of a number of irreversible change drivers, the pharmaceutical industry’s current R&D model will continue to undergo a dramatic transformation, according to experts at Accenture. Pharmaceutical companies have been under pressure for R&D cost reduction over the past decade. These pressures will continue to increase and intensify as products come off patent in the next several years and the value proposition for future differentiated products becomes more difficult for companies to define. Pharmaceuticals companies are working to establish the most effective operating model to drive cost and efficiencies throughout the entire development process without impacting quality, says Terri Cooper, principal and national leader, life-sciences R&D practice, at Deloitte Consulting. “It is imperative that individual life-sciences companies recognize the activities where they are able to leverage lower-cost providers while maintaining other activities in-house that truly drive competitive advantage," she says. “Entering into new financial arrangements to maximize the full potential of their entire portfolios through effective out-licensing or risk-sharing deals is also gaining significantly more momentum." In addition, companies are working to increase the ROI of their research investment dollars through acquiring new modalities, more effective portfolio management to kill products earlier, and establish new partnering models that increase the risk-sharing burden as a way to drive more innovation within early research. “These initiatives are all linked to our view that companies need to embrace a new R&D operating model that is designed on the formation of a number of strategic partnerships, which will serve as the critical means of adding capacity and managing the risk necessary to maintain pipeline flow," Ms. Cooper says. Glen de Vries, president of Medidata Solutions, says as discovery, development, and the target markets of new treatments reduce in size and become more specialized, life-sciences companies will need to reorganize their teams into smaller, more specific groups, as well as adopt dynamic business processes and the infrastructures to support them. “65 million years ago climate change eliminated an abundance of plant life and ended the reign of the large animals that fed on it, giving way to a world favoring smaller, more nimble species," he says. “Like the dinosaurs, the days of large pharma R&D budgets, and the often bureaucratic organizations that support them, are similarly numbered." According to experts at Deloitte, biopharma’s traditional operating model has not only performed poorly, it has added to the industry’s current problems as high fixed costs drag on earnings and revenue lost to patent expiration. Adapting to the current challenges requires a new type of R&D organization, one that has a different set of operational and cultural values. Traditional operating models have resulted in R&D organizations that are saddled with inflexible capacity and are unable to react to changing demand as corporate and R&D strategies shift from blockbusters to more targeted and specialized products. Roche has reorganized its R&D structure into preclinical research and early development (pRED and gRED) and late-stage development, Dr. Garaud says. “Within pRED, which I have the privilege to lead, the goal was to deepen our understanding of disease biology and the molecular basis of disease heterogeneity; deliver on individual patient needs by using biomarkers and personalized healthcare strategies; and fully leverage new technologies and capabilities to progress compounds into the portfolio," Dr. Garaud says. “We have made great progress since implementing the new organization and now use a diversity of approaches and therapeutic modalities. We are also continuing to expand our access to external innovation via translational research hubs in Singapore and Basel, Switzerland, as well as with key partnerships with universities and hospitals." In June 2009, Sanofi-Aventis announced plans to transform its research and development organization, says Paul Chew, M.D., senior VP, U.S. chief medical officer/chief scientific officer, at Sanofi-Aventis US. “The new R&D model is centered on the following priorities: a closer cooperation between Sanofi-Aventis researchers and external partners, for example, large public research institutes; a more flexible organization that fosters the emergence of innovation; and the creation of entrepreneurial, patient-centric research units focused on high priority areas, for example, oncology, diabetes, and aging, linked to public health needs," he says. Dr. Chew says Sanofi-Aventis aims to speed innovation by translating bench science to bedside clinical practice. “We have realigned our structure to recognize new mechanisms and bring them to patients in the most benefit-efficient and cost-efficient manner," he says. “Our goal with translational science is making discoveries in the lab, determining clinical applicability, and bringing them to the patient as quickly as possible. This includes increasing the identification of biomarkers that could serve as clinical endpoints." At Daiichi Sankyo, the research and development organization is structured to use talent across the globe to develop medications to meet unmet needs, says Glenn Gormley, M.D., Ph.D., chief science officer, co-head, research & development, Daiichi Sankyo, and global head of development, president, at Daiichi Sankyo Pharma Development (DSPD). “We collaborate with academic institutions and other enterprises so we can bring first-in-class medicines to market," Dr. Gormley says. “Our model of the global executive meeting of research and development (GEMRAD) brings together senior management from both R&D and commercial operations to identify the attributes of the product that are needed by the healthcare community." Dr. Gormley says the company’s organizational structure allows for nimble decision making. “By integrating research, marketing, and regional management into a centralized R&D decision-making body, we can quickly incorporate critical information and perspectives from across our company and foster strategic and timely decision-making to bring the best medicines to market as quickly as possible," he says. “We continuously seek strategic partnerships and collaborations with CROs to benefit all parties with key insights and new learnings." Deloitte executives say while organizations may be aware of the current challenges facing them, few have successfully identified and responded to the internal and external root causes that have spawned those challenges. While the full impact of changes associated with R&D transformation will take years to fully emerge, Deloitte experts say there are several benefits, including: • Improved organizational alignment and decision-making: Emphasis on improved visibility into demand and translation of expectations into actionable targets provides a consistent understanding across the organization. • Creating a sustainable pipeline flow: An increased focus on a sustainable and scalable pipeline improves quality and choice of products delivered through the pipeline. • Access to external science: Improved access to partners and external science provides a platform for sustaining innovation, access to expertise, and risk sharing. • Improved asset utilization: Simplified network structure reduces complexity and improves effective utilization of assets. Emphasis on a flexible cost structure allows for variability and effective reallocation of resources. Technology Solutions Industry experts say technology solutions can help address some of the R&D challenges facing companies today. “The R&D process is getting more expensive even while trials are taking longer and regulatory guidelines are tightening," says James DeSanti, CEO of PharmaVigilant. “Organizations want to get to their go/no-go decision phases quicker, but right now the opposite is true. A strategic technology investment is one of the quickest and most effective methods for addressing these issues. In the next five years, trials will become even more dispersed and globalized as emerging regions grow in popularity. As such, greater transparency will be required so regulatory agencies can ensure all protocols and guidelin s are being adhered to. With paper-based trials, transparency and access is near impossible. A true transition to automated processes is necessary for sponsors to stay ahead of regulatory shifts." There are massive operational inefficiencies in clinical development, and companies are looking to improve both processes and technology, says Todd Reul, director of clinical services at ClearTrial. “They are devising and setting clear organizational goals, centralizing their study planning functions, and incorporating new software and systems that enable integrated planning, forecasting, and project tracking across departments from both operational and financial perspectives," he says. Michael Naimoli, worldwide managing director at Microsoft Health and Life Sciences, says pharmaceutical companies are notorious for having disconnected silos of data trapped by various technologies that don’t talk to one another or in offices throughout the globe. “Scientific data must be readable, searchable, and usable across the entire organization to enable better scientific collaboration, more efficient scientific processes, and ultimately, drive faster discovery," he says. Mr. Naimoli says scientists and researchers are in need of innovative and easy-to-use technologies that will help them do their jobs better and faster; they can no longer afford to work with data stored in disparate systems that don’t talk to one another, for instance. “Globally distributed pharmaceutical companies or contract research organizations can use cloud-based services to build repositories of research tools and data for use by all dispersed branches of the organization, ensuring real-time collaboration and streamlined communication to help life-sciences organizations bring new drugs and therapies to market more quickly," he says. Many R&D organizations have invested in technologies such as EDC, IVR, ePRO, CTMS, data warehouses, and others but are not taking full advantage of these capabilities and are still doing things the old way, says Sheila Rocchio, VP of marketing at PHT. “Monitoring is a great example," she says. “Companies are still using paper sourcing and spending time doing the low-value task of 100% source verification. This needs to change. R&D organizations need to do a better job of analyzing the disparate data collected across the clinical development process to optimize resources and increase patient safety." Ms. Rocchio says companies are investing more in e-clinical systems and analytics, automating more tasks, adhering to industrywide data standards, and developing strategic outsourcing models to focus on core competency functions such as specific therapeutic area development and late-phase development, along with marketing and sales. Devin Gross, CEO of Emmi Solutions, says one growing trend is the use of interactive Web-based technology to improve the clinical trial process for all stakeholders: the pharma company, the investigator site, and especially the patient. “Clinical trials have always faced patient communication challenges with regard to patient retention and informed consent," he says. “Now emerging techniques enable organizations to deliver information-rich messages to keep trial participants informed and engaged. In the near future, these methods will become more accepted and more widespread." F PharmaVOICE welcomes comments about this article. E-mail us at [email protected] Michael Naimoli Microsoft “Research and development organizations are in need of innovative business practices that allow them to streamline their portfolio management processes." Todd Reul ClearTrial “To deal with operational inefficiencies, companies are looking to improve both processes and technology." Dr. Paul Chew Sanofi-Aventis US “Our goal with translational science is to make discoveries in the lab, determine clinical applicability, and bring them to the patient as quickly as possible." Attributes of a Transformed R&D Model 1. Networked: The increasing complexity of cost and value demands being placed on the R&D organization requires the traditional, company-constrained R&D model to give way to a networked approach, in which different players are integrated into virtual teams. Members of these teams require the ability to work not just across the organization, but in acquisitions, alliances, and partnerships that stretch across the industry and beyond. 2. Global: The diverse array of worldwide differentiation/value and pricing requirements placed on products demands a truly global R&D model, in which team members are able to bring together requirements from a variety of sources and geographies into uniquely defined R&D strategies. 3. Capable of providing bundled healthcare capabilities and services. Growing requirements for all healthcare consumers, e.g., patients, physicians, patient advocacy groups, and payers, require that the model focus on bundled healthcare capabilities and services. The R&D organization will need to expand its thinking away from a traditional “product plus information" model into a broader healthcare capability in which the emphasis is placed on overall patient outcomes in the context of the total clinical picture. 4. Transparent. The new model will be a transparent one, in which the R&D organization will require the ability to synthesize and react to the growing wealth of information that is becoming available on its own assets, services, and capabilities and those of companies throughout the industry, ultimately permitting more informed decisions to be made. Source: Accenture. For more information, visit accenture.com. Dr. Glenn Gormley Daiichi Sankyo “There are data that point to declining R&D productivity, and part of this is due to the complexity of the science." Sanjeev Wadhwa CSC “With internal pipelines drying up, companies are turning toward increased in-licensing and semantic drug discovery to bring innovative products into their portfolios." Tips for Adopting a New R&D Model As large pharmaceutical companies proceed to adopt new models, they must: n Address and align the divergent motivations of R&D and sales and marketing. Given the realities of the marketplace, this means that it will be the development arm that must change. Regardless of whether projects derive from start ups or from in-house benches, large pharmaceutical companies must take the lead in insisting that projects meet payer criteria. Thus, health economics and outcomes research (HEOR) approaches need to be integrated into the R&D effort from the outset. n Manage expectations. Addressing areas of real unmet need is expensive and risky. Thus, shareholders will need to be conditioned to the fact that R&D projects may have to take longer, cost more (in some cases to address smaller patient segments), and carry incremental risk. n Lay to rest, finally and definitively, the “not-invented-here" syndrome. If this is to happen, large pharmaceutical companies must foster greater flexibility and openness within their research units than have existed in the past. n Foster an entrepreneurial spirit among researchers. Typically, those who’ve wanted to work as entrepreneurs have gravitated to biotechnology firms, and those who felt more comfortable with the structure of a large, established organization stayed in large pharmaceutical companies. Entrepreneurial qualities will be equally valued in both types of firms. n Be open to new ways of working. This includes forming partnerships — sometimes with competitors — at earlier phases of development. Such an early collaboration is unprecedented between major players. Source: IMS Health. For more information, visit imshealth.com. Devin Gross Emmi Solutions “Emerging techniques enable organizations to deliver information-rich messages to keep trial participants informed and engaged." Glen de Vries Medidata Solutions “Like the dinosaurs, the days of large pharma R&D budgets, and the often-bureaucratic organizations that support them, are similarly numbered." Val Romberg CSL Behring “New therapies in development have to be better than what is already available. The bar for new therapies is getting higher and higher."
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