Innovative strategies to improve R&D ROI

Transcription

1 Innovative strategies to improve R&D ROI Ed Stelmakh, CPA, CMA Vice President and CFO Otsuka America Pharmaceutical, Inc. DISCLAIMER: The following presentation represents the opinions of the speaker and does not necessarily reflect the views of his employer or its affiliates.

2 Background Professional Experience: Pharma industry Currently Vice President and CFO, Otsuka America Pharmaceuticals Inc. Prior experience, 16 years in a variety of Domestic (New York Metro area) and International (Netherlands and Russia) roles. CRO industry 6 years as Vice President, Finance, Clinical Development and Commercialization Services 2

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5 Clinical Trials 101 Typically 50-75% of overall mid-large Pharma Co R&D spend 5

6 Phase IIb-III Critical Path Activities Study Start Up Protocol CRF Regulatory/Ethical Approvals Trials Documents Investigator Selection Site Assessment & Initiation Visits 15-20% of Cost ($) Monitoring and Data Compilation Patient Recruitment Site Monitoring Project/Site Management Data Entry Data Clean Up 50-60% of Cost ($) Data Analysis and Final Report Statistical Analysis Final Report Regulatory Submission 15-20% of Cost ($) 6

7 Innovative R&D strategies to improve ROI Risk Based and Remote Monitoring Creative Outsourcing Arrangements Improved ROI Informatics and Big Data Automation in Drug Development

8 Risk-Based Monitoring What is it? Approach pioneered by NYC Police department to drastically reduce crime rate by deploying resources to highest risk areas. Continuous evaluation of investigator sites and patient activities via sophisticated mathematical modeling as a way of identifying risks and adjusting monitoring (and other) efforts accordingly How does it improve ROI? Potentially reduces re-work on the back end of a clinical study Potentially reduces overall monitoring efforts, including SDV, RMV and missing pages Potential cost savings Depending on monitoring plan and investigator site profiles ~25% vs traditional Riskiness High, as cost of incorrect calculation and interpretation of signals could result in data issues at the end of the trial

9 Remote (centralized) Monitoring What is it? Strategic approach to centralizing some of the monitoring activities by introducing data capture and analysis as a way of reducing on-site monitoring efforts How does it improve ROI? Decrease in costs and time associated with traveling to investigator sites to conduct RMV Potential cost savings S curve savings trajectory, with potential to yield 20-25% savings vs traditional monitoring Riskiness Medium, if data and analytical capabilities are sound

10 Informatics and Big Data What is it? Application of sophisticated mathematical modeling and visualization to synthesize large quantities of data and convert it into easy-to-understand, actionable information How does it improve ROI? Enables game-changing modification in resourcing and oversight of a variety of clinical study activities due to predictive analytics and real-time evaluation of study activities Potential cost savings In the short term probably minimal due to offset of tactical activities by analytical ones. Most savings come from de-risking of clinical trials and elimination or significant reduction of re-work, as well as, faster overall trial delivery Riskiness Medium to High as success depends on cleanliness and completeness of data inputs, quality of analytics and ability to take actions to address real time issues

11 Case Study Example: Risk Based Monitoring TRADITIONAL MONITORING ALTERNATIVE MONITORING RISK BASED MONITORING On Site Monitoring Review of Data on Site 100% SDV Site visits every 4-6 weeks Central Data Review Targeted SDV Targeted visit scheduling Central Monitoring Data Review Site Management Site Training Triggers On Site visits per Triggers Analytics Potential for 25% total savings (vs traditional) through reductions in Source Data Verification (SDV), Routine Monitoring Visits (RMV), Missing Report Pages

12 Automation What is it? Use of technology to reduce manual efforts and error rates How does it improve ROI? Fewer hours needed to complete same tasks and less re-work due to errors Potential cost savings Depending on the baseline 50% and up are feasible Riskiness Low to Medium in most cases, but high dependency on technology implementation effectiveness, including ensuring process maturity prior to roll out of automated solutions

13 Refined Outsourcing Arrangements What is it? Continuous process improvement with service providers How does it improve ROI? Reduction in duplication of effort Pay-for-performance Risk sharing Potential cost savings Reduction in duplication of effort (usually functional oversight) 5-10% PFP and RS cost savings realized via de-risking certain elements of clinical trial execution Riskiness Low assuming strong governance model

14 Key Takeaways Industry will continue to see economic pressure to deliver R&D results in a more efficient fashion Technology and Data have the potential for disruptive changes that will reverse historical R&D trends We are in the middle of a significant innovation cycle, which carry potential risks, as well as, benefits for the industry Understanding key success factors and flawless execution are critical to minimizing risks and maximizing returns Finance needs to understand the WHAT and the HOW in order to be able to effectively partner with key stakeholders due to increased complexity and sophistication of R&D space