Clinical Supply Chain Management. Technologies such as IVRS, CTMS, EDC and RFID Enhance Drug Supply Management

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Clinical Supply Chain Management

Technologies such as IVRS, CTMS, EDC and RFID Enhance Drug Supply

Management

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GBI Research Report Guidance

GBI Research Report Guidance

The report focuses on the current state of clinical supply chain management in the pharmaceutical industry. It provides details of various models which are currently followed in the industry. The report also includes analysis of various case studies in order to identify the best practices in the industry.

 Chapter three provides an overall picture of global clinical supply chain management. This section describes the evolution of clinical supply chain management.

 Chapter four provides industry analysis, with emphasis on the factors which are deciding the future of clinical supply chain management. .

 Chapter five provides an in-depth analysis of drivers and barriers for the clinical supply chain management industry.

 Chapter six provides an in-depth analysis of components of clinical supply chain management such as labeling, packaging, distribution and destruction of Clinical Trial Materials (CTMs).

 Chapter seven analyzes the CROs and how they are changing the clinical supply management scenario.  Chapter eight provides a detailed understanding of factors which can lead to effective and efficient

clinical supply chain management.

 Chapter nine assesses the technological aspects which are involved in clinical supply chain management.

 Chapter ten examines some of the regulations followed by different countries for clinical supply chain management.

 Chapter eleven details the profiles of key companies involved in clinical supply chain management and their strategic scenarios.

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Executive Summary

Executive Summary

The Number of Clinical Trials Conducted in Emerging Countries is Increasing due to Cost Advantages

Clinical trial sites are selected based on patient availability, the cost of conducting clinical trials, and regulatory complications. The difference in the location of sites has led to the increased emphasis of pharmaceutical companies on efficient Clinical Supply Chain Management (CSCM).There has been a shift in conducting clinical trials from developed countries to emerging markets in Asia, Latin America and Eastern Europe. This has been due to increasing drug development timelines, rising costs and declining productivity, combined with the strategic advantages offered by these emerging markets. The number of registered clinical trials in the US declined from XX% in 2002 to around XX% in 2010. In 2010, the total number of clinical trials registered indicates that XX% of clinical trials were conducted in the US, followed by Europe where XX% of clinical trials have been conducted. East Asia accounted for XX% of all trials, followed by Canada, the Middle East, South America and India, with XX%, XX%, XX% and XX%, respectively

Outsourcing to Site Management Organizations Leads to Reduction in Study Timelines

SMOs are required to act in accordance with stringent regulations and guidelines set by laws, exemplifying Good Clinical Practice (GCP). Because SMOs work closely with sites that they manage and support, they should have an intimate knowledge of the strengths and weaknesses of the clinical trial process within each site, and be well placed to make thorough assessments of their suitability for a particular study.

Clinical Supply Chain Management, Key Factors Responsible for Study Timeline Reduction by SMOs, 2011

Effective patient recruitment

Factors Responsible for Reduction in Study Timelines

by SMO

Effective communication

Site specific support and guidance Increased patient retention

Improved pre-study planning and feasibility

Partnership with investigators

Timely ethics committee management

Source: GBI Research, Pharma Focus Asia (2010) SMO: Site Management Organizations

SMOs are able to reduce clinical trial study timelines by implementing various processes, such as effective patient recruitment and communication, increased patient retention, and so on. Pre-study planning and feasibility will be improved because SMOs are committed to the proper functioning of the clinical trial site. Sponsors are effective in SMOs, leading to an increase in patient retention and faith of patients in the trial. The ethics committee ensures that ethical issues associated with the clinical trial are dealt with by local policies. Patient recruitment performed by SMOs is more effective because they recruit patients by database searches and during a patient’s visit to their healthcare provider (doctor). The complete process of the clinical trial becomes more efficient when effective patient recruitment is carried out.

The number of registered clinical trials in the US declined from XX% in 2002 to around XX% in 2010

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Table of Contents

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Table of Contents

1 Table of Contents... 5

1.1 List of Tables... 8

1.2 List of Figures... 8

2 Clinical Supply Chain Management - Introduction... 9

3 Clinical Supply Chain Management - Overview...10

3.1 Overview of Clinical Supply Chains ...10

3.1.1 Evolution of Clinical Supply Chains ...12

4 Clinical Supply Chain Management - Industry Analysis ...13

4.1 Capital Requirement ...13

4.2 Skilled Workforce...14

4.3 Competition Among Existing Players ...14

5 Clinical Supply Chain Management - Drivers and Restraints...15

5.1 Drivers...15

5.1.1 Increasing Concern for Pharmaceutical Companies to Improve R&D Outcomes ...15

5.1.2 Geographic Expansion for Conducting Clinical Trials...15

5.2 Restraints ...16

5.2.1 Complex Regulatory System ...16

5.2.2 High Cost Involved for Entering the Market and Maintaining Processes ...16

5.2.3 Proper Visibility of Products in the Supply Chain (Inventory Visibility and Traceability)...16

6 Clinical Supply Chain Management - Components of the Clinical Supply Chain...17

6.1 Labeling...17

6.2 Packaging ...18

6.2.1 Blister Packaging...18

6.2.2 Plastic Bottles ...19

6.2.3 Labels and Accessories ...19

6.2.4 Pouches and Strip Packs ...19

6.2.5 Caps and Closures ...19

6.2.6 Secondary Containers...19

6.2.7 Others ...19

6.3 Logistics...20

6.3.1 Focus Areas for Logistics...21

6.4 Distribution Models ...22 6.4.1 Outsource ...23 6.4.2 Build ...23 6.4.3 Acquisition...23 6.4.4 Direct Shipping...24 6.4.5 Co-Development ...24 6.5 Inventory Management ...24

6.6 Destruction and Disposal of Waste...25

6.6.1 Recording of Destruction ...25

6.6.2 Methods of Destruction...25

7 Clinical Supply Chain Management - CROs Operate in Clinical Trial Supplies ...26

7.1 Key Reasons for Outsourcing of Clinical Trials and Research Processes ...26

7.1.1 Different Strategies Adopted by Pharmaceutical Companies to Increase Efficiency...27

7.1.2 Increase in the R&D Costs Against Revenue Growth is a Reason for Outsourcing Clinical Trials to CROs...27

7.1.3 Increasing Drug Failure Rates a Concern for Pharmaceutical Companies...28

7.1.4 Outsourcing Clinical Trials to CROs in Order to Decrease the Time Required for Launching the Product in the Market ...28

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Table of Contents

7.1.6 Minimization of Development Risks Through Risk Sharing with CROs is One of the Key

Reasons for Outsourcing...30

7.1.7 CROs Can Effectively Manage the Trends in Regulations Governing Clinical Trials...31

7.2 Factors Leading to CSMO Growth...31

8 Clinical Supply Chain Management - Key Challenges for Effective and Efficient Supply Chain Management...32

8.1 Key Factors for Efficient Supply Chain Management in Clinical Trials ...32

8.1.1 Planning Issues ...32

8.1.2 Manufacturing Issues...32

8.1.3 Distribution Issues...33

8.1.4 Visibility Issues ...33

8.1.5 Technical Integration with the Vendors...33

9 Clinical Supply Chain Management - Technological Landscape ...34

9.1 Information Technology in R&D ...34

9.1.1 Data Management...35

9.1.2 Clinical Data Management System ...35

9.1.3 Clinical Data Management Outsourcing...36

9.1.4 Deals in Clinical Trial Data Management Outsourcing ...36

9.2 IVRS/IWRS ...37

9.2.1 IVRS Provides Real-Time Clinical Trials Data Tracking for the Following...38

9.2.2 Case Study ...40

9.3 Clinical Data Management Systems (CDMS)/Clinical Trial Management Systems (CTMS) ...41

9.4 Electronic Data Capture (EDC) ...42

9.5 Clinical Trial Management System (CTMS) ...42

9.6 Radio Frequency Identification (RFID)...43

10 Clinical Supply Chain Management - Regulatory Landscape...44

10.1 The US...44

10.1.1 Important Regulations by the FDA in Proposal ...44

10.1.2 FDA Motivating CROs to Use Adaptive Design in Drug Development ...44

10.2 Europe...45

10.2.1 The New Pharmacovigilance Legislation ...46

10.2.2 Reasons for Passing the New Legislation...46

10.3 Emerging Markets...46

10.4 India...47

10.4.1 Potential Advantages of the Indian CRO Market...47

10.5 China...48

10.5.1 Potential Advantages of the Chinese CRO Market ...48

11 Clinical Supply Chain Management - Profiles of Key Players and Key Deals...50

11.1 Profiles of Key Companies in Clinical Supply Chain Management...50

11.1.1 Medidata...50

11.1.2 Catalent...50

11.1.3 Myoderm...50

11.1.4 Cold Chain Technologies...50

11.1.5 Numoda Corporation...50

11.1.6 Fisher Clinical Services...51

11.1.7 Marken...51

11.1.8 Phase Forward ...51

11.1.9 Bilcare Global Clinical Supplies...51

11.1.10 Almac Clinical Services...51

11.1.11 BioClinica...52

11.1.12 Aptuit ...52

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Table of Contents

11.2 Key Deals among Clinical Supply Management Companies...53

11.2.1 Medidata Solutions Acquired Clinical Force in July 2011 ...53

11.2.2 Catalent Acquires Clinical Trial Supplies Division of Aptuit LLC in February 2012...53

11.2.3 Ion Beam Applications (IBA) and Bayer Schering Pharma Sign a Deal in 2010...53

12 Clinical Supply Chain Management - Appendix...54

12.1 Market Definitions...54 12.2 Abbreviations ...54 12.3 Bibliography ...55 12.4 Research Methodology ...56 12.4.1 Coverage ...56 12.4.2 Secondary Research ...56 12.4.3 Primary Research ...57

12.4.4 Expert Panel Validation ...57

12.5 Contact Us...57

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Table of Contents

1.1

List of Tables

Table 1: Clinical Supply Chain Management, Clinical Trials in Different Geographies, %, 2012 ...11

Table 2: Clinical Supply Chain Management, R&D Expenditure Versus Turnover for the Top Ten Pharmaceutical Companies, 2011...28

1.2

List of Figures

Figure 1: Clinical Supply Chain Management, Investigational Medicinal Products (IMP) Path, 2012 ...10

Figure 2: Clinical Supply Chain Management, Clinical Trials in Different Geographies, %, 2012 ...11

Figure 3: Clinical Supply Chain Management, Illustrative Supply Chain for Clinical Trial Materials, 2012...12

Figure 4: Clinical Supply Chain Management, Capital Requirement, Stages, 2012...13

Figure 5: Clinical Supply Chain Management, Advantages of Geographic Expansion of Clinical Trials, 2012 ...15

Figure 6: Clinical Supply Chain Management, Types of Clinical Trial Material Packaging, 2012...18

Figure 7: Clinical Supply Chain Management, Key Stages in Distribution of Clinical Trial Material, 2012 ...20

Figure 8: Clinical Supply Chain Management, Key Focus Areas for Logistics, 2012 ...21

Figure 9: Clinical Supply Chain Management, Distribution Models, 2012...22

Figure 10: Clinical Supply Chain Management, Segments of Distribution Model, 2012 ...23

Figure 11: Clinical Supply Chain Management, Inventory Management Stages, 2012...24

Figure 12: Clinical Supply Chain Management, Factors Resulting in Efficient Supply Chain, 2012 ...26

Figure 13: Clinical Supply Chain Management, R&D Expenditure Versus Turnover for the Top Ten Pharmaceutical Companies, 2011...27

Figure 14: Clinical Supply Chain Management, Key Factors Responsible for Study Timeline Reduction by SMOs, 2011 ...29

Figure 15: Clinical Supply Chain Management, Site Initiation Process, 2011...30

Figure 16: Clinical Supply Chain Management, Technologies Used for Forecasting, 2012...34

Figure 17: Clinical Supply Chain Management, Clinical Data Management System Flow, Global, 2012 ...35

Figure 18: Clinical Supply Chain Management, Use of IVRS in the Shipment Request Process for Inventory Management, 2011...38

Figure 19: Clinical Supply Chain Management, Cost Saved by Using IVRS - Reduction in Averages, 2011....40

Figure 20: Clinical Supply Chain Management, Cost of Over-Recruitment by 10% in Different Study Samples, 2011 ...41

Figure 21: Clinical Supply Chain Management, A Typical Clinical Trial Management System, 2011...43

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Clinical Supply Chain Management – Introduction

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Clinical Supply Chain Management - Introduction

There has been a shift in conducting clinical trials from developed countries to emerging markets in Asia, Latin America and Eastern Europe. This has been due to increasing drug development timelines, rising costs and declining productivity, combined with the strategic advantages offered by these emerging markets. Clinical Supply Chain Management (CSCM) is vital to conducting clinical trials. The companies need to have proper CSCM in place due to three important reasons, drug intricacy used in clinical trials, geography expansion and increased focus of companies on Research and Development (R&D). Accurate and timely delivery of clinical trial material to the clinical trial site is critical for the success of a clinical trial. The chances of meeting the research milestones increases by considering clinical supplies processes from the planning stage of the clinical trials.

The clinical trial is an important process for deciding the future of a drug candidate. According to the Institute of Clinical Research (ICR), two-thirds of the overall cost of R&D is spent on drug development. Although there are many advantages of tracking clinical trial products, it is very difficult to have an efficient process in place to track the inventory. Use of new technologies can make tracking more efficient and effective. Leading pharmaceutical companies are involving outsourcing companies, such as Contract Research Organizations (CROs), these companies have a dedicated department that leverages information technology (IT) to rejuvenate their business model, particularly R&D, making it more agile, leaner and global. Information technology provides significant potential to make this happen through various services, which include globally integrated data management, paperless clinical trials and many others.

Geographic expansion, complexity of drugs, and increased attention of pharmaceutical companies on efficient R&D are the three main reasons for having proper CSCM in place

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Clinical Supply Chain Management – Technological Landscape

9.2.2

Case Study

9.2.2.1 Use of IVRS Leads to Reduction in Average Medication Cost

The average cost of clinical supplies to a subject is $XX. This value may vary depending upon the therapeutic segment and duration of the clinical trial. It has been observed that the use of IVRS reduces the average by XX-XX%. This means that the extra amount of drug in the inventory is reduced, and this leads to significant cost reduction. If a sample size of XX subjects is taken into consideration, then a cost saving of $XX can be made. Apart from the cost saving due to the implementation of IVRS, there are benefits such as automated generation of consignment requests and increased efficiency of the logistics system.

Figure 19: Clinical Supply Chain Management, Cost Saved by Using IVRS - Reduction in Averages, 2011 100 200 300 400 500 600 700 800 Sample Size C o s t o f S a v in g s ( $ ) $ XX are saved in a sample of XX subjects

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Clinical Supply Chain Management – Appendix

12 Clinical Supply Chain Management - Appendix

12.1

Market Definitions

 The global clinical supply chain management companies comprise organizations involved in labeling, packaging, warehousing, distribution and destruction of CTMs and IMPs.

12.2

Abbreviations

3PL - Third Party Logistics

ADME - Absorption, Distribution, Metabolism, and Excretion ADR - Adverse Drug Reaction

CDISC - Clinical Data Interchange Standards Consortium CDMS - Clinical Data Management System

CIT - Corporate Income Tax

CRA - Clinical Research Associate

CRO - Contract Research Organizations

CSCM - Clinical Supply Chain Management CTM - Clinical Trial Materials

CTMS - Clinical Trial Management System DEA - Drug Enforcement Association

DGCI - Drugs Controller General of India DHS - Department of Homeland Security

eCRF - electronic Case Report Form EDC - Electronic Data Capture

EMA - European Medicines Agency

ePRO - electronic Patient Reported Outcomes EU - European Union

FDA - Food and Drug Administration

GCP- Good Clinical Practice

GMP- Good Manufacturing Practice

HNTE - High and New Technology Enterprises ICR - Institute of Clinical Research

IMPs - Investigational Medicinal Products IP - Investigational Product

IPR - Intellectual Property Rights

IT - Information Technology

IVRS - Interactive Voice Response System IWRS - Interactive Web Response System MHLW - Ministry of Health, Labor and Welfare

NICPBP - National Institute for the Control of Pharmaceutical and Biological Products NMITLI - New Millennium Indian Technology Leadership Initiative

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Clinical Supply Chain Management – Appendix

OHRP - Office of Human Resource Protection OTC - Over the Counter

PASS - Post-Approval Safety Study PET - Polyethylene Terephthalate

PI - Principal Investigator

PIM - Product Information Management

R&D - Research and Development RFID - Radio Frequency Identification SEZ - Special Economic Zone

SFDA - State Food and Drug Administration SMO - Site Management Organizations SPL - Structured Product Labeling

TCS - Tata Consultancy Services

12.3

Bibliography

 Abbott Laboratories (2011), Annual Report. Available from http://media.corporate-ir.net/media_files/irol/94/94004/Proxy_Page/AR2011.pdf. [Accessed January 16, 2012]  AstraZeneca Plc (2011), Annual Report. Available from

http://www.astrazeneca-annualreports.com/2011/documents/pdfs/annual_report_pdf_entire.pdf. [Accessed January 16, 2012]  Bristol-Myers Squibb (2011),Annual Report. Available from

http://investor.bms.com/phoenix.zhtml?c=106664&p=irol-reportsAnnual. [Accessed January 19, 2012]  ClinicalTrials.gov, Map of All Studies in ClinicalTrials.gov, Available from

http://clinicaltrials.gov/ct2/search/map, [Accessed January 20, 2012]  DHL (2012), The Pulse DHL Life Sciences & Healthcare, Available from

http://www.dhl.com/content/dam/downloads/g0/logistics/dhl_thepulse_spring2012_online.pdf, [Accessed February 04, 2012]

 Drapkin (2010), Pharma Focus Asia (2010), Site Management Organisations in Asian Clinical Trials, Available from http://www.pharmafocusasia.com/clinical_trials/site_management_clinicaltrials.htm, [Accessed February 04, 2012]

 Eli Lilly and Company (2011), Annual Report. Available from

http://files.shareholder.com/downloads/LLY/1918723280x0x548541/E8FFDA89-5EC1-4D08-AB37-CD85F4C0863D/English.PDF. [Accessed January 23, 2012]

 Futcher Alexa, Qualitative and quantitative benefits of IVR and IWR in clinical trials Available from www.perceptive.com/index.php/download_file/view/84/62/ [Accessed January 23, 2012]  GlaxoSmithKline plc (2011), Annual Report. Available from

http://www.gsk.com/investors/reps11/GSK-Annual-Report-2011.pdf. [Accessed January 25, 2012]  Johnson & Johnson (2011), Annual Report. Available from

http://files.shareholder.com/downloads/JNJ/1360831491x0x552947/211DF99C-D473-47DA-B3AF-8EE1A05361D6/2011-Annual-Report_Final.pdf. [Accessed January 26, 2012]

 Lamberti, Mary Jo et al. (2012), Trends and Novel Approaches to Clinical Supply Outsourcing, Available from http://www.contractpharma.com/issues/2012-01/view_features/trends-and-novel-approaches-to-clinical-supply-outsourcing/ [Accessed January 30, 2012]

 Merck & Co., Inc. (2011), Annual Report. Available from

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Clinical Supply Chain Management – Appendix

 Novartis AG (2011), Annual Report. Available from

http://www.novartis.com/downloads/investors/reports/novartis-annual-report-2011-en.pdf. [Accessed February 01, 2012]

 Pfizer Inc. (2011), Annual Report. Available from

http://www.pfizer.com/files/annualreport/2011/financial/financial2011.pdf. [Accessed February 02, 2012]

12.4

Research Methodology

GBI Research’s dedicated research and analysis teams consist of experienced professionals with a pedigree in marketing, market research, consulting backgrounds in the pharma industry, and advanced statistical expertise.

GBI Research adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and the Strategic and Competitive Intelligence Professionals (www.scip.org).

All GBI Research databases are continuously updated and revised. The following research methodology is followed for all databases and reports:

12.4.1 Coverage

The objective of updating GBI Research coverage is to ensure that it represents the most up to date vision of the industry possible.

Changes to the industry taxonomy are built on the basis of extensive research of company, association and competitor sources.

Company coverage is based on three key factors: market capitalization, revenues, and media attention/innovation/market potential.

GBI Research aims to cover all major news events and deals in the pharmaceutical industry, updated on a daily basis.

 An exhaustive search of 56 member exchanges is conducted, and companies are prioritized on the basis of their market capitalization;

 The estimated revenues of all major companies, including private and governmental, are gathered and used to prioritize coverage; and,

 Companies which are making the news, or which are of particular interest due to their innovative approach, are prioritized.

GBI Research aims to cover all major news events and deals in the medical industry, with its databases updated on a daily basis.

The coverage is further streamlined and strengthened with additional inputs from GBI Research’s expert panel (see below).

12.4.2 Secondary Research

Secondary research was carried out on internal and external sources to source qualitative and quantitative information in the report.

The secondary research sources that are referred in this report include, but are not limited to:

 Company websites, annual reports, financial reports, investor presentations and SEC filings for the twenty companies covered in this report.

 Industry trade journals, scientific journals and other technical literature.  Relevant patent and regulatory databases.

 National government documents, statistical databases and market reports.

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Clinical Supply Chain Management – Appendix

12.4.3 Primary Research

GBI Research conducts hundreds of primary interviews a year with industry participants and commentators in order to validate its data and analysis. A typical research interview fulfills the following functions:  It provides first-hand information on the market size, market trends, growth trends, the competitive

landscape and future outlook.

 Helps in validating and strengthening the secondary research findings.  Further develops the analysis team’s expertise and market understanding.

Primary research involves e-mail correspondence, telephone interviews and face-to-face interviews for each market, category, segment and sub-segment across geographies.

The participants who typically take part in such a process include, but are not limited to:

 Industry participants: CEOs, VPs, marketing/product managers, market intelligence managers and national sales managers;

 Hospital stores, laboratories, pharmacies, distributors and paramedics;

 Outside experts: investment bankers, valuation experts, research analysts specializing in specific medical equipment markets; and

Key Opinion Leaders (KOLs): physicians and surgeons specializing in different therapeutic areas corresponding to different kinds of pharmaceutical drugs.

12.4.4 Expert Panel Validation

GBI Research uses a panel of experts to cross verify its databases and forecasts.

GBI Research’s expert panel comprises marketing managers, product specialists, international sales managers from medical device companies; academics from research universities, KOLs from hospitals, consultants from venture capital funds and distributors/suppliers of medical equipment and supplies. Historic data and forecasts are relayed to GBI Research’s Expert Panel for feedback and adjusted in accordance with their feedback.

12.6

Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means; electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, GBI Research.

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References