Leveraging Service Management to Improve Clinical Development Operations

• Cognizant 20-20 Insights Leveraging Service Management to Improve Clinical Development Operations Executive Summary which increases complexity even further. Most pharma R&D units are not set up in a way to take The challenges within the R&D function of phar- full advantage of these new ways of operating maceutical companies are well understood. The and thus struggle to find one-off approaches and total cost for developing a new drug exceeds $1 solutions to the challenges they face. billion due to the stringent requirements for large clinical trials. At the same time, the pipeline for There is general agreement that the pharma R&D new “blockbusters” (defined as drugs with market model has to be completely reinvented to suc- potential of more than $1 billion in annual sales) cessfully address these challenges, adjust to the targeting the general population has pretty much industry’s new realities and continue to produce dried up, and pharmaceutical companies are new products efficiently and cost-effectively. increasingly developing drugs that address the To improve R&D “yield” in generating high- needs of specific smaller populations, a trend value, patient-centered and regulatory-approved called personalized medicine. treatments, R&D organizations must find a way to more quickly and effectively move from data to The impact on R&D departments has been decisions by focusing on activities such as: staggering: Not only do they have to find ways to do more with less, but at the same time, they also • Adopting predictive capabilities through have to become much more flexible, conducting adaptive trials, signal detection or predictive research on larger numbers of specialty clinical trial planning. compounds. They also have to operate in a much more connected environment, wherein they col- • Providing data and insights at the point laborate with other companies, usually smaller of need through R&D mobility solutions, biotech firms, university research centers, etc., adaptive monitoring or portals. to discover and develop these compounds. • Bringing market insights to R&D more consistently through market-aligned R&D and While in the past clinical development was clinical trial feasibility. primarily performed in-house, leading pharma companies now rely on a host of external vendors, In sum, the pressure on R&D organizations to such as clinical research organizations (CROs), deliver break-though molecules has never been global services companies and other develop- greater. As a result, they must become much more ment partners. The decision to source particular efficient; open; standardized; innovative; continu- activities is usually made on a trial-by-trial basis, ously improving; and flexible and adaptive. cognizant 20-20 insights | november 2011 With these objectives in mind, R&D organizations The service provider can be internal — typically have been asking difficult questions, such as: another group within the same company — or external to the company. With an internal • How will I be able to effectively serve the provider, the company must decide whether the different therapeutic units that rely on my customer will pay for the services, typically in services? the form of a cost chargeback. In the case of an • What activities should I keep in-house vs. external provider, the customer will, of course, outsource? On the basis of what criteria will I pay for the services provided. Providing services make these decisions? through a service management model requires the establishment of service agreements, which Do I have to continue investing in new technol- • are contracts stipulating to a great level of detail ogies, or is it more cost-effective to leverage the expectations from both the customer and external providers, for example, through cloud service provider of the other party. computing? • What operating model will I put in place for The use of service management originated in the activities I keep in-house to achieve my the information technology (IT) space, with the objectives? objective of enabling better strategic alignment between the business and IT departments. ITIL How will I ensure that the vendors I employ • (Information Technology Infrastructure Library) are successfully aligned with the business has been used by IT organizations as a best-prac- objectives I have to meet? tices framework for IT service management, and This white paper explores the concept of it has grown to become the most widely accepted service management and how it can be applied approach to IT service management in the world. not only as a framework to answer these key The ITIL framework and its best practices can questions but also to inform the development provide significant value for the implementation of a new operating model that improves clinical of service management operating models. development operations of large pharmaceutical companies. We will touch on what service Based on our experience, we believe that the management entails, its benefits and how it can service management concepts described by ITIL be applied to clinical development. We will also can be applied very well to the world of pharma- introduce a framework describing two options for ceutical clinical development, which we will dem- how to introduce service management, as well onstrate with two case studies detailed at the end as provide guidelines for how to choose between of this white paper. The reasons that a service these two options. model can be applied so well to clinical development include: Further, we will suggest some elements that we view as critical success factors for how to • The customer-provider relationships that implement this new model. Finally, we will provide have emerged in many pharmaceutical compa- two case studies of bio-pharmaceutical companies nies, with the therapeutic areas as customers, that recently have adopted this model, each to be serviced by the clinical organization as choosing different paths to do so. their key provider for clinical trials execution. • The integration of IT capabilities into clini- Service Management: cal development business processes to Definition & Benefits enable enhanced electronic data capture Service management is the practice of transfer- (EDC), data analysis, trial management and ring day-to-day management responsibility of monitoring, etc. operations to an internal or external provider as The increasing use of external vendors, a strategic method for improving effectiveness • which highlights the need for trial and efficiency. The organization that has direct sponsors to think and act in a service responsibility for defining and agreeing to service management mode when they set up con- level targets for the services rendered is referred tractual agreements with these vendors. to as the customer. The organization that accepts service level targets and meets requirements to There are significant benefits that the use of a provide service at the negotiated level is regarded service management model can bring to a clinical as the service provider. cognizant 20-20 insights 2 development organization. The main benefits • Increased focus on business outcomes: By include the following: documenting services in terminology familiar to the business, and by describing their value • Improved communications with customers: and benefits in a language easily understood Introducing a service management model by customers, the provider shifts the focus requires the service provider to work with its from functionality, to business outcomes. customer(s) in terms of understanding their needs and requirements and corresponding • Streamlining service activities: Through the service levels. This generates more frequent, activity of services definition and the service streamlined and effective conversations, in supply chain (i.e., how the services will be ful- which both the customer and service provider filled), the service provider typically identifies start using the same language and increase elements that are common across services, their alignment. which in turn enables the provider to gener- ate efficiencies and lower costs by eliminating • More clarity around roles and responsibili- duplication. ties: The service model requires the customer and service provider to clearly articulate expec- • Setting the stage for continuous improve- tations and roles and responsibilities in order ment: Putting in place a service model is for the services to be provided, consumed not an endpoint but rather a starting point for customers and providers to continuously and supported in an effective and efficient fashion. This, in turn, leads to better and more work on improving their services, such as the meaningful interactions, in which both parties way they are introduced and the way they operate in a more collaborative manner. are delivered to the customer. Continuous improvement usually includes identifying and • Better marketing of services to customers: eliminating gaps and overlaps in services. Services are introduced to customers through a service catalog, which lists available ser- Service Management Framework for vices and their key features. Generating and Clinical Development maintaining the service catalog drives service Based on our experience, we have developed a providers to better articulate and define the framework that shows two key options for clinical services to be offered, using phrasing that res- development organizations that want to adopt a onates well with customers. service management model (see Figure

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