Manageing Integrated Development in the Pharmaceutical Industry ...

Managing Integrated Development in the Pharmaceutical Industry:

A Cross-Functional Approach to Development of More

Efficient Manufacturing Processes

D I S S E R T A T I O N

of the University of St. Gallen,

School of Management,

Economics, Law, Social Sciences

and International Affairs

to obtain the title of

Doctor of Philosophy in Management

submitted by

Reto Marc Ziegler

from

Basel

Approved on the application of

Prof. Dr. Thomas Friedli

and

Prof. Dr. Urs Fueglistaller

Dissertation no. 4254

Digitaldruckhaus GmbH, Konstanz 2014

The University of St. Gallen, School of Management, Economics, Law, Social Sciences

and International Affairs hereby consents to the printing of the present dissertation,

without hereby expressing any opinion on the views herein expressed.

St. Gallen, October 21, 2013

The President:

Prof. Dr. Thomas Bieger

For Cristina.

Acknowledgement

This dissertation is the final result of over four years at the Institute of Technology

Management of the University of St.Gallen. During that time I had the chance to be

involved in various interesting research and consulting projects and I had the opportunity

to function as teaching assistant of two lectures. All this was an extraordinary experience.

It was all enabled by my supervisor Prof. Dr. Thomas Friedli, who provided guidance

and support when needed but allowed to work independently whenever wanted. I very

much appreciate his mentorship and all his professional and scientific advices. Also, I

thank Prof. Dr. Urs Fueglistaller for his interest in my research and for agreeing to act as

co-supervisor.

Furthermore, I enjoyed the pleasant environment at the Institute of Technology

Management. I had numerous creative and productive discussions with the whole team.

Special thanks go to Andreas Mundt, with whom I worked on different projects and

seminars, and Matthias Götzfried.

I thank my family for the outstanding support and encouragement during my studies and

especially my time in St.Gallen. Special thanks go to my father Dr. René Ziegler for his

critical reading of this dissertation.

Finally, I thank my love, Cristina, for all her patience, endurance, support, and constant

motivation. Without her, this dissertation wouldn’t have come to an end.

Summary

Current figures from the pharmaceutical industry show a clear trend towards ever rising

costs and duration of new product development. In parallel, fewer product candidates get

through clinical development. This can be summarized simply as an R&D productivity

crisis. The result is increasing time and cost pressure and results in fewer resources being

allocated for the development of manufacturing processes. As soon as efficacy and safety

studies are accepted by regulatory agencies, commercial production starts with whatever

production process had been used during development. Delays right before launch have a

direct effect on the remaining time the product is protected by patents and thus on high

margin sales.

As a result it can be observed that many newly introduced products are produced by

highly inefficient manufacturing processes. Poor processes lead to excessive

manufacturing costs which could easily be avoided by changes in the development

process.

In the past it was shown in other industries (e.g. electronics and machinery) that the

problem mentioned above was solved to a great extent by using an approach called

integrated development. Basically this means involving production early during

development in order to ensure that processes can be transferred to commercial

production very smoothly and ideally without any adaptations.

In this dissertation it is shown how to adapt an integrated development approach to the

pharmaceutical industry. The result is a process model surrounded by a framework that

extends the scientific knowledge about integrated development and is at the same time

applicable in practice.

Zusammenfassung

Aktuelle Zahlen aus der pharmazeutischen Industrie zeigen, dass die Entwicklung von

neuen Produkten immer länger dauert und immer mehr kostet. Zudem schaffen immer

weniger Produkte die Hürde der klinischen Entwicklung. Man spricht schon fast von

einem Produktivitätsproblem der Forschung und Entwicklung. Dieser Zeit- und

Kostendruck führt dazu, dass immer weniger Ressourcen für die Entwicklung der

Produktionsprozesse aufgewendet werden. Produkte werden, sobald die

Regulierungsbehörden die Verträglichkeit und die Wirksamkeit anerkennen und sie

zulassen, direkt produziert. Jede Verzögerung vor dem Produktionsstart (Launch)

bedeutet eine kürzere Zeit, in der das Produkt durch den Patentschutz geschützt ist.

Als Folge kann beobachtet werden, dass viele neu eingeführte Produkte äusserst

ineffizient produziert werden. Die Herstellkosten sind deutlich überhöht. Dadurch

entstehen unnötige Kosten, die mit einigen Anpassungen im Entwicklungsprozess

vermieden werden können.

In verschiedenen Industrien (bspw. Elektronik- und Maschinen-Industrie) wurde in der

Vergangenheit gezeigt, dass mittels eines integrierten Entwicklungsprozesses das

geschilderte Problem verringert werden kann. Dadurch wird bereits während der

Entwicklung durch den Einbezug der Produktion sichergestellt, dass die

Produktionsprozesse ohne Anpassungen im kommerziellen Massstab umsetzbar sind.

In der vorliegenden Dissertation wird beschrieben, wie das Konzept der integrierten

Entwicklung auf die pharmazeutische Industrie angewendet werden soll. Das Ergebnis ist

ein Modell, das die Wissenschaft erweitert und gleichzeitig auch in der Praxis anwendbar

ist.

Table of Contents

Table of Contents .............................................................................................................. XI

List of Figures ................................................................................................................. XV

List of Tables.................................................................................................................. XIX

List of Abbreviations ..................................................................................................... XXI

1 Introduction .................................................................................................................... 1

1.1 Motivation ................................................................................................................... 1

1.2 Practical Relevance ..................................................................................................... 2

1.3 Terms and Definitions ................................................................................................ 6

1.3.1 The Pharmaceutical Industry ................................................................................... 6

1.3.2 The Launch Site ....................................................................................................... 7

1.3.3 The Pharmaceutical Development Process .............................................................. 8

Excursus: Quality by Design – A Recent FDA Initiative ................................................. 10

1.4 Research Goal and Question ..................................................................................... 14

1.5 Research Design ....................................................................................................... 15

1.5.1 Research Concept .................................................................................................. 15

1.5.2 Research theory ..................................................................................................... 17

1.5.3 Structure ................................................................................................................. 19

2 Theoretical Foundation ................................................................................................ 23

2.1 From New Product Development… ......................................................................... 23

2.2 …To Integrated Product Development ..................................................................... 25

2.3 Concurrent Engineering ............................................................................................ 27

2.4 Cross-Functional Teams ........................................................................................... 28

2.5 Success Factors in Product Development ................................................................. 30

2.6 Insights and Theoretical Deficits .............................................................................. 32

XII Table of Contents

3 Development of a Reference Framework .................................................................... 35

3.1 The Framework in General ....................................................................................... 35

3.2 Components in Detail ............................................................................................... 36

3.2.1 Concurrent Engineering ......................................................................................... 36

3.2.2 Success Factors ...................................................................................................... 38

3.2.3 Organization .......................................................................................................... 43

3.2.4 Effects on Performance.......................................................................................... 43

4 Integrated Development in Practice ............................................................................ 45

4.1 Industry Survey: An Empirical Investigation ........................................................... 45

4.1.1 Industry Survey – Questionnaire ........................................................................... 45

4.1.2 Industry Survey – Data Sample ............................................................................. 47

4.1.3 Measuring Performance ......................................................................................... 50

4.1.4 Measuring Integration ............................................................................................ 54

4.2 Special Aspects ......................................................................................................... 56

4.2.1 General Findings about the Pharmaceutical Industry ............................................ 56

4.2.2 Integrated Development in the Pharmaceutical Industry ...................................... 59

4.2.3 Organizational Set-Up ........................................................................................... 61

4.2.4 Cross-Functional Collaboration ............................................................................. 65

4.2.5 Success Factors ...................................................................................................... 66

Excursus: Quality by Design in Industry .......................................................................... 70

4.3 Insights from Current Industry Practices .................................................................. 73

5 Successful Approaches to Integrated Development .................................................... 75

5.1 Selection of the Case Study Companies ................................................................... 75

5.2 Conception of the Case Studies ................................................................................ 76

5.3 Case Pharmaco1 ........................................................................................................ 77

5.3.1 The Company ......................................................................................................... 77

5.3.2 The Development Process ..................................................................................... 78

5.3.3 The Organizational Set-Up .................................................................................... 82

5.3.4 Cross-Functional Collaboration ............................................................................. 85

5.3.5 On-going or Past Improvement Initiatives in Late Stage Development................ 88

Table of Contents XIII

5.3.6 Potential for Further Improvement ........................................................................ 90

Excursus: Quality by Design in Practice........................................................................... 91

5.4 Case Pharmaco2 ........................................................................................................ 94

5.4.1 The Company ......................................................................................................... 94

5.4.2 The Development Process ..................................................................................... 96

5.4.3 The Organizational Set-Up .................................................................................. 100

5.4.4 Cross-Functional Collaboration ........................................................................... 101

5.4.5 The Potential for Further Improvement ............................................................... 104

5.5 Insights from the Case Study Research .................................................................. 105

5.5.1 Cross-Case Comparison....................................................................................... 105

5.5.2 Comparison with the Literature ........................................................................... 106

5.5.3 General Insights ................................................................................................... 107

6 Design Characteristics of an Approach to Integrated Development ......................... 109

6.1 Integrated Development as Facilitator .................................................................... 109

6.2 Design and Configuration of Integrated Development .......................................... 111

6.2.1 Organizational Set-Up ......................................................................................... 112

6.2.2 Managing Cross-Functional Collaboration ......................................................... 113

6.2.3 Success Factors .................................................................................................... 117

6.2.4 Knowledge Management ..................................................................................... 118

6.3 Conclusion .............................................................................................................. 119

7 Summary and Outlook ............................................................................................... 121

7.1 Theoretical Implications ......................................................................................... 121

7.2 Managerial Implications ......................................................................................... 123

7.3 Known Limitations ................................................................................................. 125

7.4 Further Research ..................................................................................................... 126

References ....................................................................................................................... 129

Appendix: Survey Questionnaire .................................................................................... 137

List of Figures

Figure 1: Global R&D expenses compared to NMEs (Strickland, 2012). ......................... 2

Figure 2: Time to develop a new drug (CMR International, 2008). ................................... 3

Figure 3: Cost to develop a new drug (Basu, 2010a; PhRMA, 2010). ............................... 3

Figure 4: Development cost per NME (Strickland, 2012). ................................................. 3

Figure 5: Time of patent protection after product launch (CMR International, 2008). ...... 3

Figure 6: Effect of collaboration between development and production on manufacturing

process efficiency. ....................................................................................................... 5

Figure 7: The pharmaceutical development process. .......................................................... 8

Figure 8: Process model of Quality by Design (Yu, 2008)............................................... 12

Figure 9: Research concept. .............................................................................................. 16

Figure 10: Structure of the dissertation. ............................................................................ 20

Figure 11: The NPD-process according to Yeh et al. (Yeh et al., 2008, p.138) ............... 24

Figure 12: Reference framework for integrated development. ......................................... 35

Figure 13: Concept of optimal collaboration along the development process. ................ 38

Figure 14: Categorized success factors from literature, showing the interrelationship and

the effect on performance. ........................................................................................ 39

Figure 15: Adapted reference framework used for the industry survey. .......................... 45

Figure 16: Overview of participants’ departments (n=37) ............................................... 49

Figure 17: Overview of participants’ geographical locations (n=37) ............................... 49

Figure 18: Overview of participants’ company size (n=35) ............................................. 49

Figure 19: Overview of participants’ company operating fields (n=35) .......................... 49

Figure 20: Experience of participants in years (n=35)...................................................... 50

Figure 21: The general pharmaceutical Drug Product development process ................... 51

XVI List of Figures

Figure 22: Linear regression of performance and integration (n=20) .............................. 56

Figure 23: Average distribution of employees (n=24) ...................................................... 57

Figure 24: Average R&D expenditures in 209, 2010, and 2011 (n=15 for 2009, n=18 for

2010, n=14 for 2011) ................................................................................................ 57

Figure 25: Average R&D expenditures in 2009, 2010, and 2011 – comparison of

innovators (branded drugs & biotech) vs. generics/OTC (n=10 for innovators in

2009, n=13 for innovators in 2010, n=9 for innovators in 2011, n=3 for

generics/OTC in 2009, n=4 for generics/OTC in 2010, n=2 for generics/OTC in

2011) ......................................................................................................................... 57

Figure 26: Average development costs (a) and times (b) (n=29 for (a), n=27 for (b)) .... 58

Figure 27: Average development costs (a) and times (b) of innovators (branded drugs &

biotech) (n=24 for (a), n=22 for (b)) ......................................................................... 58

Figure 28: Duration of single process steps and indication of occurrence of selected

milestones (n=13 for process step duration, n=21 for occurences) .......................... 59

Figure 29: Rating of the effect of integrated development on the performance of different

development stages (n=33) ....................................................................................... 60

Figure 30:Degree of integration of participants’ development (n=33) ............................. 60

Figure 31: Degree of working in cross-functional teams (n=30) ...................................... 61

Figure 32: Overview of ways of working in development teams (n=34) ......................... 61

Figure 33: Distribution of organizational responsibility for process development (n=32)

................................................................................................................................... 62

Figure 34: Distribution of organizational affiliation of the transfer group (n=34) ........... 62

Figure 35: Existence of launch sites in participants’ company (n=33) ............................. 63

Figure 36: Average and maximum number of launch sites (n=12) .................................. 63

Figure 37: Degree of existence of designated launch teams (n=33) ................................. 63

Figure 38: Extent of direct reporting to routine/commercial Production by launch teams

(n=33) ........................................................................................................................ 64

Figure 39: Smoothness of transfer at interfaces during the development process (n=21) 64

List of Figures XVII

Figure 40: Model of cross-functional collaboration (involvement and responsibility)

during late stage technical development ................................................................... 65

Figure 41: Positive perception of contextual success factors (n=30 for all participants,

n=5 for high performers) ........................................................................................... 68

Figure 42: Positive perception of enabling success factors (n=30 for all participants, n=5

for high performers) .................................................................................................. 68

Figure 43: Positive perception of team behavior success factors (n=30 for all participants,

n=5 for high performers) ........................................................................................... 68

Figure 44: Positive perception of technical success factors (n=30 for all participants, n=5

for high performers) .................................................................................................. 69

Figure 45: Knowledge management solution in different development stages (n=30 for

all participants, n=5 for high performers) ................................................................. 70

Figure 46: Application of minimum QbD elements during selected development stages

(n=30 for all participants, n=5 for high performers) ................................................. 71

Figure 47: Application of DoE during selected development stages (n=30 for all

participants, n=5 for high performers) ...................................................................... 72

Figure 48: Application of PAT during selected development stages (n=30 for all

participants, n=5 for high performers) ...................................................................... 72

Figure 49: Reasons for practicing minimum QbD, DoE, and PAT. ................................. 73

Figure 50: Development process of Pharmaco1. .............................................................. 81

Figure 51: Development process steps at Pharmaco1 (*Process Performance

Qualification). ........................................................................................................... 86

Figure 52: Results of the internal survey: cross-functional collaboration at Pharmaco1. 86

Figure 53: Internal perception of on-going and recent improvement initiatives at

Pharmaco2. ................................................................................................................ 90

Figure 54: Impact of implementing enhanced QbD elements. ......................................... 93

Figure 55: Impact of implementing PAT. ......................................................................... 94

Figure 56: Development process of Pharmaco2. .............................................................. 99

XVIII List of Figures

Figure 57: Development process steps at Pharmaco2. .................................................... 102

Figure 58: Results of the internal survey: cross-functional collaboration at Pharmaco2.

................................................................................................................................. 103

Figure 59 : Integrated development. ............................................................................... 110

Figure 60: Transformation from a reference framework to a descriptive model. ........... 111

Figure 61: Proposal for optimal cross-functional collaboration in development projects.

................................................................................................................................. 116

List of Tables

Table 1: Clinical phases. ..................................................................................................... 9

Table 2: Literature overview of success factors for cross-functional teams. .................... 31

Table 3: Overview of investigated companies and industries in literature. ...................... 33

Table 4: Context success factors. ...................................................................................... 40

Table 5: Enabling success factors. .................................................................................... 41

Table 6: Team behavior success factors. .......................................................................... 42

Table 7: Participants with the corresponding values of performance (P) (n=37) ............. 53

Table 8: High performing participants with the corresponding value of integration (n=5)

................................................................................................................................... 55

Table 9: Correlation matrix for performance and integration (n=20) ............................... 55

Table 10: Positive perception of success factors of all and of high performing participants

(n=30 for all participants, n=5 for high performers) ................................................. 67

List of Abbreviations

ADME Absorption, distribution, metabolism, and excretion

API Active pharmaceutical ingredient

B2B Business to Business

B2C Business to Customer

CE Concurrent engineering

CF Cross-functional

CFT Cross-functional teams

CMA Critical material attribute

CMC Chemistry, manufacturing, and control

CMO Contract manufacturing organization

CPP Critical process parameter

CQA Critical quality attribute

CRO Contract research organization

DFSS Design for Six Sigma

DOE Design of experiment

EMA European Medicines Agency

e.g. exempli gratia (for example)

et al. et alii

FDA (U.S.) Food and Drug Administration

FMEA Failure model and effect analysis

G Gate

Hrsg. Herausgeber

XXII List of Abbreviations

HSG Hochschule St.Gallen (University of St.Gallen)

i.e. id est (that is)

IP Intellectual property

IPC In-process-control

IPD Integrated product development

ITEM Institute of Technology Management,

University of St.Gallen

MS Milestone

NDA New drug application

NME New molecular entity

NPD New product development

OEE Overall equipment effectiveness

OPEX Operational excellence

OTC Over-the-counter

PAC Post-approval change

PAT Process analytical technology

Pharmaco Pharmaceutical company

POC Proof of concept

PPQ Process performance qualification

QA Quality assurance

QbD Quality by Design

QC Quality control

QFD Quality function deployment

R&D Research & Development

RACI Responsible, accountable, consulting, informed

RBV Resource based view

List of Abbreviations XXIII

SOP Standard operating procedure

TPP Target product profile

TPQP Target product quality profile

1 Introduction

This chapter builds the practical base for the research reported in the present dissertation.

Furthermore, it introduces and defines special terms and describes the research

proceeding.

First, the motivation and the practical relevance are described. This is followed by our

definition of the pharmaceutical industry and by the explanation of other terms. In the

fourth sub-chapter the research goal and questions are introduced. Finally, the research

design is laid out, explaining the general research proceeding and the theory this research

bases on as well as the structure of this dissertation.

1.1 Motivation

There are many scientific publications to the subject of New Product Development and

its advancement, Integrated Product Development (Kamrani and Vijayan, 2006;

Koufteros et al., 2005; Gerwin and Barrowman, 2002; Krüger et al., 2010; Boyle et al.,

2006; Naveh, 2005; Yeh et al., 2008). Supporting tools and methods are described and

their impacts are shown by measurements (Yeh et al., 2008). A great portion of the

existing literature deals with the B2B domain, which is driven by different motives than

the B2C domain (Gerwin and Barrowman, 2002). The remaining literature about

integrated product development in the B2C domain is mostly limited to the mechanical

and electronic industry (Tessarolo, 2007). In other words: there is almost no literature to

this subject focusing on the pharmaceutical or related industries. The main reason is the

substantially more complex development process1. This rather large and especially

relevant industry should no longer be underrepresented in literature.

Furthermore, most existing literature to this subject addresses the measurement of how

various methods and tools impact the development performance (Yeh et al., 2008). The

optimal practical implementation is rather not discussed. Only a very limited amount of

1 The development process itself is not very different from other industries. However, the main difference and increased effort is mostly due to high regulatory requirements.

2 Introduction

examples for the efficient elaboration of the interface between development and

production can be found in the international research community (Vandevelde and

Dierdonck, 2003). Literature is lacking a design model contributing to a higher

understanding of this interface.

The role of launch sites (see chapter 1.3.2) during development is also not sufficiently

described in the literature. So far, there is no model for the collaboration between launch

sites and development, which are in many cases spatially separated.

The FDA initiative Quality by Design (QbD) addresses a contemporary and relevant

concept that is rather new to the pharmaceutical industry (FDA, 2007). Because of its

novelty, there are rather few scientific publications about it. However, a theoretical

description helps to thoroughly understand the initiative and to apply it both effectively

and efficiently.

1.2 Practical Relevance

A neutral observation of the pharmaceutical industry reveals an alarming picture (Figure

1): R&D expenses increase annually. However, at the same time the number of new

products passing registration stagnates. The extreme increase of costs for a new product

is an obvious indication that the pharmaceutical industry has research productivity

issues.

Figure 1: Global R&D expenses compared to NMEs2 (Strickland, 2012).

2 NMEs: New Molecular Entitites. It stands for an entirely new (chemical, but not biotechnological) product. It does not include products with changed dosages or new therapeutic applications and is comparable with the first submission of an active ingredient.

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Introduction 3

Figure 2: Time to develop a new drug (CMR International, 2008).

Figure 3: Cost to develop a new drug (Basu, 2010a; PhRMA, 2010).

Figure 4: Development cost per NME (Strickland, 2012).

Figure 5: Time of patent protection after product launch (CMR International, 2008).

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4 Introduction

Since quite some time a trend has emerged in the pharmaceutical industry: the time to

develop a new product from the discovery of the active ingredient to the final drug

product has increased continuously (Figure 2). This coincides with increasing

development costs per NME (Figure 3 & Figure 4) – caused on the one hand by longer

development times due to constantly intensifying regulatory requirements, and on the

other hand by increasing safety requirements of pharmaceutical products (Basu, 2010a).

In the pharmaceutical industry new substances are filed for patent protection very early

in the R&D process, often during discovery and before the beginning of product

development. Thus, longer development time results in a shorter patent protection period

(Figure 5) during which it can be sold exclusively before competitors or generics

manufacturer can imitate it (Basu, 2010a). Usually, sales decrease up to 80% after patent

expiry, mainly due to substitution by cheaper generics3 (Basu, 2010a). As a result,

today’s new pharmaceutical products must generate more money in less available time.

Additionally, there is increasing pressure on drug prices by governments. This calls for

stable and efficient manufacturing processes right from commercial launch in order to

avoid inefficient and thus excessive manufacturing costs.

Many industries have designed concepts and methods to make the development process

more efficient and thereby shortening it (Yeh et al., 2008; Tessarolo, 2007; Boyle et al.,

2006; Koufteros et al., 2005; Gerwin and Barrowman, 2002; Palacios and González,

2002). Due to the highly regulated development process in the pharmaceutical industry,

established approaches to integrated development from other industries cannot be used

without adaptations. In the pharmaceutical industry, new products are tested for efficacy

and safety in multiple clinical studies. If results are accepted by regulatory authorities, a

product is approved for sale. However, the commercial manufacturing process must be

identical to the process used during development and especially during production of

material used in late studies. Otherwise, there will have to be additional studies, resulting

in increased development costs and time (FDA, 2004). The transfer of the production

3 Generics‘ main advantage are the lower production costs. There are three reasons for these: (1) Production was already optimized for some years when the product was still patent protected. (2) There is a high potential of production optimization at researching companies. For generics producers production is the central driver of success, while traditional pharmaceutical companies consider production to be less important (Basu, 2010a). In US pharmaceutical companies, losses due to inefficient processes are estimated to be as high as 50bn USD (Basu, 2010a; Macher and Nickerson, 2006). (3) Generics producers do not have to finance a large R&D driven overhead. They usually only have a small development department dealing with the adaptation of products and processes to the company and its equipment.

Introduction 5

process from development to commercial production is often sped up in order not to

waste time and hit the market as soon as possible. The transfer is thus often done in a

rudimentary manner, with the main aim only being enabling basic commercial

production. This often results in inefficient commercial processes and thus excessive

manufacturing costs. Major adaptations to commercial scale equipment and environment

are omitted in order to not further increase time-to-market.

Figure 6: Effect of collaboration between development and production on manufacturing

process efficiency.4

As literature and case studies suggest, there is one specific method to avoid the issues

described above: integrated development with a special focus on cross-functional teams

(Tessarolo, 2007; Koufteros et al., 2002, 2005; Yeh et al., 2008; Boyle et al., 2006;

McDonough, 2000). Central to this concept is the early integration of production during

development. This allows ensuring in an early phase that the developed processes can be

efficiently implemented in a commercial scale and with commercial-scale equipment.

Data from practical examples demonstrate that stronger collaboration of development

and production in companies leads to more efficient processes (Figure 6). The more

advanced a company becomes in integrated development, the earlier processes are

adapted and optimized to the commercial scale environment. Ideally, the processes

transferred into commercial production do not need any further optimization and do not

4 Data taken from unpublished “Operational Excellence (OPEX) in the Pharmaceutical Industry Benchmarking 2004-2012” (Chair of Production Management, Institute of Technology Management, University of St.Gallen). Manufacturing process efficiency is calculated as product of Yield (%), Rejected Batches (%), Overall OEE (%), and Deviations (%). Production involvement during development is based on the question "Manufacturing engineers (e.g. Industrial engineers) are involved to a great extent in the development of new drug formulation and the development of the necessary production processes", assessed by a 5-point-Likert scale. All data is based on information of 91 participating pharmaceutical companies.

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6 Introduction

cause excessive manufacturing costs. In the pharmaceutical industry, development and

production are separated and work more or less as silo-organizations. Through an

improved collaboration, manufacturing costs could be significantly decreased.

Furthermore, the continuous increase of development costs and time is halted.

By now, a model of integrated development applicable to the pharmaceutical industry

has been missing. Such a model should specify how to shape the integrated development

process, with a focus on how to involve production into development as early as

possible. Through integrated development, manufacturing process efficiency is increased

while manufacturing costs are decreased. With a solid process design less problems will

arise, and thus less costs accumulate: "quality of the development process dictates the

quality of the manufacturing process that follows – and will lead to cost savings in

manufacturing!" (Basu, 2010a, p. 33). FDA’s Quality by Design initiative takes some

needed first steps into that direction.

1.3 Terms and Definitions

1.3.1 The Pharmaceutical Industry

This dissertation exclusively deals with the pharmaceutical industry5 and is thus

specifically focused. This focus was chosen because other industries (mainly electronics

and mechanic engineering industry) are more advanced regarding integrated

development and supporting methods are applied almost by default (Gerwin and

Barrowman, 2002). Apart from that, insights from other industries cannot be applied to

the pharmaceutical industry as is, mainly because it is a highly regulated industry6. This

5 The term pharmaceutical industry is equal to the Life Sciences industry, covering both the pharmaceutical and the biotechnological industry. Although there are some differences between these industries (e.g. different manufacturing principles, different regulatory requirements, different manufacturing scales, etc.), they share main characteristics and are thus considered as one industry.

6 In this dissertation, the following industries are covered by the term highly regulated industries: the pharmaceutical, the biotechnological, to some extent the chemical, to some extent the food, the aerospace, and the atomic industry. They all share the fact that deficiencies in their products can cause massive damages to the consumer. They have to fulfill highest (safety-)requirements. Generally, they (mainly the production facilities) are inspected regularly by regulatory authorities. Furthermore, highest risks are common to all these industries. Thus, final products cannot be improved by experiments but rather have to be fully functional and safe even for the first prototype (e.g. when building a nuclear power plant, all potential errors must be identified and eliminated during design and development phase in order to avoid massive damages). To substitute tests under real conditions, simulations and models are often used by these industries.

Introduction 7

alone is not enough reason to not be able to adopt concepts from other industries without

major adaptations, especially since there are some examples from highly regulated

industries (mainly aerospace industry) (Basu, 2010b; Araujo and da Cruz, 2000; Mendes

et al., 2002; Terwiesch and Loch, 1999). It is rather the combination of high regulation,

highest safety and quality standards, and the somehow to other industries not comparable

development process that makes the pharmaceutical industry special and thus requires a

different approach and major adaptations to established concepts.

In the pharmaceutical industry production facilities and processes are regularly inspected

by regulatory authorities7. They define, control, and enforce new standards and

guidelines. In some markets it is only possible to sell products from certified production

sites (e.g. in the US it is only possible to sell products that were produced in FDA-

certified production sites). The reasons for high regulation are highest quality, cleanness,

and safety requirements in order to meet patient safety. Regulatory agencies validate

both production equipment and processes.

1.3.2 The Launch Site

Launch sites are manufacturing sites dedicated to the launch of new products. These sites

are usually equipped with highest technological standards. In general, new products are

transferred from development to launch sites where the manufacturing process is then

further adapted to the commercial scale. As soon as newly introduced products are

established, it is decided whether they stay at the launch site (mostly in case of

strategically important products) or are transferred to a secondary manufacturing site.

Thus launch sites are often high capacity sites where many different products are

produced (compared to secondary manufacturing sites that are often dedicated to one

single product). Traditionally, launch sites are the connection of development and

commercial production.

7 The most relevant regulatory authorities (also for this dissertation) are USA’s Food and Drug Administration (FDA), Europe’s European Medicines Agency (EMA), and Switzerland’s Swissmedic.

8 Introduction

1.3.3 The Pharmaceutical Development Process

A large portion of the pharmaceutical development process is used for testing a

substance for safety and efficacy (Figure 7). This is inevitable since the final product will

be applied directly or indirectly in humans. Gradually along the development process,

first safety and then therapeutic efficacy are tested and demonstrated. Products are only

approved by regulatory agencies if they are safe and have a demonstrable therapeutic

effect.

Development is divided into chemical and pharmaceutical development. The former

covers the development of the active pharmaceutical ingredient (API). This is the

ingredient which is responsible for a drug’s therapeutic effect. Pharmaceutical

development, on the other hand, deals with the development of the final drug product. Its

administration form, e.g. a pill, a spray, or a liquid for injection, and dosage are essential

for the therapeutic effect to unfold. This dissertation only covers pharmaceutical or drug

product development.

Figure 7: The pharmaceutical development process.

Development begins with the identification of leads8 that are further optimized. The most

promising lead becomes a so called development candidate. During early development, it

is pre-clinically tested in a lab environment and later in animal models. Then three

clinical phases follow, where tests in humans are conducted in order to test the safety

and efficacy as well as to gain more knowledge about the drug.

8 The term “lead” describes a chemical or biological molecule to which a clinical effect is attributed (at least in theory).

Research Clinical Development

Discovery Early Development Late Development

Pre-Clinical Development

Lead

Identification

Registration

Lead Optimization In Silicio Models In Vitro Models Animal Models Phase I Phase II Phase III Global LaunchRe-

gistration

Launch

Candidate Selection /

First Toxicity Dose

First Human Dose First Efficacy

Dose /

First Patient Dose

Product Decision First SubmissionFirst Launch

First Approval

Development Process

Introduction 9

Clinical Development Phases in Pharmaceutical Development

Clinical studies performed during development of new products are described as follows

(Andrews, 2009). Additional data is available in Table 1.

Table 1: Clinical phases.

Clinical phase I studies are usually conducted in a small number of healthy humans.

They are typically used to assess ADME (absorption, distribution, metabolism, and

excretion) attributes, meaning to gain knowledge about how the substance behaves in the

human body, as well as tolerance data in order to plan patient dosing in phase II studies.

Clinical phase II studies are typically conducted in a few hundred patients. The goal is to

test efficacy of the drug and demonstrate its clinical effect (Proof-of-Concept, PoC).

They are also used to gain further knowledge on dosages.

Clinical phase III studies are usually studies involving a large number of target patients

(several hundreds to thousands). The goal is to demonstrate safety and efficacy for

registration. In general, at least two adequate studies are required by regulatory agencies

for the approval of a new drug. Phase III studies can also be conducted in order to

develop new therapeutic indications.

Clinical phase IV studies are post-approval studies. Usually they are used to gain

extended data about the product and its mechanisms in order to allow for more specific

and optimal treatment.

During the three clinical phases many development projects are terminated mainly

because they do not meet the requirements and thus constitute a risk or fail to have the

desired effect. In total, it is believed that only about 1% of all drug candidates master the

path from pre-clinical development to a final product (PhRMA, 2010). As soon as

Clinical phase I Clinical phase II Clinical phase III Clinical phase IV

Study duration: ~1 year 1-2 years 1-3 years open

Study

participants:

few healthy humans

few hundred target patients

several hundreds to thousands

target patients study-dependent

10 Introduction

enough data about safety and efficacy is collected, usually during or at the end of clinical

phase III, the drug product is filed for submission with the regulatory agencies. It also

has to be specified where and how it was and will be produced. Thus a detailed

manufacturing process is submitted and ideally also approved.

Parallel to clinical development, the product is technically developed as well. During the

clinical phase I mainly the formulation and basic manufacturing processes are developed.

During phase II, the manufacturing process is developed in small scale environment (lab

scale) and subsequently scaled-up to large scale. During technology transfer before or at

the beginning of phase III it is finally transferred from development to production. It is

often only rudimentarily adapted to work in commercial scale with commercial

equipment and to produce enough product and data to register with regulatory agencies.

Since this is a sub-optimal process, global launch manufacturing problems often arise

and lead to massive delays. In this phase launch sites have an important role, as they

serve to adapt manufacturing processes to commercial scale in a trial-and-error

procedure. Major changes in the approved process entail subsequent filings and imply

further delays.9 If the process is not adapted, it is produced with an inefficient

manufacturing process in routine production. This inevitably leads to increased

manufacturing costs.

As Basu (2010b) appropriately remarks, "If process development is largely empirical in

nature, then manufacturing becomes a 'Big Experiment' and learning on the plant floor

can be very expensive" (Basu, 2010b, p.30).

Excursus: Quality by Design – A Recent FDA Initiative

There exists a first holistic approach to product development in the pharmaceutical

industry. However, it is still rather conceptual and mostly theoretically. It was designed

by the FDA and recently launched as the initiative Quality by Design (QbD) (FDA,

2007).

9 Any changes to the product and the manufacturing process must be documented and filed with regulatory authorities. If major changes influence product quality or efficacy, a clinical study (with only few participants) has to be conducted in order to show that the product is equivalent to first approval.

Introduction 11

Its main goal is to induce a shift from the currently prevailing Quality after Design10.

Regarding process development and quality, a shift from current re-active methods to a

pro-active thinking is to be achieved. Primarily the initiative should improve quality of

pharmaceutical products, mainly by defining the manufacturing process “quality-

friendly” and by identifying those production steps that could cause quality issues early

during development. These steps can then be closely monitored during production.

Insufficient quality can thus be identified right at the occurrence and be corrected – this

leads to less scrap. The application of QbD improves the understanding of the product

and especially of the process.11

As a benefit of applying QbD companies are offered a simplified process of registration

by the FDA. Furthermore, QbD should reduce development time and along with that

development costs decrease as well. Additionally, production costs can be reduced with

a consequent application of QbD. As of the definition of QbD, production should be

involved early – when defining the production process – in development so that process

scale-up runs simplified and prepared and processes transferred to production can be

implemented and applied in an efficient way (Yu, 2008). Further benefits from QbD

application include: Reduced costs of quality, shortened process development time,

increased flexibility for process adaptations or changes, and reduced efforts for

regulatory authorities (McCormick, 2006; Tozer, 2008).

Full QbD implementation might have a major drawback. QbD is FDA-driven and

adopted by many other regulatory authorities. Some, however, still accept solely

“classic” registration. If a company intends to serve different markets of which some

regulatory authorities accept QbD registrations and others do not, it has to prepare two

major different registration dossiers. This might also be a reason why some companies

follow QbD approaches internally, but still register their products in the classical way.

In many companies QbD is not fully implemented and can thus not unfold its full

potential (Basu, 2010b; Rathore, 2010). Reasons therefor are identified quickly: (1) The

10 Quality after Design means products are inspected for quality after production. This can lead to excess amounts of scrap. Current efforts such as Lean Six Sigma, RFT (Right the First Time), OPEX (Operational Excellence), etc. aim to monitor product quality after product launch and eventually to improve it through production optimizations (Basu, 2010a).

11 Thorough knowledge of manufacturing processes improves production as well. Efforts like Lean Six Sigma (among others) to optimize production are rather short-term measures because no real process understanding is built up (Basu, 2010a).

12 Introduction

understanding of QbD is varying tremendously, (2) responsible managers do not know

how to efficiently implement QbD concepts, (3) confidence in QbD and thus also

commitment is missing, (4) initial implementation is difficult and challenging, mainly

because a broad knowledge base has to be created in order to profit in future projects,

and (5) more technical reasons (Rathore, 2010).

QbD introduces substantial changes in the technical development process (compared to

the classical and widely used approach). However, clinical development is not affected.

Figure 8 shows the essential process steps in product development according to QbD

principles (Yu, 2008; Harper, 2009). These steps are detailed further below.

Figure 8: Process model of Quality by Design (Yu, 2008). 12

Initially the Target Product Profile (TPP) is defined. It describes a product in

development on a largely abstracted level, in order to be defined roughly and to fit to the

current strategy. Basically, it can be outlined as "planning with the end in mind" (Yu,

2008, p. 784). From the TPP, the Target Product Quality Profile (TPQP) is derived. This

profile sets the parameters that determine quality in order to fulfill the TPP. Typically,

TPQP characterizes properties like "Tablet Characteristics, Identity, Assay and

Uniformity, Purity / Impurity, Stability, and Dissolution" (Yu, 2008, p. 784), thus all

kinds of physical product characteristics that are defined by engineers in form of

definitions for pH-value, solubility, melting point, and others.

Critical Quality Attributes (CQA) are defined in the following step. This covers

"physical, chemical, biological, or microbiological property or characteristic that must be

controlled directly or indirectly to ensure the quality of the product" (Yu, 2008, p. 786).

12 TPP: Target Product Profile; TPQP: Target Product Quality Profile; CQA: Critical Quality Attributes; Process Design; CPPs: Critical Process Parameters; CMAs: Critical Material Attributes.

Pro-

duction

process definition

(to achieve

quality)

identification of

critical process

steps

(to achieve

quality)

Design

Space

CPPs /

CMAs

Process

DesignCQATPQPTPP

QbD Process

Introduction 13

Thereafter, the Manufacturing Process is defined. During this step it is important that

production is already involved and assists to shape the manufacturing process in a most

realistic and practical way. Specialists from launch sites or Transfer Organizations are

most likely to possess the most expertise and experience therefor. Based on CQA, those

Critical Process Parameters (CPP) and Critical Material Attributes (CMA) are

identified, which have a direct or indirect influence on product quality. These parameters

and attributes have to be monitored continuously in commercial production in order to

control product quality.

All this preparatory work leads to the definition of the Design Space. There are many

differing definitions of the term “design space”. Generally and especially in the context

of QbD, it is defined as definition of all processes and parameters and their ranges and

critical margins.13 These ranges and margins are identified and set by experiments,

calculation models, and preliminary built-up knowledge. The design space directly

influences manufacturing of the final product and the monitoring of the identified

process parameters.

However, it has been found to be a problem that the manufacturing process is mainly

designed by development rather than by production. This implies that the process is

defined for a small scale rather than for large commercial scale. These differently scaled

processes can differ significantly, what also affects CPP and CMA and thus also the

design space. If commercial manufacturing is started with the design space for lab scale,

usually major adaptations are necessary. The challenge is involving production in

process development. Thereby, scale-up occurs at an early stage in development and

leads to a scale-adapted design space and thus to a smooth product launch with efficient

manufacturing processes. This involvement is only possible if experts from launch sites

can share their knowledge and make it accessible to development specialists. This can be

achieved by integrated development approaches (especially cross-functional teams).

Ranges for specific parameters defined in the design space are a distinct advantage of

QbD. In traditional pharmaceutical production, validated manufacturing processes

cannot be changed without regulatory effort. For products approved within QbD, the

13 A descriptive example: For a certain process step the pH value is identified to be a CPP. For example, it has to be 13. Through experiments, prior acquired data and knowledge, and scientific methods it is shown that the process step also works at a pH value between 12 and 14 with no difference in the results. In the design space the pH value is defined as within the range of 12-14 to produce the desired quality.

14 Introduction

processes can be changed as long as it can be shown that the critical parameters stay

within defined ranges. QbD brings a lot of flexibility in commercial production and

effectively reduces administrative and regulatory effort for process adaptations.

Contrary to theory, a detailed and practical implementation model for QbD is missing.

Such a model would show how to efficiently implement QbD in practice and what the

emerging consequences could be. This dissertation contributes to understand the

interaction between development and production as well as the influence of launch sites

and Transfer Organizations. Further it shows how these insights can be introduced into

QbD.

One consequence of the science driven QbD approach is occurring in technical

development: There is a shift, mainly driven by regulatory agencies, away from

inflexible phases in technical development towards a more continuous approach (FDA,

2011). Late process development is called process design phase and used to deliver a

scientific rationale of why the product is how it is. Following used to be technology

transfer and validation, now called process performance qualification. In the end is

continuous process verification, meaning a continuous monitoring of the process and the

product quality. This is more aligned with ongoing QbD efforts, meaning to use a

scientific approach instead of trial-and-error. However, it is still in a rebuilding phase

and its full effects are yet to be harvested.

1.4 Research Goal and Question

This dissertation stands in the tradition of applied social sciences after Ulrich (1981) and

Bleicher (2004). Initial point is a current problem of the producing industry with a

relevant question for the management of international companies. The goal is thus to

generate necessary knowledge to solve the practical problem. In the center is the

development of a model for the design and modification of the social reality (Ulrich,

1981). Regarding the challenges in product and process development of pharmaceutical

companies and described deficiencies in literature, this dissertation attempts to answer

the following question:

Introduction 15

Does the integration of a manufacturing perspective in development lead to higher

production efficiency at product launch in the pharmaceutical industry?

Indicators representing production efficiency at product launch are identified. The

concept of cross-functional teams is adapted and applied to the pharmaceutical

development process. The influence of launch sites or Transfer Organizations is

investigated and transferred into a descriptive model.

The overall research question is broken down into the following sub-questions. They are

leading the research project and contributing to the overall answer.

� How can the efficiency of newly introduced production processes be measured

(operationalized)?

� Can selected approaches from other industries be transferred to the

pharmaceutical industry (e.g. cross-functional teams)? If yes, how is the

development process to be modified and what are success factors?

� What is the role of Transfer Organizations and launch sites in integrated

development and can they help to connect development and production?

1.5 Research Design

1.5.1 Research Concept

The research concept describes the basic proceeding and the methods used in order to

answer the research question. In general, this research follows the case study research

concept.

A three-phase and five-step proceeding was used to finally lead to a validated descriptive

model of integrated development in the pharmaceutical industry (Figure 9). First,

existing concepts (including success factors, methods, and tools) of integrated

development were identified in literature. Second, according to their contribution they

were characterized and put together into a reference framework for the pharmaceutical

industry. Third, the developed framework was validated in an international survey with

quantitative and qualitative elements. Fourth, the survey results lead to propositions and

characterizations that were applied in practice. This was described in descriptive case

studies and constitutes the most important part of this case study research concept driven

16 Introduction

proceeding. Fifth, industry and case study insights transferred the reference framework

into a descriptive reference model for the pharmaceutical industry.

Only pharmaceutical companies being globally active and having multiple sites were

considered to be part of the research process. There were no other restrictions, however,

these criteria proved to be enough to obtain a quite homologous group of companies.

This is mainly to ensure that companies and their challenges but also developed and

proposed solutions are applicable to all participants and research results can be

generalized.

Figure 9: Research concept.

1.5.1.1 Phase 1: Reference framework

In order to gain theoretical knowledge about integrated development, the relevant

literature about integrated development, cross-functional teams, and success factors was

analyzed. Existing concepts were translated into a reference framework. Accompanying

expert interviews ensured practice relevance. The reference framework contains all

relevant factors, characterizations, and connections of single topics.

1.5.1.2 Phase 2: Validation

In a quantitative and qualitative industry survey the reference framework was tested.

Practical implications were then tested in practice in participating companies. Findings

were described in case studies.

Reference framework Descriptive reference model

� Literature review

� Reference framework

� Case studies

� Industry survey

� Descriptive reference model

Validation

Introduction 17

1.5.1.3 Phase 3: Descriptive reference model

Practical insights from the survey and case studies were used to validate the reference

framework and to transform it into a descriptive reference model. As a result of defined

criteria at the selection of contributing companies, the descriptive model can be

generalized for the pharmaceutical industry. The descriptive model demonstrates how

integration in the pharmaceutical development process – mainly in the form of cross-

functional teams as well as early and extended collaboration – has to be shaped in order

to positively contribute to production efficiency. Furthermore, the model contributes to

practical implementation of QbD.

1.5.2 Research theory

The main goal in management science is to find explanations and theories as to why

some companies perform better than others (Rumelt et al., 1991). There are two different

perspectives to analyze and explain a firm’s performance: the internal and the external

perspective. The external perspective focuses on attractiveness and competitiveness in

the industry and the market (Porter, 1980). While the internal perspective considers a

company’s success as the ideal allocation of internal resources, as described in the

resource based view (RBV).

The internal resource perspective was first mentioned by Penrose (1959). At that time, it

did not form a self-standing theory. This came later, when “the resource based view of

the firm” was defined (Wernerfelt, 1984). Its popularity and scientific acknowledgement

then grew substantially with the work of Barney (1991). Over time, many authors

contributed to its conceptual development.

The RBV focuses on resources and capabilities as essential for the creation of

competitive advantage. A firm’s resources are described as “all assets, capabilities,

organizational processes, firm attributes, information, knowledge, etc. controlled by a

firm that enable the firm to conceive of and implement strategies that improve its

efficiency and effectiveness” (Barney, 1991, p.101). Competitive advantage is achieved

by “implementing a value creating strategy not simultaneously being implemented by

any current or potential competitors” (Barney, 1991, p.106). The valuable, rare,

inimitable, and non-substitutable (V.R.I.N.) resources determine which markets may be

entered and what level of profit can be expected (Wernerfelt, 1989; Wang and Ahmed,

18 Introduction

2007). However, simply having advantageous resources at hand may not suffice for

competitive advantage: distinctive capabilities related to the use of resources are needed

(Penrose, 1959).

A clear definition of RBV terminology (e.g. what resources are) is missing (Thomas and

Pollock, 1999). It is suggested that the identification of V.R.I.N. resources – responsible

for competitive advantage – is achieved by finding superior performance and then

connecting it to unique resources the firm appears to possess (Eisenhardt and Martin,

2000; Barney, 1991). Thus, the definition of the RBV theory is tautological (Wang and

Ahmed, 2007).

The business environment grew more dynamic. This challenged classic RBV

propositions: they were found to be static and not considering the influence of markets’

dynamics (Eisenhardt and Martin, 2000; Priem and Butler, 2001). This led to the

creation of dynamic capabilities, combining both resources and dynamically to the

environment adapting capabilities, as an enhancement to the RBV (Teece et al., 1997;

Helfat, 1997; Eisenhardt and Martin, 2000; Zahra and George, 2002).

Dynamic capabilities are defined as “the firm’s processes that use resources –

specifically the processes to integrate, reconfigure, gain and release resources – to match

and even create market change,” and “the organizational and strategic routines by which

firms achieve new resources and configurations as markets emerge, collide, split, evolve,

and die” (Eisenhardt and Martin, 2000, p.1107). They are “a firm’s behavioral

orientation to constantly integrate, reconfigure, renew and recreate its resources and

capabilities, and most importantly, upgrade and reconstruct its core capabilities in

response to the changing environment to attain and sustain competitive advantage”

(Wang and Ahmed, 2007, p.34). Thus they are not processes, but rather “embedded in

processes” (Wang and Ahmed, 2007, p.34).

Like in the RBV, terminology is not definite: for example, dynamic capabilities are

defined as “the firm’s ability to integrate, build, and reconfigure internal and external

competences to address rapidly changing environments. Dynamic capabilities thus

reflect an organization’s ability to achieve new and innovative forms of competitive

advantage given path dependencies and market positions” (Teece et al., 1997, p.516).

This is very similar to the definition of capabilities in RBV: “The key role of strategic

management in appropriately adapting, integrating, and reconfiguring internal and

Introduction 19

external organizational skills, resources, and functional competences to match the

requirements of a changing environment” (Teece et al., 1997, p.515).

Development of new products is a crucial activity of most firms: new products determine

a firm’s success. They may constitute a competitive advantage per se, but also by being

on the market faster, to a better price, or better quality. Therefore, the ultimate goal is to

optimize the process of new product development in a way that new products are better

than competitors’ products regarding described attributes. The resources used in the

development process must thus be allocated highly dynamically in order to best support

the process and the product.

As the goal of this research is not the analysis of external drivers such as market and

environment, but rather the optimization of internal resource allocation, only the RBV

and its advancement “dynamic capabilities” are considered to be the valid research

theory.

A structured approach to the development process leads to improved allocation of

resources. This is best explained with the RBV. Therefore, the findings of this

dissertation will be theoretically discussed through the perspective of the RBV and its

dynamic capability enhancement.

1.5.3 Structure

This dissertation is structured in 7 chapters with the following content (Figure 10):

1.5.3.1 Chapter 1: Introduction

The first chapter describes the personal motivation for the research as well as the

theoretical and practical relevance. Important terms and concepts are introduced.

Furthermore, the research goal, question, design, and theory are defined.

1.5.3.2 Chapter 2: Theoretical Foundation

In chapter 2 insights from literature and theoretical basics are discussed. The focus

mainly lies on cross-functional collaboration, which is the most important aspect of

integrated development. Implications from the theoretical basis constitute the conceptual

framework.

20 Introduction

Figure 10: Structure of the dissertation.

1.5.3.3 Chapter 3: Development of a Reference Framework

Based on the literature review, elements from existing concepts are put together into a

reference framework. This includes all factors, methods, and tools as well as connections

between single elements.

1.5.3.4 Chapter 4: Integrated Development in Practice

In chapter 4 the design and then results of the industry survey are described. General and

detailed industry insights are identified.

Chapter 1: Introduction

Chapter 2: Theoretical Foundation

Chapter 3: Development of a Reference Framework

Chapter 4: Integrated Development in Practice

Chapter 5: Successful Approaches to Integrated Development

Chapter 6: Design Characteristics of an Approach to Integrated Development

Chapter 7: Summary and Outlook

1.2 Practical Relevance1.1 Motivation1.3 Terms and

Definitions

1.4 Research Goal and

Question1.5 Research Design

2.1 From New

Product

Development…

3.2 Components in Detail3.1 The Framework in General

4.1 Industry Survey: An Empirical

Investigation4.2 Special Aspects

4.3 Insights from Current Industry

Practices

5.1 Selection of Case

Study Companies

5.2 Conception of the

Case Studies5.3 Case Pharmaco1 5.4 Case Pharmaco2

6.1 Integrated Development as Facilitator6.2 Design and Configuration of

Integrated Development

7.1 Theoretical Implications 7.2 Managerial Implications 7.3 Known Limitations 7.4 Further Research

6.3 Conclusion

5.5 Insights from Case

Study Research

2.3 Concurrent

Engineering

2.4 Cross-

Functional

Teams

2.5 Success Factors

in Product

Development

2.2 …To Integrated

Product

Development

2.6 Insights and

Theoretical

Deficits

Introduction 21

1.5.3.5 Chapter 5: Successful Approaches to Integrated Development

Two case studies describe successful approaches to integrated development in practice.

In an excursus QbD application and implementation in practice is explained. The chapter

is concluded with a cross-case analysis and a short comparison to literature.

1.5.3.6 Chapter 6: Design Characteristics of an Approach to Integrated Development

Based on case study research and insights from the industry survey, a descriptive

reference model for integrated development in the pharmaceutical industry is developed.

1.5.3.7 Chapter 7: Summary and Outlook

Implications for research and practice are described. Limitations to this research as well

as possible areas for further research are mentioned.

2 Theoretical Foundation

This chapter builds the theoretical base of the research by reviewing the up-to-date

literature. The literature was screened for existing information to the topic of integrated

development in general and to some of its methods in particular. Therefore, the literature

about integrated product development, concurrent engineering, cross-functional teams,

and success factors was reviewed. The literature on integrated development discusses its

role in development performance and describes supporting tools and methods. The

outcomes of this literature review provide the elementary input for the reference

framework.

2.1 From New Product Development…

The development of new products constitutes a central strategic activity for most

companies (Yeh et al., 2008; Koufteros et al., 2005; González and Palacios, 2002). In the

early 90ies the development of new products and processes, with the main focus on

products, amounted to 76% of the industrial research in the USA (Ettlie, 1995). The

main reason for its strategic importance is the fact that new products make up an

increasing part of sales. Today’s time is characterized by fast change and companies are

afflicted by the fact that markets demand innovations in constantly shorter cycles and

product life cycles as well as increasing product quality (Yeh et al., 2008). As a logical

consequence, companies face the difficult task of decreasing development times and

costs while simultaneously increasing product quality and innovation (Yeh et al., 2008).

This can be achieved by increasing the efficiency of the development process. Efficiency

can be measured by either one or combinations of the following indicators or as impact

on future manufacturing costs:

� Development time: it describes the time span from the generation of the idea for

a product until its market introduction. It is also called NPD-time or time-to-

market.

� Development costs: they describe all development relevant costs that accumulate

during the development time. Sometimes they are referred to as NPD-costs.


� Product quality: it describes the quality of the finished and marketed product.

� Manufacturing costs: they describe all costs that are incurred to manufacture the

product. They are also influenced during development: if the manufacturing

process is developed to be effective and efficient, no adaptations are required

(which means no additional costs). Furthermore, inefficient processes result in

excessive manufacturing costs.

In order to address the development of new products in a systematic way, a structured

process was defined: the New Product Development (NPD) process14 (Krüger et al.,

2010). This approach is considered to be the paradigm of new product development

(Krüger et al., 2010; Gerwin and Barrowman, 2002). The NPD process is a sequence of

different steps, activities, and decisions during the development of a new product from

the initial idea to the commercial manufacturing of the final product (Yeh et al., 2008;

Cooper and Kleinschmidt, 1997). Figure 11 depicts the NPD process used in this work.

Figure 11: The NPD-process according to Yeh et al. (Yeh et al., 2008, p.138)

Cooper & Edgett (2003) demonstrated that the success rate of development projects

following the NPD process lies at around 60%. Traditional NPD processes are followed

sequentially, they are not overlapping or integrated (Gerwin and Barrowman, 2002).

Thus, no activities and process steps are executed in parallel. In order to render the

process more efficient it is proposed “avoiding wastage of resources on peripheral

activities, changes, and reworks” (Yeh et al., 2008, p.132). This means generally the

prevention of unnecessary activities (Palacios and González, 2002). Furthermore, it was

14 There is not one single NPD process, there are rather various different variants described. They do not significantly differ in contents and goals, but rather in their general definition and along with that in the number of defined steps. Among others there are variants with four (Sun and Wing, 2005), seven (Yeh et al., 2008), eight (Nijssen and Frambach, 2000), or a variable number (Thia et al., 2005) of steps. Furthermore, these approaches differ in their extent of formality. An example of a very formal NPD process is the Stage-Gate NPD process (Cooper and Edgett, 2003). In this dissertation, the term NPD process refers to the definition by Yeh et al. (Yeh et al., 2008, p.135f).

CustomerCustomer

requirements

Development

proposal

Project

planning

Conceptual

design

Product

design

Prototype &

test

Process

development &

pilot run

Manufacturing

NPD Process

Theoretical Foundation 25

searched for influence factors responsible for shortening the development time. The

following factors (among others) were identified and further researched for their

influence: modularity at product structure level (common basis for an entire product

family) (Danese and Filippini, 2010), product vision (common vision and idea about a

product in project teams) (Tessarolo, 2007), and integration15 (Tessarolo, 2007; Ettlie,

1995). It was demonstrated, that under certain conditions they all have a positive effect

on NPD process performance. Thus they lead to better manufacturing processes (higher

manufacturability) while shortening the development time.

Furthermore, different tools, methods, and practices with positive effects on NPD

processes were identified (Palacios and González, 2002). In different studies it was

shown that the consequent and consistent application of one or more such tools increase

NPD process success significantly (Yeh et al., 2008; Thia et al., 2005; González and

Palacios, 2002). Despite these obvious benefits, they are applied only to a small extent in

development, particularly compared to production (where such tools are applied

regularly and with great success) (Yeh et al., 2008). Various reasons therefore were

identified: “low level of awareness among project managers”, “limited faith of managers

on the effectiveness of NPD tools”, “rejection of change due to culture” (Thia et al.,

2005, p.407) as well as the fact that R&D engineers are often not familiar with the tools

and do not know when in the development process to apply them (Yeh et al., 2008).

2.2 …To Integrated Product Development

The NPD concept was extended and transformed into the IPD concept (Integrated

Product Development). Thus, IPD represents an advancement of NPD. The application

of IPD processes is considered to be one of the biggest trends in new product

development (Gerwin and Barrowman, 2002). IPD is a management concept with the

goal of improving NPD performance, mainly by “overlap, parallel execution, and

15 Generally, the strategy of integration is considered to be the key to NPD success (Koufteros et al., 2005). For the highest possible effect, integration should start the earliest possible. It can be divided in internal and external integration. While internal integration includes concepts like cross-functional teams, concurrent engineering, and early involvement of all relevant organizational units, external integration is subdivided into customer and supplier integration. Customer integration describes the co-operation of the developing company with its customers. This ensures that customer requirements are considered and development is focused on them (Koufteros et al., 2005). Supplier integration is again subdivided in product or black box integration (suppliers develop parts for the final product on their own) and process or grey box integration (collaborative development in order that supplier processes can be integrated in the final design) (Koufteros et al., 2005).


concurrent workflow” (Naveh, 2005, p.2791). The generic IPD process consists of the

following four phases: detailed task definition, conception, detailed development work,

and prototype design (Krüger et al., 2010). The most important characteristics are the

degree of overlapping and interaction of NPD activities (Gerwin and Barrowman, 2002).

The following is typical for IPD concepts and is most often applied to achieve IPD:

“cross-functional NPD teams (CFT) and concurrent product development processes

(CDP)” (Boyle et al., 2006, p.38); cross-functional and interdisciplinary teams (Griffin,

1997b; McDonough, 2000); overlapping of certain activities during the development

process, leading to a partial or complete parallel execution, as well as interdisciplinary

teams (Krüger et al., 2010; Gerwin and Barrowman, 2002); a very holistic product

consideration, teamwork, customer orientation, information and communication flow,

the application of new technologies, and the dynamic work flow (Krüger et al., 2010);

„concurrent engineering, design for manufacturability, early manufacturing

involvement“ (Gerwin and Barrowman, 2002, p.939). Among others, „creating more

manufacturable design“ has many advantages compared to other approaches (for

example the simpler NPD approach) and is responsible for its growing popularity

(Gerwin and Barrowman, 2002, p.938).

The most frequently mentioned “cross-functional or interdisciplinary teams” and

“concurrent engineering” are administrative methods that increase efficiency of IPD

compared to NPD (Boyle et al., 2006). However, they can be accompanied by critical

aspects, for example burn out of team members and too many meetings (Krüger et al.,

2010; Gerwin and Barrowman, 2002). These two and their consequences are main

reasons why the implementation of the IPD process requires a high degree of

coordination (Gerwin and Barrowman, 2002). For the same reason, commitment of top

management (Boyle et al., 2006; Swink, 2000) and the willingness of different functional

units to collaborate (Boyle et al., 2006) are critical for the success of IPD projects.

There exist further more practical and technical tools and techniques (for example QFD,

FMEA, Fishbone, and others) with the goal of improving the IPD process. They can be

divided in three areas: “organizational design approach”, “information-processing

approach”, and “application of total quality management principle” (Gerwin and

Barrowman, 2002, p.939). Both Boyle et al. (2006) and Yeh et al. (2008) provide an

overview of the most frequently used tools and methods. Yeh et al. (2008) further

provides an evaluation of the usage frequency during the NPD process steps as well as


the influence of the tools and techniques.16 The performance of development projects

following IPD principles can be measured by “development time”, “development cost”,

“product quality”, and “overall product performance” (Gerwin and Barrowman, 2002,

p.940). These indicators as well as the achieving of their set goals are all inter-connected

and depending on each other.

By the consistent implementation of many IPD principles and the application of various

tools and techniques, Toyota managed to shorten the development time of new car

models by two to three years (Naveh, 2005). Gerwin & Barrowman (2002) provide a

general overview of companies that have so far been analyzed for their implementation

of the IPD process.

Due to their effectiveness in the IPD process17 on the one hand and because of their

administrative and organizational nature on the other hand, the following concepts of the

IPD approach are discussed in more detail (Yeh et al., 2008): Cross-functional

(interdisciplinary) teams and concurrent engineering. They both are similar to parts of

QbD and therefore highly relevant. They are connected to higher manufacturability,

which consists of the ability to manufacture a product as well as of the efficient adoption

(without adaptations) of developed manufacturing processes. Furthermore it was shown,

that especially cross-functional teams are very common in development of investigated

companies (Yeh et al., 2008).

2.3 Concurrent Engineering

Concurrent Engineering (CE) is very powerful in shortening the development time

(Kamrani and Vijayan, 2006). It consists of two major components, both equally

contributing to this goal: On the one hand the overlapping of activities (Terwiesch and

Loch, 1999). Different development process tasks and steps are partially or entirely

executed in parallel, which results in saving development time. On the other hand the

early involvement of other relevant organizational units (for example production and

16 The usage frequency (table 6) was assessed at 88 different high-tech companies from Taiwan (Yeh et al., 2008, p.141f). Derived from that is the influence on the overall performance of the IPD process (Table 7) (Yeh et al., 2008, p.145f).

17 The table (table 5) provides an overview of tools and techniques used for increasing efficiency during the IPD process (Yeh et al., 2008, p.140). Most of them are more of a technical nature and aim to simplify the development engineers’ work. Only very few are related to organizational topics.


marketing) (Kamrani and Vijayan, 2006). The degree of this involvement can be

measured indirectly by the product design quality manufacturability (Doll et al., 2010;

Swink, 1999). It is an indicator for the degree of fit between product design

specifications and capabilities of the manufacturing process (Adler, 1995) and thus also

indirectly to which extent the production is involved in the development of new

products. Early involvement of other organizational units gives participants the ability to

participate before decisions are taken (Koufteros et al., 2005). Additionally, information

is distributed to all participants (Koufteros et al., 2005). Thus, erroneous developments,

developments heading in the wrong direction, and double work due to missing

information coordination can be prevented and time and costs can be saved. The

involvement also increases communication and thus reduces uncertainty among team

members (Koufteros et al., 2005). Concurrent engineering is using more and more IT

tools and methods. By this it is ensured that generated knowledge and know-how is

available and can be accessed during future projects, which in turn can again shorten the

development time (Kamrani and Vijayan, 2006).

2.4 Cross-Functional Teams

In cross-functional teams (CFT) different specialists of different organizational units

find together in order to commonly work on a development project. They share

information and take decisions about product, process, and production together

(Koufteros et al., 2005). This functional and organizational diversity speeds up product

development and improves development performance (Koufteros et al., 2005; Gerwin

and Barrowman, 2002; Droge et al., 2000; McDonough, 2000). Mainly, it is ensured that

production is involved in the development and developed manufacturing processes are

viable. A common process understanding and unified visions are central in order to

prevent different interpretations and to compensate differences (Gerwin and Barrowman,

2002).

Already in the late nineties Griffin showed that about 64% of all researched projects

used cross-functional teams in development (Gerwin and Barrowman, 2002; Griffin,

1997b). This number even increases to 84% if only highly innovative projects are

considered (Koufteros et al., 2005; Griffin, 1997b). Today, this number is at least as high

and for some industries even higher.


All involved organizational units usually have their own orientations, cultures, and

languages. In cross-functional teams they all come together and must be managed. For

successful and productive collaboration in cross-functional teams some team

characteristics were identified (McDonough, 2000):

� Goals and visions define boundaries for the team in order to prevent it from

constantly re-defining itself and its tasks.

� Team autonomy enables the team to take decisions on its own.

� A general climate supporting cross-functional collaboration is needed.

Furthermore, a climate of importance and urgency of the project leads to

constructive pressure.

� The ideal team mix must be chosen to combine many different skills. By this,

different inputs can be processed in a most reasonable way. Functional diversity

“helps project team members to understand the design process more quickly and

fully from a variety of perspective, and thus it improves design process

performance. Moreover, the increased information helps the team to catch

downstream problems such as manufacturing difficulties or market mismatches

before they happen, when these problems are generally smaller and easier to fix”

(Brown and Eisenhardt, 1995, p.367).

� Strong team leadership enables the team. Furthermore, it provides directions for

the team members without hindering them to work freely.

� Top management support should be visible by commitment to the project and

the team. Top management should mainly be helping in the case of problems, it

should encourage the team and be “making things happen” (McDonough, 2000,

p.225f).

� Champions are individual team members that are indirectly valuable for the

team. They can be distinguish by special efforts in certain project steps or

processes and thus help to significantly advance the project.

� Cooperation between involved organizational and functional units facilitates the

project flow.

� Commitment of all team members is crucial for project success because it leads

to common efforts in a common direction.

� Each team member must be willing to contribute to the overall project success.

� Respect, trust, and honesty between all team members promote the team culture.


2.5 Success Factors in Product Development

The success of new and integrated product development is strongly influenced by

success factors. In order to identify them in general as well as to find those that are most

commonly listed and those with the greatest influence on performance, a broad literature

review was performed. Additional to the search for new and integrated product

development in general, the literature was especially screened for the terms “factors” and

“success factors” in combination with “NPD”, “new product development”, “IPD”,

“integrated product development”, “cross-functional teams”, “interdisciplinary teams”,

“team work”, and “concurrent engineering”. Team characteristics mentioned in the

previous chapter were also considered and in most cases added as general success factors

on team level. Table 2 provides an overview of all analyzed papers, success factors, and

their mention frequency. Selected success factors, their characteristics, and their effect

on development performance are described in detail in chapter 3.2.2.


Table 2: Literature overview of success factors for cross-functional teams.18

18 (De Clercq et al., 2011; Hirunyawipada et al., 2010; Nakata and Im, 2010; Barczak et al., 2009; Edmondson and Nembhard, 2009; Emery, 2009; Hyung-Jin Park et al., 2009; Sarin and O’Connor, 2009; Hafer and Gresham, 2008; Kim and Kang, 2008; Appelbaum and Gonzalo, 2007; Cooper and Kleinschmidt, 2007; Sarin and McDermott, 2003; Sethi et al., 2001; Holland et al., 2000; McDonough, 2000; Song et al., 1997; Denison et al., 1996; Pinto et al., 1993)

Shared, common, a

nd unified goals and

vision, supporte

d by senior management

Organizational clim

ate supportive of

(cross-functio

nal) teams

Team co-locatio

n / proxim

ity

Team Reward Top / s

enior management su

pport

Team leadersh

ipForm

al process Clear r

oles & re

sponsibilit

ies

Resources / mix

Commitment Creativ

ityCommunicatio

n / interactio

n

Trust & R

espectAutonomy Inform

al interperso

nal relatio

nship /

social cohesio

nCross-te

am coordination

Formal k

nowledge transfer p

rocess

De

Cle

rq, T

hong

pap

anl,

Dim

ov,

2011

••

••

••

•

Hirun

yaw

ipad

a, B

eyer

lein

, B

lank

son,

2010

••

•

Nak

ata,

Im

, 2010

••

••

•

Bar

czak

, G

riffin

, K

ahn,

2009

••

••

••

Edm

ond

son,

Nem

bha

rd, 2009

••

••

Em

ery,

2009

••

••

Par

k, L

im, B

irnb

aum

-More

, 2009

••

Sar

in, O

'Conn

or,

2009

••

Haf

er, G

resh

am, 20

08

••

••

••

Kim

, K

ang,

2008

••

••

••

••

••

•

Appel

bau

m, G

onz

alo, 2007

••

••

••

Cooper

, K

lein

schm

idt, 2

007

••

••

••

Sar

in, M

cDer

mott, 200

3•

Set

hi, S

mith

, P

ark

, 2001

••

••

••

Holla

nd, G

asto

n, G

om

es, 200

0•

••

••

••

••

••

••

••

McD

ono

ugh

III,

2000

••

••

••

••

Song

, M

ont

oya

-Wei

ss,

Sch

mid

t, 1

997

••

••

Den

ison,

Har

t, K

ahn,

1996

••

••

••

••

•

Pin

to, P

into

, P

resc

ott, 1993

••

••

•


2.6 Insights and Theoretical Deficits

In literature, most companies researched for their implementation of integrated

development are from high-tech, computer, electronics, and mechanical engineering

industry (Table 3) (Gerwin and Barrowman, 2002). Some examples from the chemical

industry are known, however, companies from the highly regulated pharmaceutical

industry are missing.

Analyzed companies traditionally operate as well in the B2B as in the B2C domains

(mainly in the mechanical engineering and mechanical and electrical components,

standard industrial code SIC 35 and 36) (Tessarolo, 2007). Especially B2B companies

share special motives for applying IPD methods and tools, e.g. the supplier shortens

development time in order for the buyer to be able to incorporate the part into its final

product without delay (Tessarolo, 2007). In B2C and other companies, shorter

development times are competitive advantages over their competitors (Naveh, 2005;

Droge et al., 2000; Swink, 2000). Whereas in the pharmaceutical industry the main goals

are (1) preventing delays during technology transfer and at product launch resulting in

shorter patent protection time, (2) avoiding time and cost intensive process adaptations,

(3) developing efficient and robust manufacturing processes and keeping manufacturing

prices low, and (4) gaining a high market share by being first-to-market (Droge et al.,

2000).

For the pharmaceutical industry, the interface of development and production is not

adequately defined. A scientific consideration is missing, defining when and how they

should intensify collaboration in order to make the development of the manufacturing

process more efficient. Moreover, the launch sites’ role is not described in detail and a

model is missing, stating when to integrate those in the development process.

Furthermore, a holistic process model that combines IPD principles with the

development process and characteristics of the highly regulated pharmaceutical industry

is missing.


Table 3: Overview of investigated companies and industries in literature.

Publication No. of

companies

Research focus (industry, field of operation)

Danese & Filippini, 2010 186 Worldwide mechanical, electronic and transportation companies

Doll et al., 2010 205 US and Canadian metal, machinery, mechanical, electronic and transportation companies

Krüger et al., 2010 1 Sports equipment

Yeh et al., 2008 88 High-tech firms

Tessarolo, 2007 154 Italian and Japanese business-to-business companies

Boyle et al., 2006 269 US and Canadian machinery, computer, electronics, electrical, appliance and transportation organizations

Koufteros et al., 2005 244 Metal, machinery, electronic, and transportation companies

Naveh, 2005 1 Hi-tech electronics

Vandevelde & Dierdonck, 2003 25 Belgian food products, textiles, machinery, chemical and photographic material, electronics, motor vehicles, railway locomotives, and plastic products companies

Droge et al., 2000 57 US suppliers to big car companies

McDonough, 2000 112 Consumer goods, services and B2B companies

Morgan Swink, 2000 136 US manufacturing industry

Tatikonda & Rosenthal, 2000 57 Firms making assembled products

Lynn, Skov, & Abel, 1999 95 High-tech

Terwiesch & Loch, 1999 102 Electronic firms

Kusunoki, Nonaka, & Nagata, 1998

200 Japanese system-based firms

Kusunoki et al., 1998 289 Japanese material-based firms

Griffin, 1997a 21 21 divisions of 11 firms

Hartley, Zirger, & Kamath, 1997

79 Assembled parts firms

Barnett & Clark, 1996 1 Manufacturer of advanced polymers

Zirger & Hartley, 1996 44 Electronic firms

K. M. Eisenhardt & Tabrizi, 1995

36 Computer firms

Cooper & Kleinschmidt, 1994 103 21 chemical firms

Beth, Jeffrey, & John, 1993 62 Medium-sized US general hospitals

Clark & Fujimoto, 1991 20 Auto firms

Schoonhoven, Eisenhardt, & Lyman, 1990

83 Chip firms

Larson & Gobeli, 1989 547 Firms in US and Canada

34

In summary, the following insights and consequences for this research can be drawn:

� New Product Development concepts are widely applied and their

implementation as well as supportive tools, methods, and techniques are

extensively described.

� The superior performance of Integrated Product Development compared to NPD

was demonstrated in multiple empirical studies.

� Cross-functional Teams is an organizational method enabling better integration

of production into the development process.

� Through more intense involvement of production into the development process,

a more stable and efficient process is transferred from development to

production.

� There are no established concepts of how to apply integrated development to the

pharmaceutical industry.

3 Development of a Reference Framework

In chapter 3 all aspects from literature reviewed in chapter 2 are put together and

transformed into a reference framework. First, the framework is introduced in general.

This is followed by detailed descriptions of all components as well as the effect on

performance.

The reference framework is used to guide all research relevant for this dissertation. The

following industry survey and case studies are based on this framework.

3.1 The Framework in General

Figure 12: Reference framework for integrated development.

Based on the findings in chapter 2, a simple and comprehensive reference framework

was derived (Figure 12). The framework is originally divided into three main

components: (1) deals with concurrent engineering as important method to speed up

development projects and consists of the three sub-components parallelization, cross-

functional teams, and tools & methods, (2) describes success factors that are crucial for

successful implementation and operation, and (3) defines the optimal organization for


successful integrated development. They all have different characteristics and effects on

development performance. In combination they form an effective framework for

integrated development in the pharmaceutical industry. All topics are discussed in detail

in the next section.

3.2 Components in Detail

3.2.1 Concurrent Engineering

Concurrent engineering has proven to be a very effective method to shorten development

time and thus also time-to-market. This is achieved mainly by the parallelization of

different process steps and by using cross-functional teams in development.

Furthermore, concurrent engineering is supported by specific tools and methods.

Parallelization means doing development steps simultaneously instead of waiting for a

previous step to be finished before beginning a new one. This might result in additional

re-work and additional loops due to changes in specifications, but in total development

time decreases. Tools and Methods are used to structure and focus the work during the

development process. They are very useful in order to detect, eliminate, and prevent

errors in technical development.

Shorter development time would result in a longer time for patent protection of the

product (drug) and therefore would be commercially beneficial for pharmaceutical

companies. First evaluations showed that for the pharmaceutical industry the focus of

concurrent engineering lies on cross-functional teams, whereas both parallelization and

tools and methods are not considered further due to the following reasons:

� Compared to other industries, companies in the pharmaceutical industry still are

an assembly of functions rather than a seamless integrated operation. Various

functions and departments co-exist but do not or only to a small extent

collaborate. This mainly applies to the pharmaceutical industry’s central value

stream of research – development – production – commercialization. Thus there

is an immense potential for work in cross-functional teams.

� Today’s development process is already parallelized to some degree (e.g. clinical

and technical development run in parallel). Due to regulatory requirements and a

very high attrition rate, further parallelization is not possible in the

Development of a Reference Framework 37

pharmaceutical industry. E.g. there would be no benefit in starting technical

development for commercial manufacturing before it is proved that the product

is safe and effective.

� Parallelization can result in compliance issues with standard operations

procedures (SOP): often it is defined in SOPs that following activities can only

begin upon completion of current activities.

� Tools & methods (e.g. quality function deployment QFD, design of experiment

DOE, failure model and effect analysis FMEA, design for six sigma DFSS,

benchmarking, design for X, brainstorming, computer-aided systems, fishbone

analysis, etc.) focus on technical improvements and are thus out of this work’s

scope (Yeh et al., 2008).

� Described tools and methods are often used in practice in the pharmaceutical

industry. Therefore, there exists plenty of literature about the use of them (Yeh

et al., 2008).

� This work’s focus is of conceptual rather than technical nature and on the level

of the overall set-up for managing integrated development.

� Both topics are already widely covered in the literature (Yeh et al., 2008;

Kamrani and Vijayan, 2006; Terwiesch and Loch, 1999).

Therefore, concurrent engineering is recognized as a central concept of integrated

development for other industries; however, for the pharmaceutical industry it can be

reduced to cross-functional teams or cross-functional collaboration. Furthermore, the

focus of this work is on organizational and managerial rather than technical and

methodical aspects and thus parallelization and tools and methods are not considered

further.

3.2.1.1 Cross-Functional Collaboration

Cross-functional collaboration including the management, the composition, and the

behavioral aspects are one of the central aspects of integrated development. This

component is to a great extent influenced by both other components “success factors”

and “organization”, as they define the teams’ supportive environment.

The teams are composed of representatives of all major functions and departments

involved in development projects. At every process step they are under clear

management and responsibility. The team composition varies along the development


process in order to represent the respective involvement and roles. However, it is crucial

to not only include those with direct contributions, but also those, whose interests

become requirements later in the process.

The team composition varies during the development process. Along a generic

development process, it is defined which organizational unit or function contributes to a

process step in what function, to what extent, and in collaboration with whom. Figure 13

shows a fictional idealized form of contribution and collaboration along the development

process. It is obvious, that contribution of early functions decrease over time while it

increases for late functions. However, in an ideal setting, most functions are to some

extent involved in all development steps.

Figure 13: Concept of optimal collaboration along the development process.

3.2.2 Success Factors

Success factors are further divided into three groups - context, enabling, and team

behavior factors (Figure 14) (McDonough, 2000). Context factors set the right

environment for integrated development (Table 4). Enabling factors facilitate context

factors and make them effective (Table 5). Both context and enabling factors are

organizational prerequisites; however, they do not encompass collaboration, which is

Early Process

Development

(lab scale,

feasibility)

Final

Formulation

Development

Pilot Scale Full ScaleTechnology

TransferValidation Registration Launch

Post-Launch

Improvements/

Changes &

Maintenance

Early Stage

Development

Late Stage

Development

Transfer

Organization

Launch Site

Commercial

Production


covered by team behavior factors (Table 6). They describe how collaboration in teams

can be most effective.

Figure 14: Categorized success factors from literature, showing the interrelationship and the

effect on performance.

The following tables list all success factors as well as their detailed characteristics and

impact on performance as they are used in this reference framework (Table 4, Table 5,

Table 6).

Context� Shared, common, and unified goals

and vision, supported by senior

management

� Organizational climate supportive

of (cross-functional) teams

� Team co-location / proximity

� Team reward

Team behavior� Commitment

� Creativity

� Communication / interaction

� Trust & respect

� Autonomy

� Informal interpersonal

relationship / social cohesion

� Cross-team coordination

Enabler� Top management support

� Team leadership

� Formal process

� Clear roles & responsibilities

� Resources / mix

� Formal knowledge transfer process

Performance


Table 4: Context success factors.

Imp

act

on

Per

form

an

ce

Act

ions

and

co

ntr

ibu

tio

ns

are

tak

en i

n a

way

that

th

e ov

eral

l pro

ject

ben

efit

s. T

hu

s le

ss r

e-

wo

rk i

s n

eeded

an

d p

roje

ct e

xec

uti

on

is

sped

up

.

Cro

ss-f

unct

ion

al

coll

abo

rati

on

en

sure

s th

at

req

uir

emen

ts f

urt

her

do

wn t

he

pro

ject

pat

h a

re

con

sid

ered

al

read

y

at

an

earl

y

stag

e of

the

pro

ject

. T

hu

s le

ss r

e-w

ork

is

req

uir

ed a

nd

no

use

less

lo

ops

occ

ur

du

rin

g p

roje

ct e

xec

uti

on

.

Inte

ract

ion

s ar

e le

ss f

orm

al a

nd c

an b

e ar

ran

ged

wit

hin

sh

ort

ti

mes

. U

pco

min

g

issu

es

can

b

e

dis

cuss

ed d

irec

tly

wit

hou

t ad

min

istr

atio

n.

This

spee

ds

up

pro

ject

ex

ecu

tio

n.

Mo

re t

eam

wo

rk a

nd

act

ing

in

the

sense

of

the

ov

eral

l pro

ject

ou

tco

me

lead

s to

bet

ter

pro

ject

per

form

ance

.

Ch

ara

cter

isti

cs

Ov

eral

l g

oal

s ar

e se

t fo

r dev

elop

men

t p

roje

cts.

Th

is e

nsu

res

that

all

tea

m m

emb

ers,

ev

en w

hen

on

ly

con

trib

uti

ng

at

ce

rtai

n

ph

ases

, h

ave

no

t

on

ly t

hei

r o

wn

co

ntr

ibuti

on

’s s

ucc

ess

in m

ind

,

bu

t ra

ther

ov

eral

l p

roje

cts

succ

ess.

Wo

rk i

n c

ross

-fu

nct

ion

al t

eam

s is

fost

ered

by

the

org

aniz

atio

n

and

em

plo

yee

s ar

e h

eav

ily

enco

ura

ged

to

en

gag

e in

cr

oss

-fu

nct

ion

al

acti

vit

ies.

Ad

dit

ion

al r

eso

urc

es n

eeded

for

this

coll

abora

tio

n a

re r

ead

ily

pro

vid

ed.

Tea

ms,

in

th

is

case

m

ainly

d

evel

opm

ent,

tran

sfer

, an

d

man

ufa

ctu

rin

g

team

s,

are

ph

ysi

call

y

co-l

oca

ted

o

r at

le

ast

in

clo

se

pro

xim

ity

. T

he

resu

lts

are

short

w

ays

for

ph

ysi

cal

inte

ract

ion

an

d s

po

nta

neo

us

mee

tin

gs

and

dis

cuss

ion

s.

Tea

ms

are

rew

ard

ed fo

r th

eir

per

form

ance

as

team

ra

ther

th

an

as

indiv

idu

als.

F

urt

her

more

,

team

s ar

e re

war

ded

acc

ord

ing

to

ov

eral

l p

roje

ct

succ

ess.

Su

cces

s F

act

or

Sh

ared

, co

mm

on

, an

d u

nif

ied

go

als

and

vis

ion

,

sup

po

rts

by

sen

ior

man

agem

ent

Org

aniz

atio

nal

cl

imat

e su

pp

ort

ive

of

cro

ss-

fun

ctio

nal

tea

ms

Tea

m c

o-l

oca

tio

n /

pro

xim

ity

Tea

m r

ewar

d


Table 5: Enabling success factors.

Imp

act

on

Per

form

an

ce

Dec

isio

ns

are

tak

en f

aste

r an

d r

eso

urc

es a

re

pro

vid

ed r

eadil

y.

This

has

dir

ect

effe

ct o

n

fast

er a

nd

more

eff

icie

nt

pro

ject

exec

uti

on

.

As

a re

sult

of

go

od

lea

der

ship

pro

ject

s ar

e

exec

ute

d m

ore

eff

icie

ntl

y a

nd

fas

ter.

Pro

ject

s ca

n b

e pla

nned

an

d e

xec

ute

d v

ery

accu

rate

ly. E

xec

uti

on

is

not

hal

ted

bec

ause

on

ly v

ery

few

ad-h

oc

dec

isio

ns

hav

e to

be

tak

en.

Th

e pro

cess

is

wel

l kn

ow

n t

o a

ll

par

tici

pan

ts a

nd

th

us

runs

ver

y s

mo

oth

ly.

Ho

wev

er, in

th

e ca

se o

f u

nfo

rese

en e

ven

ts,

alte

rati

on

s to

th

e in

itia

l pla

n a

re a

big

dea

l

and

ad-h

oc

dec

isio

ns

take

lon

ger

.

Cle

ar d

irec

tiv

es p

rovid

e ben

efic

ial

gu

idan

ce

to p

roje

ct e

xec

uti

on

, w

hic

h i

n t

urn

pre

ven

ts

dis

cuss

ion

s ab

out

sin

gle

tea

m m

emb

ers’

par

ts.

Cap

abil

itie

s an

d k

no

wle

dge

of

dif

fere

nt

team

mem

ber

s co

mple

men

t ea

ch o

ther

an

d l

ead

to

an o

pti

mal

tea

m p

erfo

rman

ce.

Kn

ow

led

ge

can

be

re-u

sed

wit

ho

ut

hav

ing t

o

be

coll

ecte

d n

ew f

or

each

pro

ject

. A

ll

kn

ow

led

ge

contr

ibuto

rs k

no

w h

ow

to

mak

e it

avai

lable

an

d h

ow

to

acc

ess

it.

This

im

pro

ves

kn

ow

led

ge

buil

d-u

p a

nd

thu

s p

roje

ct

exec

uti

on

.

Ch

ara

cter

isti

cs

Sen

ior

man

agem

ent

sup

port

s an

d e

mp

ow

ers

team

s in

th

eir

effo

rt t

o e

ffec

tiv

ely

co

ntr

ibute

to d

evel

op

men

t p

roje

cts.

Th

ey a

lso

sup

port

the

idea

of

an i

nte

gra

ted

app

roac

h i

n g

ener

al

and

thu

s al

so p

rovid

e ad

dit

ion

al r

eso

urc

es

nee

ded

for

succ

essf

ul

and

eff

icie

nt

pro

ject

exec

uti

on

.

Sp

ecia

l ef

fort

s ar

e pu

t on

pro

vid

ing

go

od

team

lea

der

ship

. R

esp

onsi

ble

em

plo

yee

s ar

e

care

full

y s

elec

ted

an

d e

xte

nsi

vel

y t

rain

ed.

Th

e d

evel

opm

ent

pro

cess

fo

llo

ws

a cl

ear

def

init

ion

. D

evia

tio

ns

of

this

pat

h a

re n

ot

allo

wed

and

pro

ject

ex

ecuti

on

is

ver

y f

orm

al

rath

er t

han

fle

xib

le a

nd

sp

on

tan

eou

s. A

d-h

oc

alte

rati

on

s ar

e n

ot

sup

pose

d t

o o

ccu

r.

Ro

les

and

res

pon

sib

ilit

ies

in p

roje

cts

are

def

ined

an

d t

eam

mem

ber

s ar

e in

form

ed.

Sp

ecia

l ef

fort

s ar

e in

ves

ted

in

ach

iev

ing a

ben

efic

ial

mix

of

cap

abil

itie

s an

d k

no

wle

dg

e

insi

de

the

team

.

Kn

ow

led

ge

is t

ran

sfer

red

in a

form

al a

nd

clea

rly

def

ined

pro

cess

bet

wee

n t

eam

s,

fun

ctio

ns,

and

dep

artm

ents

all

work

ing

on

the

sam

e o

r o

n d

iffe

ren

t p

roje

cts.

Su

cces

s F

act

or

Top

/ s

enio

r m

anag

emen

t su

pp

ort

Tea

m l

ead

ersh

ip

Fo

rmal

pro

cess

Cle

ar r

ole

s &

res

po

nsi

bil

itie

s

Res

ou

rces

/ m

ix

Fo

rmal

kn

ow

led

ge

tran

sfer

pro

cess


Table 6: Team behavior success factors.

Imp

act

on

Per

form

an

ce

Les

s dis

cuss

ion

s an

d d

iscr

epan

cies

occ

ur

and

thu

s te

am p

erfo

rman

ce i

s no

t h

ind

ered

.

Cre

ativ

e w

ork

lea

ds

to n

ew c

on

cep

ts w

hic

h

in t

urn

can

pro

ve

to b

e m

ore

eff

icie

nt

than

usi

ng

est

abli

shed

ap

pro

aches

an

d

tech

no

logie

s.

Th

rou

gh

hea

vy i

nte

ract

ion

th

ere

is m

ore

agre

emen

t o

n t

eam

act

ion

s an

d d

ecis

ions.

Sh

ared

info

rmat

ion

hel

ps

pre

ven

t d

oub

le

wo

rk.

Th

ere

is a

n o

ver

all

bet

ter

clim

ate

in t

he

team

.

Tea

m m

ember

s fe

el c

om

fort

able

wo

rkin

g i

n

the

team

and

can

ther

efo

re p

erfo

rm b

ette

r.

Pro

ject

s ar

e ex

ecute

d f

aste

r b

ecau

se

dec

isio

ns

are

gen

eral

ly t

aken

fas

ter.

Per

form

ance

of

team

mem

ber

s im

pro

ves

due

to t

he

emp

ow

erm

ent

that

they

can

tak

e

dec

isio

ns

them

selv

es.

Em

plo

yee

s en

joy

th

e te

am w

ork

an

d a

re t

hus

wil

lin

g t

o p

erfo

rm b

ette

r.

Kn

ow

led

ge

and

lea

nin

gs

are

shar

ed w

hic

h i

n

turn

can

red

uce

rec

urr

ing

wo

rk.

Usi

ng

a

kn

ow

led

ge

bas

e sp

eeds

up

pro

ject

ex

ecu

tio

n.

Ch

ara

cter

isti

cs

All

tea

m m

emb

ers

are

hig

hly

co

mm

itte

d t

o

the

team

and

its

act

ions

and d

ecis

ion

s.

Tea

m m

ember

s ar

e en

cou

rag

ed t

o w

ork

crea

tiv

ely

rat

her

th

an f

oll

ow

ing

a

stan

dar

diz

ed a

nd f

orm

al p

ath

.

Co

mm

un

icat

ion

an

d i

nte

ract

ion

bet

wee

n

team

mem

ber

s is

occ

urr

ing

rat

her

th

an

mem

ber

s w

ork

for

them

selv

es i

nd

ivid

ual

ly.

Fu

rther

mo

re,

all

team

mem

ber

s ar

e in

form

ed

of

all

acti

ons

tak

en i

n t

he

team

.

Tea

m m

ember

s tr

ust

an

d r

esp

ect

each

oth

er.

Qu

alif

ied

tea

m m

emb

ers

can

tak

e d

ecis

ion

s

them

selv

es.

On

ly f

or

maj

or

dec

isio

ns

and

alte

rati

on

s th

e te

am’s

sup

erv

isin

g c

om

mit

tee

is c

on

sult

ed.

Tea

m m

ember

s n

ot

on

ly w

ork

to

get

her

form

ally

bu

t sh

are

info

rmal

an

d p

erso

nal

rela

tio

nsh

ips.

Th

rou

gh

so

cial

tea

m e

ven

ts,

team

mem

ber

s ar

e m

ore

fri

end

s th

an m

ere

co-w

ork

ers.

Act

ions,

dec

isio

ns,

and

kn

ow

led

ge

is

coo

rdin

ated

an

d s

har

ed b

etw

een

dif

fere

nt

team

s. E

xch

ang

e b

etw

een

tea

ms

is f

ost

ered

and

enco

ura

ged

, id

eall

y e

ven

sta

nd

ard

ized

in

an e

ith

er f

orm

al o

r ra

ther

info

rmal

way

,

dep

endin

g o

n t

he

com

pan

y’s

gen

eral

cult

ure

.

Su

cces

s F

act

or

Co

mm

itm

ent

Cre

ativ

ity

Co

mm

un

icat

ion

/ i

nte

ract

ion

Tru

st &

res

pec

t

Au

ton

om

y

Info

rmal

inte

rper

son

al r

elat

ion

ship

/ s

oci

al

coh

esio

n

Cro

ss-t

eam

co

ord

inat

ion


3.2.3 Organization

The organization in place during the development process has crucial influence on its

outcome. It mainly determines success and outcome of cross-functional collaboration.

Early and late stage development (responsible for process development) are both part of

the development organization. The responsible launch site belongs to production, but it

is separate from but affiliated with routine production. It maintains close connections

with development in order to exchange knowledge. Organizationally between

development and production is a so called Transfer Organization: it is a team or

organization mainly responsible for the transfer from development to production.

Compared to traditional launch sites, a Transfer Organization is part of production but is

not affiliated with routine production. Thus it is more closely connected to development.

During its time of involvement in the development process, the Transfer Organization

represents production’s interest. Both the launch site and the Transfer Organization can

also be one combined function instead of two separated ones.

3.2.4 Effects on Performance

All components of the reference framework combined describe the ideal set-up for

successful integrated development. Integrated development is only better than the current

state if it has significant effects on performance. For this particular framework,

performance is measured by (1) the manufacturing process efficiency at launch, (2) the

amount of post-launch changes to the manufacturing process, (3) the transfer efficiency,

and (4) the launch efficiency. As a direct result of applying this framework, development

will be more efficient as well as effective and performance will increase.

4 Integrated Development in Practice

This chapter describes the empirical investigation that was undertaken in order to

evaluate the reference framework. First, it is described how the survey was set up and

how it was conducted. Second, the general results of the survey are outlined. Third, some

special aspects identified during the survey are explained. Finally, general findings and

insights are summarized.

4.1 Industry Survey: An Empirical Investigation

4.1.1 Industry Survey – Questionnaire

Figure 15: Adapted reference framework used for the industry survey.

To assess the current state of integrated development and cross-functional collaboration,

an international industry survey was conducted in the first half of 2012. As mentioned in

chapter 1.3.3, this survey’s scope was limited to drug product development. Data

generation was done with two questionnaires based on the previously described

framework. In total, they both based on the adapted reference framework (Figure 15) and

were divided into eight sections, which are further described in the following paragraphs.


They only differ in the medium used: one was sent out as PDF document created with

TeleForm19 while the other was implemented in an online survey tool20. The PDF-based

questionnaire used for the survey is depicted in the appendix.

Section A: In this general section data about the participant’s company, function,

department, location, and work experience was gathered.

Section B: This section contained questions about the participant’s company: size

(number of employees), amount of employees in development and production (both

percentages), revenue and percentage of R&D expenditures for the years 2009, 2010,

and 2011, number of CMC development and manufacturing sites worldwide, and fields

it operates in (branded drugs / innovator, generics, OTC, biotech, or other).

Additionally, the average overall development costs and times were determined.

Section C: This section contained four questions about the perceived effect and benefit

of integrated development. Also, one question assessed the participant’s company’s

degree of working in an integrated way during development projects.

Section D: This section contained questions about the organizational set-up of the

participant’s company or department: way of working in development teams,

organizational unit responsible for process development, existence and organizational

affiliation of a transfer group, existence and number of launch sites, existence and

organizational affiliation of launch groups, similarity of equipment at pilot and launch

sites, process development group’s capability and equipment knowledge of first and

secondary manufacturing sites. Additionally, the composition of CMC teams was

determined.

Section E: It contained questions about tools used during development, mostly related to

QbD: to what extent a shared knowledge management solution, minimum QbD elements,

DoE, and PAT are used during pilot scale, full scale, technology transfer, launch, and

routine production. Further the reasons for minimum QbD, DoE, and PAT application

were requested.

Section F: This section consisted of a RACI-matrix in which the degree of involvement

of selected member groups of cross-functional teams along the previously described

19 Verity TeleForm Version 9.1, for more information visit http://www.cardiff.com/products/teleform/index.html

20 EFS Survey, for more information visit www.unipark.de

Integrated Development in Practice 47

pharmaceutical development process (Figure 21) was entered. Further elements assessed

include: a rating of the transfer between process steps, the duration of each process steps

(in months), the average amount of work hours for each process steps (for development

and production staff), the average amount of employees working on each process step

(for development and production staff). Also, it was asked when (clinical) POC, start of

clinical phase III, and final decision on first manufacturing site occurred. An additional

field allowed providing comments about the RACI-matrix.

Section G: In this section 13 statements, each representing one of the previously

described common success factors of cross-functional collaboration identified in

literature, were rated on a 5-point Likert-scale (from “strongly disagree” to “strongly

agree”). Additionally, there was an open text field to add further success factors;

however, it was not used by any of the participants.

Section H: The last section was about metrics. First, it was asked how many active

development projects currently were in certain clinical phases (clinical phase I, clinical

phase IIa, clinical phase IIb, clinical phase III, and launch). It was then rated whether

time, cost, and quality objectives of pilot scale development, full scale development,

technology transfer, product launch, and manufacturing process efficiency of all

products launched during the last five years were met. The rating was based on a 5-point

Likert-scale (“objectives not met” to “objectives completely met”). The second question

was about how many process adaptations and process changes (post-approval changes,

have to be filed at regulatory authorities) occurred on average if all products launched

during the last five years were considered. Again, a 5-point Likert-scale (“none”, “very

few (1 in 10 launches)”, “few (1 in 5 launches)”, “some (1 in 3 launches)”, “many (1 or

more in each launch)”) was used for the rating. Also, it was asked whether there had

been an improvement regarding process development compared to ten years ago. It also

contained an open text field to enter any additional data, which, as expected, was used

only were rarely.

4.1.2 Industry Survey – Data Sample

The questionnaire was sent out to more than 1,200 representatives of pharmaceutical,

biotech, generics, and chemical companies from all over the world. The representatives

were randomly identified via internet and business network searches and chosen due to


their function either in Development, Production, Quality, or Regulatory departments.

However, representatives from the latter two departments did not feel adequate to

participate and thus there were much fewer potential participants. Each participant was

allowed a timeframe of two months to respond to the survey.

The response rate of roughly 3% is rather low. This can be attributed to the perceived

sensitive nature of some information asked for. As especially data about on-going

development projects is kept confidential, many contacted individuals decided not to

participate and thus not be conflicted with handing out confidential data. This issue was

known beforehand and addressed with great care and devotion: The survey was

completely anonymous and the questionnaire was designed in a way not to demand for

sensitive data as well as leaving the possibility to enter blank data. Yet, some questions

were still perceived to ask for semi- or full-sensitive data which drove many potential

participants to halt participation.

In total, there were 37 responses representing 29 companies. Out of all responses, 23

came from Development, 9 from Production, 0 from Regulatory, 2 from Quality, and 3

from others (“Scale-up and Transfer”, “all of the above”, and “University Spin-Off”)

(Figure 16). Participating companies were based in the following countries: Switzerland

(8), Germany (8), USA (10), Netherlands (2), India (2), Austria (2), Italy (2), Israel (1),

and n/a (2) (Figure 17). 12 participants are working for companies with less than 250

employees, whereas 11 participants are working for companies with more than 20,000

employees (Figure 18). Of all participants, 24 indicated to operate in the field of branded

drugs, 10 in generics, 9 to produce OTC (over-the-counter) drugs, 22 in biotech, and 7 in

other fields (“Excipients”, “Vaccines”, “Cell therapy”, “Excipients for solid dosage

forms”, “Glass packaging”, “Agrochemical innovator”, and “R&D in support of NCEs,

Generic etc”) (Figure 19). It is noteworthy that all participating companies were engaged

in R&D as well as manufacturing activities. The participants’ experience in the current

position ranged from less than one to over six years – on average it amounted to four

years.


Figure 16: Overview of participants’ departments (n=37)

Figure 17: Overview of participants’ geographical locations (n=37)

Figure 18: Overview of participants’ company size (n=35)

Figure 19: Overview of participants’ company operating fields (n=35)

Development62%

Production24%

Regulatory0%

Quality6%

others8%

Switzerland22%

Germany22%

USA27%

Netherlands6%

India5%

Israel3%

Austria5%

Italy5%

n/a5%

up to 25034%

251-1,0003%

1,001-5,00017%

5,001-20,00014%

over 20,00032%

Branded Drugs / Innovator

33%

Generics14%

OTC12%

Biotech31%

other10%


Figure 20: Experience of participants in years (n=35)

The sample contained all different kinds of companies: from small, rather local up to

large international companies, as well as from highly specialized to very broadly

operating companies. Also in terms of geographical distribution, most major markets

(North America, Europe, and India) were represented. Additionally, there were

participants from different departments and functions (e.g. development, production,

etc.) and with different level of experience. All in all this sample is a good representation

of today’s companies of the pharmaceutical industry and can therefore be used to derive

general statements about today’s state of the industry regarding integrated development.

4.1.3 Measuring Performance

In literature on new or integrated product development, performance of investigated

processes, tools, and measures is usually assessed as the amount of successful

development projects, the market success of new products, or by comparing time and

cost of development projects (Cooper and Kleinschmidt, 1997; Griffin, 1997a).

However, since the focus of our research is not on overall development, but rather on the

development of commercial manufacturing processes, such a holistic view would distort

the effects of interest, as they would be conflated with other non-influenceable events

(e.g., low drug safety or efficacy). For this reason, a new indicator of performance was

required.

In discussion with experienced industry representatives, it was decided to assess whether

development stage objectives were met. For this, the relevant process development

stages were taken from the general pharmaceutical Drug Product development process

(Figure 21). The following process steps represent these development stages: pilot scale,

full scale, technology transfer, and launch. Additionally, it was decided to include the

0 2 4 6 8 10 12 14

<1 year

1-2 years

3-4

5-6 years

>6 years


manufacturing process efficiency (in routine production). In order to get a more detailed

picture, these objectives were further divided into time, cost, and quality objectives and

assessed separately.

Figure 21: The general pharmaceutical Drug Product development process

For each analyzed process step a general performance-index (PIi) was generated, as

shown in equation (1). It was decided to apply different weights to time (T), cost (C),

and quality (Q):

Quality standards are very high in pharmaceutical companies and have to be maintained

at such a level. Therefore, the industry is very well adapted to providing high quality.

The quality part of objectives was thus only weighed wQ=0.3.

Time is a very important factor in product development. However, timelines are

influenced by clinical development activities (e.g., clinical trials). Only in the case of

early clinical success, time also gains importance in technical development. Accordingly,

the time part of objectives was weighed wT=0.6.

Despite the fact that the main part of development costs is determined by clinical trials,

the industry is also very cost-sensitive when it comes to technical development. Cost-

related objectives were mentioned to be the most important by all industry

representatives and therefore weighed wC=1.0.

�� =(�� ∗ �) + (�� ∗ � ) + (�� ∗ ��)

� + � + �� (1)

The performance-indices of all five process steps (PI1-5) were then combined into a

weighted average to get an overall performance-index (PItotal), as shown in equation (2).

Early Process

Development

(lab scale,

feasibility)

Final

Formulation

Development

Pilot Scale Full ScaleTechnology

TransferValidation Registration Launch

Post-Launch

Improvements/

Changes &

Maintenance


According to their importance and influence on overall performance, they were assigned

different weights:

Pilot scale as the first process step was considered to be the most important. In this step,

early foundations of future processes are determined and basic knowledge is gathered.

The more efforts at this stage are target-focused, the less effort is needed in later stages.

Thus, it was weighed w1=1.0.

The second and third process steps, full scale and technology transfer, are still important

especially regarding scale-up of the previously developed process. They both were

assigned a weight of w2=0.6 and w3=0.6.

The second to last step, launch, is considered to be less critical as it is fully based on

preceding efforts. It was thus weighed w4=0.2. This also applies to manufacturing

process efficiency, which resulted in a same weight w5=0.2.

�� =∑ (�� ∗ ��)��

∑ ��

(2)

Additionally, in order to measure the efficiency of launched manufacturing processes, it

was assessed how many process adaptations (PA) and changes (PC) occurred on average

during the first three years after launch. Process changes imply immense effort with

regulatory authorities, resulting in time loss and high costs, therefore these were weighed

wPC=0.6 in comparison to wPA=0.4 for process adaptations. The performance index PI

was still considered to be the most important and objective measure, and thus weighed

wPI=1.0. These three indicators were combined to form an indicator of overall

performance (P), as shown in equation (3). Thus, the overall performance (P) gives an

indication how successful technical development, and especially process development,

is.

� =(�� ∗ ��) + (�� ∗ ��) + (�� ∗ �� )

�� + �� + �� (3)


Table 7: Participants with the corresponding values of performance (P) (n=37)

P

Company J 0.76

Company J 0.75

Company Q 0.73

Company R 0.68

Company L 0.67

Company E 0.66

Company K 0.65

Company T 0.64

Company U 0.60

Company A 0.57

Company E 0.56

Company J 0.49

Company B 0.47

Company J 0.47

Company N 0.43

Company I 0.40

Company F 0.39

Company Q 0.30

Company Y 0.26

Company G 0.25

Company C 0.00

Company D 0.00

Company H 0.00

Company H 0.00

Company M 0.00

Company O 0.00

Company P 0.00

Company S 0.00

Company O 0.00

Company K 0.00

Company V 0.00

Company W 0.00

Company X 0.00

Company Z 0.00

Company AA 0.00

Company AB 0.00

Company AC 0.00


The overall performance (P) is a value between 0 and 1, with higher numbers indicating

a better overall performance.

From all 37 participants, only 20 had provided enough data to reliably calculate

performance (listed in Table 7

Participants with an overall performance of higher than 0.66 are considered to be high

performers. This leads to a high performer quota of 25%. Companies with multiple

participants are not grouped, but treated individually. Interestingly, the 5 high performers

were formed by 4 companies.

The overall performance (P) gives an indication how successful technical development,

especially process development, is.

4.1.4 Measuring Integration

For all participants, a corresponding value of “integration“ (I) was calculated. This

indicator represents the degree of cross-functionality within development projects on the

one hand, and the degree of implementation and application of principles of integrated

development described earlier on the other hand.

It was assessed how integrated participants rated their own development (ID) as well as

whether they work in cross-functional teams (CF). These two values were then combined

into a weighted average, as shown in equation (4). The self-assessment of the own

development was weighted wID=1, whereas the degree of work in cross-functional teams

was weighted wCF=0.3. This was mainly due to the fact that work in cross-functional

teams is only one part of integrated development concepts, and thus of less influence. It

has to be noted that both values used are solely based on self-assessments participants

and therefore reflect a subjective perception.

� =(�� ∗ ��) + (�� ∗ � �)

�� + � � (4)


Table 8 shows high performers and their corresponding values of integration. The values

are all between “high” (0.8) and “very high” (1). Thus it can be concluded that high

perceived integration is closely associated with high process development performance.

Table 8: High performing participants with the corresponding value of integration (n=5)

P I

Company J 0.76 1.00

Company J 0.75 0.85

Company Q 0.73 0.80

Company R 0.68 0.97

Company L 0.67 0.93

The identified correlation of high performance and high integration is confirmed by a

correlation analysis. Pearson’s correlation coefficient of both variables is ρ=0.75 (Table

9). Since there are 20 valid participants, the degree of freedom is df=18 (df=n-2). This

leads to a critical correlation coefficient ρcrit=0.679 for an alpha level of p=0.01. This

means that the identified relationship in the sample reflects a relationship in the whole

population he sample was taken from. Only in 1 out of 100 cases the identified

relationship in the sample is incorrect for the population. Because of this statistical

relevance, the Pearson correlation analysis shows a highly significant correlation

between performance and integration. A linear regression also shows a clear correlation

of both variables (Figure 22).

Table 9: Correlation matrix for performance and integration (n=20)

Performance Integration

Performance 1

Integration 0.75* 1

* p < 0.01


Figure 22: Linear regression of performance and integration (n=20)

4.2 Special Aspects

4.2.1 General Findings about the Pharmaceutical Industry

The international industry survey was also used to gather general information about the

current state of the pharmaceutical industry. On average, around 31.5% of all employees

of pharmaceutical companies work in development and 30.2% in production (Figure 23).

The remaining 38.3% belong to Marketing, Regulatory, Quality (although both

Development and Production already contain a fair share of quality employees), and

supporting areas such as legal, IT, infrastructure, etc. Expenditures for R&D have

slightly increased from around 29 to 31.6% (Figure 24). This is caused by ever

increasing efforts to find new drugs.

There is a clear difference when comparing innovative or R&D intensive companies with

companies operating in the fields of generic and OTC products: the R&D expenditures

are clearly over 30% for the first group, whereas the latter’s R&D expenditures are

around 17% (Figure 25). Regardless of their amount, in general for both groups the

expenditures remained similar with a light increase over the last three years.

y = 0.7652x + 0.4137R² = 0.566

0.30

0.40

0.50

0.60

0.70

0.80

0.90

1.00

0.00 0.20 0.40 0.60 0.80 1.00

Inte

gra

tion

(I)

Performance (P)


Figure 23: Average distribution of employees (n=24)

Figure 24: Average R&D expenditures in 209, 2010, and 2011 (n=15 for 2009, n=18 for 2010,

n=14 for 2011)

Figure 25: Average R&D expenditures in 2009, 2010, and 2011 – comparison of innovators

(branded drugs & biotech) vs. generics/OTC (n=10 for innovators in 2009, n=13 for innovators

in 2010, n=9 for innovators in 2011, n=3 for generics/OTC in 2009, n=4 for generics/OTC in

2010, n=2 for generics/OTC in 2011)

31

.5%

30

.2%

38.3

%

0%

25%

50%

75%

100%

Rest

Production

Development

29.0

%

28

.0%

31

.6%

71.0

%

72

.0%

68

.4%

0%

25%

50%

75%

100%

2009 2010 2011

other expenditures

R&D expenditures

32.5

%

17.7

%

29.8

%

18.1

% 35.8

%

16.5

%

67.5

%

82.3

%

70.2

%

82.0

% 64.2

%

83.5

%

0%

25%

50%

75%

100%

Inno

vat

ors

Gen

eric

s/O

TC

Inno

vat

ors

Gen

eric

s/O

TC

Inno

vat

ors

Gen

eric

s/O

TC

2009 2010 2011

other expenditures

R&D expenditures


When comparing all participants, the average development costs between USD 300 Mio

and USD 900 Mio, the major part (36%) of all participants even indicated development

costs of under USD 300 Mio. Development of a product takes around 8-10 years or

slightly less (Figure 26). However, taking into account that research and development

efforts are much greater for innovators, the costs increase substantially: For R&D

intensive companies the average development costs are between USD 900 Mio and USD

1,200 Mio or higher (Figure 27). Unexpectedly, the development time does not differ

significantly (Figure 27). Most likely this is due to the fact that most development

projects have to move through the clinical development phases which take a similar

amount whether there were prior massive timely investments or not. Additionally, it is

believed that most participants rather considered development duration and neglected the

preceding research efforts.

Figure 26: Average development costs (a) and times (b) (n=29 for (a), n=27 for (b))

Figure 27: Average development costs (a) and times (b) of innovators (branded drugs &

biotech) (n=24 for (a), n=22 for (b))

In total, the average duration of technical development is 81.3 months. This is most

likely influenced by clinical development. The numbers below the process steps indicate

the average duration in months (Figure 28). However, since individual process steps can

run in parallel, this total number is not an absolute duration but rather representing the

<300 Mio36%

300-599 Mio14%

600-899 Mio7%

900-1,200 Mio29%

>1,200 Mio14%

<5 years11% 5-7 years

26%

8-10 years42%

11-12 years21%

>12 years0%

a) b)

<300 Mio25%

300-599 Mio17%

600-899 Mio8%

900-1,200 Mio33%

>1,200 Mio17%

a) b)<5 years

6% 5-7 years31%

8-10 years44%

11-12 years19%

>12 years0%


resource effort. Almost half of all participants (45%) reach (clinical) POC during pilot

scale development and consequently clinical phase III follows directly and starts during

full scale development (Figure 28). This allows that products from that phase can be

used to supply the clinical study and do not go to waste. Over 60% of all companies

decide about the first manufacturing site right before full scale development starts and

can thus already consider the equipment of commercial scale production and coordinate

the set-up (Figure 28). The arrows indicate that the respective event occurs at other

process steps in some countries.

Figure 28: Duration of single process steps and indication of occurrence of selected milestones

(n=13 for process step duration, n=21 for occurences)

4.2.2 Integrated Development in the Pharmaceutical Industry

Throughout the industry, integrated development is considered to have very positive

effects on development (Figure 29): no participant rated its impact negative, and only

very few considered it to be neutral. Although integrated development’s impact is

considered throughout positive, there are differences between different development

stages. More than 75% of participants rated integrated development positively,

especially for full scale development and technology transfer. These are the steps that

involve the most different functions and departments and particularly combine

Development and Production. It is obvious that Production involvement during full scale


development helps to develop large scale processes that are already partly adjusted to the

equipment and set-up of the first manufacturing site.

Figure 29: Rating of the effect of integrated development on the performance of different

development stages (n=33)

Of all participants, 58% rate their development to be rather fully integrated and 18%

state it to be fully integrated (Figure 30). Thus, most participants consider their

development to be rather fully integrated. This concurs with the fact that most

participants work in cross-functional teams (Figure 31). ). This indicator is even higher,

which means that development projects are indeed mostly carried out in cross-functional

teams. However, personal ratings usually exceed the actual state. Although this value is

high, there is a lot of improvement potential with regards to existing concepts of

integrated development in the pharmaceutical industry.

Figure 30:Degree of integration of participants’ development (n=33)

4%

3%

14%

9%

18%

29%

12%

21%

35%

54%

76%

79%

44%

Launch

Technology Transfer

Full Scale

Pilot Scale

0% 20% 40% 60% 80% 100%

negative

rather negative

neutral

rather positive

positive

6% 18% 58% 18%Participants' Development

0% 20% 40% 60% 80% 100%

not integrated

rather not integrated

partially integrated

rather fully integrated

fully integrated


Figure 31: Degree of working in cross-functional teams (n=30)

4.2.3 Organizational Set-Up

Figure 32 gives an overview of different ways of working in development teams. The

most common form (35%) of cross-functional collaboration in development projects is a

set-up where a project leader or process owner leads and coordinates cross-functional

teams through the different process stages and handles communication up- and

downwards. Also very common (26%) is a similar set-up where the coordinator between

the cross-functional team and the responsible and decision taking management is

missing. This form is less seamless but more task- and development stage-oriented and

management reviews results at the end of each stage. 18% of the companies have an

overlapping system in place: parallel activities, seamless transitions and conditional

stage decisions are top characteristics. Another 18% have no formalized process, but still

a clearly defined path and activities. Only 3% work in a very isolated way where one

team completes a task and hands over the results as well as involvement and

responsibility.

Figure 32: Overview of ways of working in development teams (n=34)

3%10% 27% 57%"We work in cross-functional teams"

0% 20% 40% 60% 80% 100%

strongly disagree

rather disagree

medium agreement

rather agree

strongly agree

"While no formalized process is followed, we have clearly understood path of the tasks to be completed in

development"18%

"We have a formalized process where one function completes a set of tasks, then passes the results on to the next

function which completes another set of tasks"

3%

"We have a formalized process where a cross-functional team completes a set of

tasks, management reviews the result and gives the go-ahead for the team to

complete the next set of cross-functional tasks"26%

"We have a formalized process where a facilitating "process owner" helps cross-functional team move through stages and

management reviews"35%

"We have a formalized process where a cross-functional team uses a staged

process with overlapping, fluid stages and "fuzzy" or conditional stage

decisions"18%


In the overwhelming majority of companies (91%), Development rather than Production

is responsible for process development (Figure 33). Although process development

should be very close to commercial Production, it is clearly separated and still a

development task, mainly because during process development one has to deal with

many uncertainties and changing conditions. In more than half of all participating

companies, even the group responsible for the following step, technology transfer, is

under Development responsibility (Figure 34). However, in 27% this group is

organizationally part of Production. In total, 85% of all participants do have a group

responsible for facilitating transfer from Development to routine Production.

Figure 33: Distribution of organizational responsibility for process development (n=32)

Figure 34: Distribution of organizational affiliation of the transfer group (n=34)

Surprisingly, only little more than one-third (39%) of all participating companies do

possess designated launch sites (Figure 35). On average, there are 2.8 launch sites per

company, with a maximum number of ten different launch sites for one of the

participating companies (Figure 36).

Development91%

Production9%

Development50%

Production29%

own organizational unit6%

no such group15%


Figure 35: Existence of launch sites in participants’ company (n=33)

Figure 36: Average and maximum number of launch sites (n=12)

Over 60% of all participants have designated teams for the launch of new products in

place, while only a small number of companies do not (Figure 37). Over 50% of these

launch teams are not directly reporting to routine Production at the first manufacturing or

launch site (Figure 38). This means that launch teams are rather site-independent, maybe

associated with or located at specific sites, but not reporting to it. It is also possible that

they are identical with the transfer group and are thus, as seen in Figure 33,

organizationally part of and also reporting to Development.

Figure 37: Degree of existence of designated launch teams (n=33)

Launch Sites39%

No Launch Sites61%

2.75

0

2

4

6

8

10

12

Launch Sites

10%10% 19% 29% 32%Designated Launch Teams

0% 20% 40% 60% 80% 100%

not at all

rather not

somehow

rather

completely


Figure 38: Extent of direct reporting to routine/commercial Production by launch teams (n=33)

In general, transfer from one development step to the following – and associated with

this often also transfer from one specific cross-functional team composition to another –

is considered to be problem-free (Figure 39). The more groups are involved, the less

smooth a transfer at interfaces will be, and the more problems will occur. On average,

smoothness of transfer at interfaces is the lowest before and during technology transfer.

This is mainly due to the fact that different organizations have to collaborate closely.

Employees in these different organizations, especially Development and Production,

have different ways of thinking and approaching problems (more freely and creatively in

development vs. more structured and process-oriented in production). This cultural

difference, often combined with varying expectations, makes transfers at these interfaces

most difficult. Especially in the end, in the time after validation up to launch, transfer is

mainly within Production and therefore smooth.

Figure 39: Smoothness of transfer at interfaces during the development process (n=21)

20% 33% 17% 13% 17%Direct Reporting to

Routine/Commercial Production

0% 20% 40% 60% 80% 100%

not at all

rather not

somehow

rather

completely

5%

6%

10%

13%

5%

14%

47%

50%

71%

60%

48%

40%

27%

29%

47%

44%

29%

30%

39%

55%

73%

57%

0% 20% 40% 60% 80% 100%

Early Process Development -Final Formulation Development

Final Formulation Development -Pilot Scale

Pilot Scale -Full Scale

Full Scale -Technology Transfer

Technology Transfer -Validation

Validation -Registration

Registration -Launch

Launch -Post-Launch Improvements/

Changes & Maintenance

many problems

some problems

no problems, smooth


4.2.4 Cross-Functional Collaboration

From all high performing participants (determined in chapter 4.1.3) the RACI-matrix of

involvement was analyzed. Only values that showed conformity between at least 3 of all

5 high performers were considered. This guarantees that no outliers biased the general

process model. Figure 40 shows how high performing companies handle cross-functional

process development.

Figure 40: Model of cross-functional collaboration (involvement and responsibility) during late

stage technical development

The percentages represent the amount of work done by the participant in the left column

during the process step in the top row. Cells with dashed boxes indicate responsibility

and leadership for the process step. Cells with “I” indicate that this participant is kept

informed during the process step; whereas “C” means that the participant is actively

consulted and thus slightly more involved.

Due to its non-technical nature, the process step “Registration” was not further

considered; it is mostly regulatory-driven and therefore not influenceable by the

company in a meaningful way.

It was obvious that in companies with the highest early manufacturing process

performance (P) the involvement of the main future customer – the receiving/first

manufacturing or simply launch site – started earlier during process development than in

lower performing companies (Figure 22, Figure 40). Also, the extent of cross-functional

collaboration was greater, meaning the different functions (mainly Development and

Production) are actually collaborating and finding solutions together.

Early

Pro

cess

Dev

elop

men

t

(lab

scal

e, fe

asib

ility

)

Final

For

mul

atio

n

Dev

elop

men

t

Pilo

t Sca

le

Full

Scal

e

Techn

olog

y Tra

nsfe

r

Val

idat

ion

Reg

istra

tion

Launc

h

Post-

Launc

h Im

prov

emen

ts /

Cha

nges

& M

ainten

ance

Early Stage Development 100% 55% I I

Late Stage Development I 45% 100% 62% 43% 38% 29% C

Transfer Organization C 28%

Receiving / First Manufacturing / Launch Site I 38% 28% 52% C 100% 100%

Regulatory C C C C C C 60% C C

Marketing C I C

QA C C 10% 11% C C


As expected, the analysis showed that mass work load, and with it responsibility,

switched from Development to Production around the technology transfer step.

However, the true lead switched just after the technology transfer, after the process has

physically left development facilities and entered launch and commercial production

plants.


Prior to the industry survey the topic itself, the reference framework used, and the

questionnaire were discussed with representatives from the pharmaceutical industry with

many years of experience in cross-functional projects. Based on these discussions, not all

success factors mentioned in the reference framework were further tested in the

international survey. Namely “team reward”, “resources / mix”, “commitment”,

“communication / interaction”, “trust & respect”, and “informal interpersonal

relationship / social cohesion” were omitted either due to – according to industry experts

– negligible impact or because their effect was already integrated in other parts of this

research (e.g. “interaction” is integrated in cross-functional collaboration itself).

The remaining success factors proved to be important and beneficial for cross-functional

team success. As the majority of earlier studies focused on very few industries (e.g.,

electronics, automotive), success factors were tested for their relevance in the

pharmaceutical industry. Table 10 shows by how many participants they were mentioned

to be beneficial for success of cross-functional collaboration.

In general, only selected success factors of each group were considered to be important.

Of great influence, and widely implemented in the pharmaceutical industry are mainly

contextual, enabling, and technical success (Figure 41, Figure 42, Figure 44). Team

behavior factors seem to be less important (Figure 43).


Table 10: Positive perception of success factors of all and of high performing participants

(n=30 for all participants, n=5 for high performers)

All

par

tici

pan

ts

Ind

ust

ry a

ver

age

Hig

h p

erfo

rmer

s

Hig

h p

erfo

rmer

s

aver

age

Context factors Common goals and visions 70% 72% 80% 70%

Organizational culture fostering cross-functional collaboration

63% 68% 80% 60%

Co-location of team members 37% 47% 20% 35%

Enabling factors Strong top management support 70% 70% 20% 50%

Selection and education of team leaders 53% 63% 40% 50%

Formal process 30% 49% 40% 55%

Clear roles and responsibilities 80% 73% 60% 65%

Team behavior factors

Encouragement to work creatively 70% 69% 40% 60%

Team autonomy 40% 56% 40% 55%

Cross-team coordination 50% 57% 40% 45%

Formal process for (forward) knowledge transfer

33% 50% 0% 40%

Formal process for (backward) knowledge transfer

15% 41% 20% 30%

Technical factors Equipment representing first manufacturing site

44% 60% 60% 65%

Knowledge of launch/first manufacturing site capabilities and equipment

73% 75% 80% 85%

Knowledge of secondary manufacturing site capabilities and equipment

52% 64% 25% 65%


Figure 41: Positive perception of contextual success factors (n=30 for all participants, n=5 for

high performers)

Figure 42: Positive perception of enabling success factors (n=30 for all participants, n=5 for

high performers)

Figure 43: Positive perception of team behavior success factors (n=30 for all participants, n=5

for high performers)

70%

63%

37%

80%

80%

20%

0% 20% 40% 60% 80% 100%

Common Goals and Visions

Organizational Culture FosteringCross-Functional Collaboration

Co-Location of Team Members

All participants

High performers

70%

53%

30%

80%

20%

40%

40%

60%

0% 20% 40% 60% 80% 100%

Strong Top Management Support

Selection and Educationof Team Leaders

Formal Process

Clear Roles and Responsibilities

All participants

High performers

70%

40%

50%

33%

15%

40%

40%

40%

0%

20%

0% 20% 40% 60% 80% 100%

Encouragement toWork Creatively

Team Autonomy

Cross-Team Coordination

Formal Process for (Forward)Knowledge Transfer

Formal Process for (Backward)Knowledge Transfer

All participants

High performers


Figure 44: Positive perception of technical success factors (n=30 for all participants, n=5 for

high performers)

Common goals and visions, organizational climate supporting cross-functional teams,

and clear roles and responsibilities proved to be the most important success factors

across all and high performing participants. High performers rate the former two factors

even higher than the average.

Top management support is found to be important, though its effect is not crucial for

high performance. The same applies to creativity. Both top management support and

creativity are mentioned with a below-average frequency by top performers.

Interestingly, team co-location is rated very low across all participants, and even below

average by top performers. This corresponds to the fact that most companies operate

internationally, and often have separate sites for development and for (first)

manufacturing. Thus, ways to bypass this distance seem to have been found.

High performing companies have a higher degree of similarity of equipment in pilot and

commercial manufacturing plants. This of course facilitates development of processes

tailored to the future commercial environment. Knowledge of capabilities of launch/first

manufacturing site is a tremendous advantage for similar reasons, and therefore widely

spread across the industry. Secondary manufacturing site capabilities knowledge is less

important during development, especially for high performing companies.

During the first development steps up to product launch, almost half of all companies

have shared knowledge management solutions in place (Figure 45). Such platforms help

44%

73%

52%

60%

80%

25%

0% 20% 40% 60% 80% 100%

Development EquipmentRepresenting Equipment

at First Manufacturing Site

Knowledge about Capabilitiesand Equipment at Launch /First Manufacturing Sites

Knowledge about Capabilitiesand Equipment at Secondary

Manufacturing Sites

All participants

High performers


to make knowledge available to everyone involved, independent of when or by whom it

has been originally acquired. By this, prior knowledge can be re-used and certain

development steps shortened by avoiding replication of effort. Interestingly, only one of

the high performing companies has such a solution in use.

Figure 45: Knowledge management solution in different development stages (n=30 for all

participants, n=5 for high performers)

Excursus: Quality by Design in Industry

The survey was also used to assess the status of QbD implementation in the industry.

Therefore, QbD was split into minimum QbD elements (minimum requirements, basic

scientific approach), DoE, and PAT. Both DoE and PAT are enhanced QbD elements,

meaning that their implementation and usage is part of a full QbD implementation. From

this data it is to some extent possible to identify the participants’ current status in QbD

implementation, as most companies chose to first implement minimum QbD

requirements to build up a general base and then move on with the implementation of

enhanced QbD elements. Companies that only use enhanced QbD elements usually do

not follow the QbD approach as it is proposed by regulatory authorities, but rather us

these elements for their own science-based gathering of process knowledge and

understanding.

47%

55%

55%

48%

32%

20%

20%

20%

0%

25%

0% 20% 40% 60% 80% 100%

Pilot Scale

Full Scale

Technology Transfer

Launch

Routine Production

All participants

High performers


Minimum QbD elements are used throughout all development steps (Figure 46). It is

most often used during pilot scale development. However, even at routine production

over one-third of all participants use minimum QbD elements. As expected, this is more

spread than specific enhanced QbD elements such as DoE and PAT. DoE is used

extensively (over 60% of all participants) applied during pilot scale development, usage

then goes back especially during full scale development and technology transfer (Figure

47). PAT is even used fewer: around one third uses this enhanced QbD element during

early development steps, usage then decreases during launch and routine production

(Figure 48). This is somehow unexpected since PAT could ease launch and routine

production by eliminating delaying IPCs (in-process-control) and allowing real-time

releases. However, it would in turn require to be registered with regulatory authorities

exactly this way and could thus only be produced at sites with the PAT capabilities, i.e.

equipment and set-up. The following figures indicate how many of all and of top

performing participants only have mentioned the elements to be beneficial for success of

cross-functional collaboration.

Figure 46: Application of minimum QbD elements during selected development stages (n=30

for all participants, n=5 for high performers)

53%

45%

52%

41%

33%

40%

40%

60%

25%

33%

0% 20% 40% 60% 80% 100%

Pilot Scale

Full Scale

Technology Transfer

Launch

Routine Production

All participants

High performers


Figure 47: Application of DoE during selected development stages (n=30 for all participants,

n=5 for high performers)

Figure 48: Application of PAT during selected development stages (n=30 for all participants,

n=5 for high performers)

Very few companies deliberately refuse to use QbD elements such as minimum elements

or DoE (Figure 49). They are valuable during development to gain more knowledge in a

systematic way. PAT has the lowest value to development, its use is rather intended for

routine production to decrease losses and delays due to quality issues, and is thus refused

by more companies (30%). The most prominent reason to use either minimum or

enhanced QbD elements is to pursue a scientific approach (Figure 49). QbD elements

and especially DoE is used to generate knowledge and to gain process understanding. As

previously seen (Figure 47), this is mainly of interest during early development steps.

66%

42%

35%

26%

14%

60%

20%

20%

0%

0%

0% 20% 40% 60% 80% 100%

Pilot Scale

Full Scale

Technology Transfer

Launch

Routine Production

All participants

High performers

35%

34%

33%

26%

21%

60%

60%

60%

0%

0%

0% 20% 40% 60% 80% 100%

Pilot Scale

Full Scale

Technology Transfer

Launch

Routine Production

All participants

High performers


Over 50% use especially minimum QbD elements because of regulatory requirements

(Figure 49). More and more regulatory bodies do expected such minimum elements,

such as e.g. design space, to be included in registrations. Between one third and half of

all participants include minimum QbD elements or DoE in their registration documents,

PAT is only included by around one quarter (Figure 49). These numbers are rather low

but do reflect the companies’ desire to be flexible then it comes to transferring products

from high tech (e.g. with PAT-capable equipment) to low tech sites.

Figure 49: Reasons for practicing minimum QbD, DoE, and PAT.

4.3 Insights from Current Industry Practices

In general, the industry has already adapted some concepts of integrated development

known from literature and other industries. However, the characteristics are not yet fully

developed and there still is a lot of potential to be harvested.

The following are the main reasons for that:

� Inconsistent implementation: Many approaches found in today’s practices are

not consistent and continuous. They are missing complete systems and are

mostly not based on holistic and integrated concepts.

18%

50%

68%

26%

0%

38%

18%21%

79%

15%

3%

44%

9%

18%

50%

21%

0%

26%

0%

20%

40%

60%

80%

100%

TopManagement

Decision

MeetRegulatory

Requirements

ScientificApproach

RegulatoryRelief /

OperationalFlexibility

others Included inRegistrationDocuments

minimum QbD

DoE

PAT


� Too much loss of information and knowledge at interfaces: Transfer from one to

another group within cross-functional teams or changes of cross-functional team

compositions at hand-over points are the main source of information loss due to

unclear hand-over guidelines. In other cases guidelines might be suitable but are

not followed.

� Cultural differences at interfaces: During changes of responsibility at interfaces

different cultures clash. Different groups have different ways of thinking,

working, and problem solving. This is mainly the case for inter-departmental

interfaces (e.g. Development and Production) and to a lesser extent also for

intra-departmental interfaces (e.g. formulation development and process

development).

� Only few success factors proposed by literature appear to be important in the

context of pharmaceutical technical development.

� Technical success factors are not found in the literature; however, they proved to

be very important in this study. Especially the knowledge about first

manufacturing sites’ capabilities and equipment seems crucial for successful

transfers.

� Nonexistent knowledge exchange: Especially knowledge gained later during the

development process is not exchanged backward and thus might not be available

in future development projects. This way the same errors may occur repeatedly

and no general knowledge base is built up.

� Nonexistent holistic knowledge management solutions: Often knowledge

management solutions are in place, but they are not based on a holistic system.

Each group or department has its own IT-based system and compatibility as well

as data-exchange are limited.

� QbD application is still not established: Many companies more and more start to

implement QbD elements. However, these efforts are still small compared to the

potential benefits originating from a complete QbD supported science-based

approach to development and also routine production.

5 Successful Approaches to Integrated Development

This chapter introduces two practical approaches to integrated development in the form

of two case studies. First, case study selection and concept are described. This is

followed by the actual two case studies. The chapter is concluded by a comparison of the

two case studies, a comparison with literature, and insights from case study research.

5.1 Selection of the Case Study Companies

Based on a broad and representative sample of pharmaceutical companies, the industry

survey analysis led to first insights into integrated development in general and into

success factors and performance measurement in particular. The survey results provide a

clear and comprehensible answer to the question “How can efficiency of newly

introduced production processes be measured (operationalized)”? However, the question

“Can selected approaches from other industries be applied to the pharmaceutical industry

(e.g. cross-functional teams)?” can only be answered in terms of identification of

relevant success factors. It is not answered how the development process is to be shaped

to adopt integrated development. The latter can be answered by the case study research

presented in the following sub-chapters. The ultimate objective is to identify how to

shape and manage integrated development in the pharmaceutical industry.

In a pre-screening phase telephone interviews were conducted with various technical

development leaders from the pharmaceutical industry. After assessment of their current

situation, two companies were selected for participation in a profound analysis in the

form of a research collaboration.

For detailed and in-depth investigations of the two selected companies, at least three on-

site workshops (in total three or more days) were conducted. The process was to first

discuss the companies’ development process in general and then assess technical

development in more detail. Focus thereby was on late stage development, technology

transfer, and subsequent activities (such as validation, registration, launch, and post-

launch improvements) within the scope of drug product development. At both companies

most workshop participants were from Late Stage Development, however, there were


also other stakeholders present, e.g. members from Early Stage Development and

Transfer Organization. Additional to the workshops an internal survey was conducted at

each company. This was mainly to assess cross-functional collaboration during technical

development: which functions are involved to what extent during which development

step. The analyzed development process and contributing functions were more detailed

and company-specific than in the general industry survey. These company-specific

surveys were conducted internally to also analyze other functions’ perception of

technical development. The surveys at both companies had supplemental company-

specific questions about their current perceived situation in technical development and

about on-going improvement initiatives. They are not presented in detail; however, the

results are integrated in the cases.

5.2 Conception of the Case Studies

Both case study companies have implemented a highly sophisticated approach to

integrated development. The data generation was guided by the reference framework

derived from literature. Integrated development and the management thereof is the unit

of analysis for the qualitative case study research.

The research aims at providing guidance with a generic concept for integrated

development in the pharmaceutical industry. Therefore the companies were selected to

share certain similarities as well as differences. This concerns both overall characteristics

as well as specifics of the company’s individual approach. In order to guarantee the

utmost possible confidentiality, the companies are simply called Pharmaco121 and

Pharmaco2. Furthermore, specific products, product families, or therapeutic areas will

not be revealed. Also, exact locations and groups, functions, or the true names of

departments will not be mentioned. Generalizations are used instead.

Both case studies are structured in five sections:

1. Company: in this section the company’s field of operation and markets, its plant

network, general organization, and products are described.

21 The term “Pharmaco” is simply derived from “pharmaceutical company”.

Successful Approaches to Integrated Development 77

2. Development process: this section provides an overview of the company’s

general development process with focus on technical development. Meetings,

development phases, and milestones are explained.

3. Organizational set-up: this section presents the company’s organizational set-up,

e.g. functions, teams, and groups and where they are organizationally affiliated.

Relevant teams and their compositions are described.

4. Cross-functional collaboration: in this section the management of cross-

functional activities is described in more detail. Changing team compositions

and involvements along the development process are introduced.

5. Potential for further improvement: this section discusses identified potential for

further improvement of the current approach.

The first case study has two additional sections: (1) “improvement initiatives” describes

on-going or past initiatives undertaken to improve the process itself and collaboration in

technical development and (2) QbD in practice.

5.3 Case Pharmaco1

5.3.1 The Company

Pharmaco1 is a global company focusing on human pharmaceuticals and animal health.

It was founded over 100 years ago with the purpose of fabricating chemical and

pharmaceutical compounds. The company is family-owned and has its headquarter in

Europe. In total, Pharmaco1 has more than 40,000 employees at over 145 sites or

affiliated companies worldwide. About 17% of all employees work in R&D, whereas

almost 30% work in Production.

There are three main focus areas at Pahrmaco1: Prescription medicines, consumer health

care, and animal health. Prescription medicines is the biggest area and generates by far

the most revenue, however, consumer health care is growing rapidly.

Pharmaco1 covers a broad range of research areas. There are seven research centers in

Europe, the Americas, and Asia. Each of these centers focuses on specific research areas

and disease groups. Pharmaco1 maintains intensive research collaboration with academia

at one of its European research centers.


Development activities are split in two: Early development activities are undertaken at

the company’s research centers across Europe, the Americas, and Asia. Each of these

locations has specific areas of expertise and focus in their development portfolio, mainly

aligned with the research center’s respective focus areas. Late development activities are

bundled and concentrated in the company’s main development site near headquarter.

This split also reflects the collaboration needed for early and late development activities:

During early phases, mainly interaction with research is needed, whereas during late

phases, information exchange primarily happens with commercial Production.

Pharmaco1 has two designated launch sites used for introducing new products in either

the European or the American market. After successful launch, the launch sites produce

for the worldwide demand. Products can at a later stage be transferred to other, usually

technologically less sophisticated secondary manufacturing sites. Pharmaco1 is present

with manufacturing activities at 20 sites in 13 countries.

Technical development, including all development activities except clinical and medical

activities and spanning early and late stage development as well as technology transfer

and pre-launch activities, is, in comparison to other companies from the pharmaceutical

industry, further advanced than the average state-of-the-art. The systems currently in

place, namely their approach to seamless transfers, harmonization, and other

improvement initiatives, mark a desirable state for many companies. Internally, they are

perceived to be beneficial and are thus widely accepted among all involved employees.

However, in the sense of continuous improvement, the available approaches should be

kept up-to-date to reflect the ever changing circumstances.

With late development activities in focus, it can be said that the defined process is

working and established in practice. An internal survey has shown that all participants

rate Late Stage Development’s performance to be high, 60% even very high. The fact

that over 50% of all participants noticed an increase in performance since implementing

the concept of seamless transfers is a good indicator for the effectiveness of recent and

current improvement efforts.

5.3.2 The Development Process

The development process follows a distinct 8-point-milestone concept (Figure 50),

effectively combining clinical and technical aspects as gatekeepers, leading to successful


submission. This concept is documented in detail in an internal guideline of drug product

development. The guideline covers all aspects like team structures, responsibilities,

hand-overs, interfaces, etc. The document is reviewed every 2-3 years ensuring to reflect

the current situation and to cover either internally or externally driven adaptations.

The hand-over of a product candidate from Research to Development marks the start of

development. At that time, a compound exists, all research activities are completed, and

it is decided to advance into early development. A transition team, composed of

employees from both Research and Development, is formed and elaborates a pre-

development concept. This covers pre-formulation for use in animal studies in order to

profile the compound toxicologically and pharmacokinetically. Successfully matching

defined criteria as well as the final release by the International Development Committee

initiates the start of development and qualifies the compound to be used in future human

studies.

As a result, Trial Formulation 1, usually a simple drinkable solution or “powder-in-a-

bottle”, is developed and finally used to supply clinical phase I. During phase I, Trial

Formulation 2 is developed. This form usually is close to the commercial or Intended

Final Formulation, e.g. in the form of a pill if a solid is anticipated. The end of clinical

phase I marks Drug Product Milestone 1. In order to successfully pass this milestone, a

strategic concept for further development must exist, covering aspects like the final

market formulation (composition, administration form, dosage forms, theoretic

manufacturing process, etc.) (by Formulation Development) and decision of the initial

launch site in order to be prepared for its specifics (by Production). Usually, passing of

Drug Product Milestone 1 is just a formality.

Clinical phase II is then initiated, supplied with Trial Formulation 2. During this phase,

Intended Final Formulation, closely resembling the future commercial product, is

developed. A proposal for the manufacturing process already exists and is defined by

key data. Following development of Intended Final Formulation, a hand-over batch is

produced. Focus is on process, product, and analytical performance in pilot scale

environment (compared to previous laboratory scale), shortcomings22 result in an

22 In most cases the change of manufacturing scale coincides with a change in equipment (size, location, environment, manufacturer, etc.). Such changes always need intense testing, as process parameters might change with even minor changes in equipment.


improvement and adaptation loop. If the final formulation and its process performance

are as intended, the project passes Drug Product Milestone 2 and moves from Early to

Late Stage Development.

During pilot scale development, the process is optimized to be ready for

commercialization. The adaptations to the process are rather minor and manufacturing

techniques are not changed, only if commercialization seems rather impossible23. First

in-process-control specifications and general process parameters are defined. Drug

Product Milestone 3 marks the start of development in commercial relevant scales.

During the scale-up of the manufacturing process from pilot scale to full scale, the

process is further optimized in order to meet conditions at commercial scale. Material

from full scale development is used as initial supply of clinical phase III. This phase is

used to gather more data on process parameters. Its primary goal is the development of a

robust and efficient manufacturing process, also considering QbD principles. When the

process is completely defined, running smoothly, and performance in a commercial

relevant scale is as intended, Drug Product Milestone 4 is reached and transfer to the

launch site is initiated.

During technology transfer, the product and the process as well as all accompanying

acquired knowledge are transferred from Development to the dedicated launch site.

Originally, it can be divided into two distinct phases: During evaluation (1) explorative

batches are produced to review and possibly adjust process parameters. This is mainly

due to the change in environment from Development to the launch site. Actual transfer

batches (2) are then produced exactly to the specifications. Acceptance of these marks

Drug Product Milestone 5 and concludes the technology transfer.

The following registration batches are used to generate data for the registration dossier as

well as to re-supply the still ongoing clinical phase III. Alternatively, previous

technology transfer batches can also be used24. Upon successful completion, the project

passes Drug Product Milestone 6.

23 This can have various causes: Usage of a new technology for which not enough commercialization knowledge exists, early process development was made under time pressure and is not implementable in a larger scale, etc.

24 Initial supply of clinical phase III can be made with products from development. However, it is important that re-supply is produced at the same site as the registration batches (usually the launch site). Otherwise it has to be proven that the product from different environments is bioequivalent in the form of a bioequivalence study.


Figure 50: Development process of Pharmaco1.

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Primary stability studies25 are then initiated. In parallel, the registration dossier is

prepared. Drug Product Milestone 7 is reached as soon as a concept for PAT application

as well as strategies to potential regulatory questions is defined.

When all relevant data is collected and the registration dossier is complete, it is finally

submitted to the regulatory authorities for registration. Upon successful acceptance,

launch batches are produced for product launch, followed by established commercial

manufacturing and initiation of clinical phase IV. Drug Product Milestone 8 marks the

review of the robustness of the commercial manufacturing process and possibly needed

improvements.

In general, all products are transferred from Development to one of the two launch sites.

There is no standardized process for the decision on additional or replacing secondary

manufacturing sites. Strategically important products usually remain at a launch site, but

are also transferred to a secondary manufacturing site in order to ensure contingency and

back-up capacity. Reasons for transferring products away from a launch site to

secondary manufacturing sites may include, but are not limited to: capacity at launch site

needed for another, more important product; high volume, low tech; low-cost

manufacturing; etc. Rather accurate market forecasts as well as clinical data must be

available for such decisions to be taken, usually after Drug Product Milestone 8.

Pharmaco1’s development process is currently undergoing a transition from the

described process towards a process supporting the new validation guideline (FDA,

2011). Generally, the process in its entirety does not change; however, some phases will

be less rigid. The whole system will be more flexible and have an underlying continuous

flow towards registration. As implementation is still in progress and will not have

finished in the near future, it is not covered here.

5.3.3 The Organizational Set-Up

Most teams at Pharmaco1 are built as matrix structures and thus recruit their members

from different departments.

25 Primary stability studies assess the long-term stability of the final packaged drug product.


The most important development unit at Pharmaco1 is the Core Team Development. It is

built up in a matrix structure and involves stakeholders from all major departments. The

team is led by the International Head of Development and consists of the following Core

Team Members: Medicine, Regulatory Affairs, R&D, Operations, and Marketing. All

core team members contribute to a different amount according to the development

progress. In the beginning, the team is influenced the most by the Core Team Member

R&D. As soon as clinical development starts, the Core Team Member Medicine takes

over. All others are rather supporting, e.g. providing clinical trial supply, publishing

clinical studies and their results, etc. The Core Team Member Operations is part of the

core team; however, Production’s interest in the project in the very beginning is rather

small due to the high attrition rate at that stage. The core team is responsible for

advancing the development project through the Drug Product Milestones and reports to

the International Development Committee. This steering committee is finally responsible

for all decisions taken. Each R&D Project Leader directs around one to three

development projects. In core team meetings input from the various sub-teams is

presented by the respective core team member. On a quarterly basis, the R&D Project

Leader presents project results as well as team recommendations for decisions that need

to be taken to the steering committee, who are then taking these decisions. If milestones

are reached, the steering committee decides about milestone approval and senior

management initiates the next project phase.

All core team members lead an individual sub-team and take their sub-team’s inputs into

the core team.

All team members of the Sub-Team Operations are from the Production department. The

core Team Member Operations is involved from the beginning and always part of any

decisions (especially regarding manufacturing technologies). However, their contribution

is limited in the beginning and is only increased when launch is approaching. Project

leaders of the Sub-Team Operations usually lead ten and more projects, so their attention

to single projects is very limited. This sub-team covers mainly quality topics, supply

chain management, logistics, purchasing and is mainly concerned about “design to cost”

as well as launch preparedness and launch readiness (e.g. how to best plan launch in

order to penetrate the markets in a most efficient way. The Sub-Team Operations is

formed around Drug Product Milestone 5.


The Sub-Team R&D is organized as a matrix structure and involves representatives from

both Development and Production. It is divided into a CMC and Bio Sub-Team, of which

only the first one is covered further. Among others, the CMC Sub-Team consists of

employees from Chemical Development and Production, Pharmaceutical Development,

process engineers (equivalent to Pharmaceutical Development but inside Production),

Analytical and Medical Sciences, QA and QC from both Development and Production,

and Packaging Development.

The team member representing pharmaceutical development (Team Member

Pharmaceutics) changes over the course of the project: during early development the

Team Member Pharmaceutics is represented by a member of Early Stage Development,

in later development phases it is substituted by a member of Late Stage Development.

Early Stage Development is divided into different groups due to their different locations.

During early development activities, team leaders function as Team Member

Pharmaceutics in the superordinate Sub-Team R&D. Early Stage’s responsibilities

include trial formulations development, dosage finding, early formulation and process

development, definition of early in-process-control specifications, and final formulation

development.

Late Stage or Process Development consists of three project teams and one supporting

and enabling team. In the project teams the processes are developed. The team leaders

are representing the project in the superordinate Sub-Team R&D. They pass on the

current project status, next steps, and everything else discussed in the project team. The

supporting and enabling team mainly provides services such as risk assessments,

documentation, and other supporting functions to the project teams. There is a significant

amount of job rotation in Late Stage Development. The main reason is to educate

employees in other areas so that they better understand requirements and demands from

either Early Stage Development or Launch Teams. Besides this valuable learning, it may

also provide additional capacity when needed. In case of larger capacity shortages,

external employees can be acquired in order to still be able to deliver results. Late

Stage’s main tasks include: development of robust and efficient manufacturing

processes; consideration of QbD aspects; consulting during formulation development,

especially regarding manufacturing technologies, to facilitate commercialization;

responsibility of technology and know-how transfer from Development to launch sites;

support of activities up to registration and submission; manufacturing of material usable


for clinical trials; preparation of contributions to documents for clinical studies and

submission.

Process development’s counterpart in the Sub-Team R&D is a Process Engineering

Team at the launch sites. This team is responsible for the development project after

successful technology transfer, forms the Launch Team, and is the direct partner of Late

Stage Development. Although this is an often used interface, they are differently

organized: Production’s engineering team has substantially more employees than

Development’s process development team.

Process Development is part of Developed and located at Pharmaco1’s main (late stage)

development center. Transfer from Development to Production occurs from Late Stage

Development to a special Launch Team; however, there is no intermediate organization.

The Launch Team is part of Production and reports to the launch site. Pharmaco1 has

two designated launch sites with high technological standards.


Cross-functional collaboration has a long standing tradition in Pharmaco1. A few years

ago, an initiative was formed out of the Process Development department. It was the

direct result of repeated discrepancies at interfaces and hand-overs. The initiative’s

ultimate goal was not to change the process itself but rather to smoothen the existing

work flow and to improve the cross-functional collaboration and interfaces. It followed

an idea of having seamless transfers along the technical development process by

eliminating obvious boundaries, interfaces, and hand-overs of responsibility as well as

actual work contributions between different functions. Mainly, following teams are

involved earlier and longer after completion. Thus it is ensured that information is

passed on correctly and backwards learning is possible. Involvement usually begins with

information being shared, then collaboration grows more intense until responsibility is

taken over. In the end, the replaced function supports the project in a consulting function.

The initiative was immediately implemented and in its context several guidelines and

other documents were adapted in order to reflect the new way of collaboration. Although

meanwhile in action for several projects, implementation is still not fully completed.

Along the development process the Team Member Pharmaceutics of the Sub-Team R&D

holds responsibility for technical development. However, on the technical level this team


member changes through the process, there is no single person responsible from end-to-

end, mainly to ensure that the project leader also holds specific expertise during all

development steps. R&D Project Management leads the project rather administratively

and mainly towards the upper steering committee.

All interfaces and hand-overs are well documented. The process is formal yet flexible

and tailored to Pharmaco1’s situation and requirements.

For the internal survey about the collaboration along the development process it was

simplified into the most important steps (Figure 51).

Figure 51: Development process steps at Pharmaco1 (*Process Performance Qualification).

In total, 30 employees from Late Stage (9) and Early Stage Development (8), Production

(8), and R&D Project Management (5) participated in the internal survey. This provides

a representative assessment. The results show Pharmaco1’s very intense and seamless

way of collaborating (Figure 52).


When a project enters technical development, the Early Stage Development group takes

over the lead. The Team Member Pharmaceutics is represented by an Early Stage

Development project leader at one of the Early Stage Development sites. Before Drug

Early Stage

DevelopmentPilot Scale Full Scale

Technology

TransferRegistration

PPQ* /

ValidationLaunch

Post-Approval

Improvements

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Early Stage Development 100% 9% I I

Late Stage Development C 91% 100% 52% 41% 12% I

Production I C C 48% 59% 88% 100% 100%

R&D Project Management C C C C C C C I


Product Milestone 1, Early Stage confronts Late Stage with project plans and intentions.

Although this is only a paper assessment (no technical details are considered), it ensures

that development goes into a direction that is suitable for larger scales as well. Late

Stage is further informed from Drug Product Milestone 1 meeting on. During technical

development of the Intended Final Formulation, the Early Stage Development group is

doing all the work in lab scale by themselves. After around 60% of the work is done, a

member of the Process Development group (Late Stage Development) inspects the

process and its performance in lab scale at Early Stage facilities and defines further

measures to be taken before transfer to Late Stage as well as the upcoming transition

phase. Concluding early stage development, the transition phase begins: a hand-over

batch is produced by Early Stage at Late Stage facilities in pilot scale in order to analyze

product and process performance. Unsatisfactory analytical or performance data may

result in an additional re-work loop for Early Stage.

The project lead, represented by the Team Member Pharmaceutics, then switches from

Early to Late Stage Development. The currently available information and timelines are

discussed with both major involved functions Early Stage and Launch Group. Early and

Late Stage commonly perform a risk analysis which is derived into a development plan.

From then on Early Stage is only informed about the project. The development plan is

shared with the Launch Group so that they can prepare for potential technologies used

during later commercial manufacturing. During rather informal information meetings all

involved functions are regularly informed about the project. The Launch Group is

actively involved during full scale development. Representatives of the Launch Group

observe final full scale batches. The focus is on PAT technologies, mainly because these

technologies are taken over by commercial manufacturing. Often they measure data with

their own equipment in order to gain process knowledge applicable to commercial

manufacturing. With the successful conclusion of full scale development technology

transfer starts. Work is equally distributed between Late Stage and the Launch Group

and done in full collaboration.

If the conjointly produced transfer batches are accepted by the Launch Group,

responsibility (except for the drug registration) is handed over to Production. Late Stage

is supporting further activities from a consulting role and is on-site as “trouble shooter”.

Today, knowledge transfer along the development process is assured by (1) meetings

(milestone meetings, team meetings, preview meetings, etc.), (2) joint studies (e.g.


conjointly manufactured demonstration and hand-over batches), and (3) reports

(development report, master batch records, correlation matrices, safety report, etc.).

Especially meetings have proven to be an effective way of sharing information. For

example between Drug Product Milestones 1 and 5 there are six appointed meetings: a

hand-over preparation and an actual hand-over meeting between Early and Late Stage; a

simple informative, an informative and planning, a transfer planning, and a transfer

review meeting between Late Stage and the Launch Group. In general, hand-over of

documentation is established in practice. Furthermore, early involved groups can always

be consulted in case of upcoming issues.

However, this only covers forward knowledge transfer. Backwards transfer or learning is

not established. New insights gained or problems solved during commercial

manufacturing do not go back to Development and thus problems and issues cannot be

prevented from happening again. Also, different groups use different IT tools for

documentation of their data. Often they are not compatible and therefore information is

only available in one system and to one specific group.

5.3.5 On-going or Past Improvement Initiatives in Late Stage Development

There have been numerous improvement initiatives in Late Stage Development in the

recent past which are all consequences of identified deficiencies. In general, there is a

strong culture of continuous improvement present and improvements are not only

planned in theory, but also implemented and measured in practice. All following

initiatives were widely accepted and perceived to be beneficial (Figure 53):

� Reduction of API usage during technical development: There are efforts to

combine different development phases in order to save API. As API is rather

expensive, there is increasingly less of this resource at disposal for technical

development. This requires higher resource usage efficiency as well as time

savings. Accompanying risks can be calculated and controlled. As an example:

manufacturing of clinical trial supply and manufacturing development can be

combined. For this, process parameters during clinical trial batches are varied in

order to describe procedural aspects.

� Enhanced implementation of PAT applications: This initiative aimed at

increasing the usage of PAT in early development. The result is more process


understanding and easier transfer to commercial Production. Additionally it

helps to build up a solid data base and improve and refine existing models (e.g.

scale-up model).

� Revision of the Early – Late Stage hand-over guideline & revision of

transfer concept from Late Stage Development to Production: Both

initiatives addressed interfaces of Late Stage Development. In the context of the

seamless transfer approach it was of course mandatory to also adapt existing

guidelines in order that they reflect the current situation. Solid definition of

interfaces and hand-overs is the key to minimizing losses during hand-overs.

Both initiatives are perceived to be beneficial; however, especially

representatives from Early Stage Development sometimes do not feel adequately

represented. For the interface between Late Stage Development and Production

the unequal organizational set-up of both organizations constitutes minor

differences.

� Harmonization initiatives addressing gaps in manufacturing process and

equipment: This initiative improves transfer processes from development to

commercial scale when there are no significant differences in equipment in the

environments. These initiatives are all perceived beneficial. However, it is

believed that further efforts to even higher harmonization would only provide

minimal improvements and thus not return enough benefit.

� Introduction of new risk assessment tools and IPC26

strategy: The new risk

assessment tools are a valuable help in taking decisions during technical

development. They are perceived beneficial.

26 IPC stands for “In-Process-Control” and means the measurements undertaken in running processes in order to measure quality during rather than after manufacturing processes.


Figure 53: Internal perception of on-going and recent improvement initiatives at Pharmaco2.

5.3.6 Potential for Further Improvement

Pharmaco1 is very advanced in both planning and implementation of integrated

development. There is a deep understanding of continuous improvement and employees

never rest but always strive for further optimization. Following this concept, there is still

some potential for further improvement of Pharmaco1’s approach. Following, some

potential fields of action are listed, however, this list is not exhaustive and more potential

can always be identified:

� Resource shift for selected work packages: More effort in early process steps

(e.g. pilot scale development) in order to gain more process knowledge at an

early stage in the development process. This leads to more process

understanding and to the refinement of existing scale-up models. As a

consequence, major parts of later process steps, namely full scale development,

may be integrated into technology transfer and thus API usage can be optimized.

� Further enhance the seamless transfer approach to smoothen actual hand-

overs: by widening interfaces even more, by overlapping different groups, and

by involving individual groups earlier and longer. Furthermore, the seamless

transfer approach could be globalized by starting earlier (including late

research), ending later (e.g. also covering early commercial manufacturing), and

including more participating groups, functions, and departments. Also, the

4%

4%

4%

10%

22%

19%

9%

15%

26%

74%

77%

87%

75%

74%

0% 20% 40% 60% 80% 100%

Introduction of New Risk AssessmentTools and IPC Strategy

Harmonization Initiatives AddressingGaps in Manufacturing Processes

and Equipment

Revision of Transfer Concept fromLate Stage Development to

Manufacturing

Revision of the Early - Late StageHand-Over Guideline

Enhanced Implementation ofPAT Applications

dis-advantageous

neutral

beneficial


approach should be adapted so that it meets not only Late Stage Development’s

but also at least Early Stage Development’s and Production’s requirements and

constitutes a real benefit to these groups as well.

� Improving the knowledge exchange culture between Early and Late Stage

Development as well as Production. This also includes trainings in other groups’

activities and tasks (e.g. members of Early Stage Development should be trained

in late stage development activities in order to better understand requirements of

Late Stage Development and Production).

� Implementation of an advanced knowledge management system. This can be

accomplished by either harmonizing existing systems (e.g. IT tools) or by

implementing a new system in order to facilitate knowledge exchange and data

access (one single, central place for storage with appropriate access rights). Such

a system is a valuable help in acquiring and reusing gained process and scale-up

knowledge.

� Extended harmonization of equipment and processes between Development

and Production will further optimize and shorten the transfer process. However,

it has to be considered that the benefits must always be higher than the needed

efforts, thus excessive harmonization cannot be the ultimate goal.

Excursus: Quality by Design in Practice

So far, there are no general roadmaps for practical implementation of QbD. Furthermore,

due to different definitions and understandings, there is not even consent regarding the

topics a successful QbD implementation should cover. Two general challenges can be

identified: (1) Each development and manufacturing site in a company’s network has

different capabilities and thus QbD technologies cannot easily be adopted between

manufacturing sites. (2) QbD registrations are only accepted by certain regulatory

authorities and thus double effort is required to also cater for those demanding classic

registrations.

Pharmaco1’s QbD approach covers enhanced QbD elements (such as Design Space and

PAT). It is used to gain operational flexibility and deeper process understanding.

Furthermore, it facilitates scale-up and transfers of processes.


In 2009 an initiative was started with the objective to define a new roadmap for

manufacturing evaluation, transfer, and registration batches. The concept titled

“Optimization of Transfer from Late Stage Development to Launch Site” had the

intention to optimize transfer processes in order to enhance common product and process

understanding as well as the implementation of joint manufacturing teams.

In 2011, this transfer concept was further developed by means of a concept paper

revision, including QbD aspects in the revised roadmap. QbD as “a systematic approach

to development that begins with predefined objectives and emphasizes product and

process understanding and process control, based on sound science and quality risk

management” (ICH, 2009, p.16) not only enhances pharmaceutical quality but also

increases process understanding and thus helps to develop robust processes.

This was reached with an early and consistent implementation of PAT to optimize scale-

up and transfer. An additional benefit was to minimize the number of evaluation and

transfer batches, the batch size, and the transfer time. The focus of PAT application is to

understand and control the manufacturing process. A process is robust when all critical

sources of variability are identified, understood, and managed by the process and product

quality attributes. Pharmaco1 applies PAT early in process development in order to

acquire process knowledge and thus improve processes. It is also used to support IPC,

however, it does not substitute it and it is not planned to file PAT parameters with

regulatory authorities, unless required. PAT is used during technology transfer to get the

final data for registration. Overall, PAT application is widely distributed for internal use.

Concluding, PAT is mainly used for scale-up and transfer of processes: adjustments are

easier when process parameters can be monitored.

Pharmaco1’s desired state of an early and consequent implementation of PAT to

optimize scale-up is not fully reached yet. One reason for not filing PAT with regulatory

agencies is that as of today the technologies and know-how are only available in

Development and at launch sites. Secondary manufacturing sites are not equipped

appropriately. As a consequence, filing of post approval changes including conventional

IPC methodologies would be mandatory.

There are potential advantages of implementing QbD in development. Mainly process

understanding is increased and thus scale-up is smoother. Full QbD will not be included

in registration because not all regulatory authorities accept it and thus completely


different concepts would have to be registered for different markets. Applying QbD or

related concepts (such as e.g. PAT) early in development improve scale-up and

technology transfer and also have a great impact on operational excellence in

commercial manufacturing.

In an internal survey at Pharmaco1 different obvious benefits in implementing QbD

elements were identified (Figure 54). Early and extended application of enhanced QbD

elements, such as PAT, will add to an increased process understanding and help build up

a valuable knowledge base to simplify future development projects. Consistent

application will further optimize scale-up and technology transfer (the impact of

implementing enhanced QbD elements is to get a beneficial process understanding).

Figure 54: Impact of implementing enhanced QbD elements.

Gaining process knowledge and monitoring and control of manufacturing processes are

the most beneficial aspects of PAT (Figure 55). Additionally, efficiency increase during

process development and transfer is perceived to be a further benefit of PAT

implementation.

0%

7%

7%

0%

33%

24%

100%

60%

69%

0% 20% 40% 60% 80% 100%

Process Understanding

Reduction ofPost-Approval Changes

Operational Flexibility

dis-advantageous

neutral

beneficial


Figure 55: Impact of implementing PAT.

QbD should be supported by an integrated knowledge management solution in order to

profit from previous knowledge in a most effective way. However, Pharmaco1 still does

not have such a solution but rather different systems without thorough synchronization.

Furthermore, data access cannot is not provided to all involved scientists and engineers.

5.4 Case Pharmaco2

5.4.1 The Company

Pharmaco2 is a highly specialized, research-oriented global biopharmaceutical company

focusing on human pharmaceuticals. It was founded in the 1950ies with the purpose of

providing treatment to life-threatening conditions. At that time the company became a

pioneer by applying novel biopharmaceutical techniques to develop and manufacture

pharmaceutical products. Over the last 20 years it showed a double-digit growth rate.

The company is completely family-owned and still managed by a direct descendant of

the original founder. It is headquartered in Europe and has more than 4,500 employees

worldwide. It has a direct presence in over 50 countries and its products are distributed

in over 90 countries.

Pharmaco2 specializes in several key therapeutic areas, all of them related to human

health. There are no distinct activities in the field of animal health.

18%

4%

3%

4%

25%

21%

3%

11%

57%

75%

93%

86%

0% 20% 40% 60% 80% 100%

Efficiency (Timeline / ReducedAPI Consumption) Increase duringProcess Development and Transfer

Risk Mitigation duringProcess Development

and Transfer

Monitoring and Control ofManufacturing Processes

Gain of Process Knowledge

dis-advantageous

neutral

beneficial


Pharmaco2 covers a focused range of research areas. There are six research centers in

Europe, the Americas, and Asia. Each of these centers focuses on specific therapeutic

areas as well as market access to specific regions. Pharmaco2 actively collaborates with

various research institutes and other pharmaceutical and biotechnology companies across

the globe.

All research centers are involved in early development activities related to their focused

therapeutic area. However, there are two distinct “Science Centers”, located in Europe

and the USA respectively, coordinating all development activities undertaken at the

different research centers. This set-up allows vast interaction mainly in the transition

phase between late research and early development activities while simultaneously

following a centralized approach. Late development activities are mostly done by the

“Science Centers”, where late stage development capabilities are concentrated and

connections to commercial Production are most efficient.

In Pharmaco2 there are several pilot plants, each representing a scaled-down commercial

production environment. This allows adapting to commercial requirements in a rather

sub-commercial scale during an early phase of development and optimizing processes

for the transfer to commercial manufacturing. However, these plants are often not

available due to limited capacities. In such cases, either external or commercial capacity

has to be acquired. The use of pilot plants implicates a rather early decision about the

future manufacturing site.

A substantial number of development projects are outsourced at Pharmaco2. As a

general rule, development is done internally if capacities are available, (technological)

capabilities already exist, or costs of building-up technology capabilities and knowledge

are beneficial. In general, external development needs much less internal resources and

does not influence the critically observed headcount. Often the outsourced development

projects are not internalized but rather manufactured by a third-party-manufacturer as

well.

Pharmaco2 has a network of production sites in 11 countries. Transfer of commercial

products between different manufacturing sites occur and follow a similar concept as

technology transfer from development to first manufacturing sites.

There exist powerful and above-average concepts for pharmaceutical development and

technology transfer towards more cross-functional collaboration and less silo-thinking


and -acting. The main challenge for Pharmaco2 is to thoroughly implement and live

these concepts as well as to continuously adapt them to the ever changing circumstances.

5.4.2 The Development Process

The development process at Pharmaco2 follows a distinct system consisting of 8

milestones and 7 gates (Figure 56). It is defined in the Development Project Manual,

which covers all development aspects (technical, clinical, analytical, etc.) in a rather

undetailed form and without specifying reference-timelines. An IT-based project plan

template as well as additional detailed documents complete the development project

documentation. This project plan is adapted in the beginning of a project and reflects the

kind of project and other specifications (e.g. drug type, formulation type, etc.). The more

a project advances, the more this project plan becomes an accurate tool. The plan is

continuously updated and adapted to reflect on-going changes.

There is a separate corporate SOP for technology transfer defining phases, work

packages, deliverables, responsibilities, and involvement. It splits technology transfer in

four phases: Tech Transfer Pre-Phase, Tech Transfer Phase 1 & 2, and Tech Transfer

Post-Phase. This SOP was originally issued in 2004, since then continuously optimized,

and majorly improved in 2010. However, it is not always followed strictly and activities

beyond fulfilling regulatory requirements are sometimes handled with less priority.

Different documents, such as the Development project Manual, project plan template,

technology transfer SOP, and manuals from Production, are mostly not aligned and

milestones not linked (e.g. both Development and Production have their own project

plans). The contents are similar but generated independently and an overall flow through

all documents is missing. In the future, all documents shall fit together and each details a

certain step or involvement. Such an alignment and revision is planned for the near

future.

The documented development process begins in late research with promising ideas for

new or improved products. The first two Milestones cover topics such as scientific and

clinical rationale, commercial potential and attractiveness, assessment of IP27 situation

and competition as well as the demonstration of the chemical and biological feasibility.

27 IP stands for intellectual property and basically means the patent protection by law.


Based on this and additional data, at Gate 1 it is decided whether to proceed to drug

discovery or to abort the project. The activities leading to the following two Milestones

deal with further research, pre-formulation, and regulatory strategy. Gate 2 marks the

decision to proceed to Early Stage Development. At that time, detailed strategies for

regulatory, CMC, and clinical are defined and a global development plan specifying

early dosage form, time-to-market, costs, etc. is created. Gate 2 triggers official project

initiation, where a concept including timings, costs, and risks and a development plan

(project plan) are created. Project execution then follows after approval by the highest

board. The project and its major outcome, a clinical candidate, are transferred to

Development, which is now responsible.

This marks the start of Tech Transfer Pre-Phase. Formulation development starts by

screening different formulations in order to identify the best one. In parallel, the

manufacturing process associated with the chosen formulation is developed. During that

phase, there is a tremendous overlap between formulation and process development. It is

also used to develop analytical methods (e.g. for stability tests). First considerations

regarding primary and secondary packaging are made. Generally, all processes are in lab

scale, meaning a few hundred grams up to one or two kilos. More extensive process

development (e.g. kind of granulation, kind of coating, etc.) starts with a one kilo scale

and includes screening technologies, general process investigation, and identifying

process parameters. During Tech Transfer Pre-Phase non-clinical safety studies (the

results mark Milestone 5), clinical phase I (the results mark Milestone 6), and clinical

phase IIa are conducted.

Right before the end of clinical phase IIa and when the process is “ready to be up-

scaled”, the development project moves to Tech Transfer Phase 1. The goal of this phase

is to develop and scale-up capable processes, meaning they are robust and controllable

within specified ranges. Therefore Pharmaco2 uses a scientific approach: in (scale-up)

experiments it is assessed what parameters vary, then the reasons are identified, and in

the end strategies for controlling these variations are developed and applied. At the end

of clinical phase IIa POC is reached. This marks Milestone 7 and means that the

manufacturing strategy as well as estimated manufacturing costs are determined. The

manufacturing strategy also contains the decision on the first commercial manufacturing

plant. Information about the (potential) receiving (first manufacturing) plant is gathered

in order to consider these specific settings and equipment. Reaching POC also means


that the project moves from Early Stage to Late Stage Development. When the final

formulation development is finished, the manufacturing process scale-up starts: in pilot

plants the process is scaled-up from a few hundred grams to 5-20 kilos. The environment

in pilot plants is very close to the one in the first manufacturing plant. The process is

continuously adapted to meet the specifications. Material from pilot plants (pilot scale)

can be used to supply on-going clinical studies. If the quality is right, it can later even be

used as initial supply for clinical phase III. In the case of internal development and

extensive technology knowledge, controllable risks, and capabilities at the first

manufacturing plant, the pilot scale can be omitted and scale-up is done from few kilos

to few hundred kilos. Further scale-up to commercial scale occurs at the first

manufacturing plant. During scale-up, primary and secondary packaging development is

finalized and stability data is collected. Clinical phase IIb runs in parallel to process

scale-up. At Gate 3, based on clinical phase II results, it is decided whether to proceed

with development and start clinical phase III.

Tech Transfer Phase 2 marks the actual transfer from pilot or intermediate to full or

commercial scale and along with this from Development to the first manufacturing plant.

It starts when it has been shown that scale-up is possible and process development is

completed. Tech Transfer Phase 2 is usually executed prior to or during clinical phase III

– to assure that (re-)supply is in a relevant scale and can be used for validation and

submission. Material from commercial scale production is used to (re-)supply clinical

phase III (initial supply can be from pilot scale production). Tech Transfer Phase 2

covers the development of analytical procedures, scale-up to commercial relevant scale,

further process adaptations, and stability testing. Full scale batches show that the process

works (can be used for clinical re-supply). While clinical phase III is running, a detailed

commercial and pre-launch plan is established at Gate 4. Milestone 8 marks the end of

clinical phase III, where results are analyzed. At the end of this phase the project

responsibility is transferred to the Transfer Organization.


Figure 56: Development process of Pharmaco2.


During Tech Transfer Post-Phase, the transferred process is validated and the

submission documents are generated. Eventually, the project is filed for submission at

Gate 5. After a successful launch phase, the product is transferred to business at Gate 6.

The project then enters post-approval continuous verification and improvement: the

process and especially the critical process parameters are monitored and controlled so

that the specifications are constantly met. Upcoming manufacturing issues are usually

handled by the manufacturing site; however, in case of analytical or regulatory issues

Development’s Maintenance Team is involved.

Pharmaco2 does not yet follow a complete QbD approach. So far, a scientific approach

and singular QbD elements are used and it is planned to adopt more of QbD’s general

ideas. Reasons for this are mainly to obtain more robust processes, to gain more in-depth

process knowledge, to meet regulatory requirements, and to get easier approval with a

QbD aligned development process. However, Pharmaco2 has yet not finally concluded

whether a full blown QbD approach is really paying off.

5.4.3 The Organizational Set-Up

Pharmaco2’s development teams are often an assembly of specialists from different

departments each representing a function involved at certain development steps.

In general, there is a committee responsible for all development activities. It initiates a

project at Gate 2 and takes all important decisions thereafter as the ultimate instance.

The actual development team’s constitution changes along the development process. In

the beginning it is dominated by Pharmaceutical Development which also holds project

responsibility. Right from the start, the teams include members from the central Transfer

Organization, usually a production project manager. However, in the beginning, the

interaction is limited to information exchange. In case of third party development

projects, external specialists are also part of development teams. They are leading

through all development steps until technology transfer. In case of complete external

development projects, these teams function as the point of contact for the external

developer and therefore uses only very few internal resources (as no work is done in-

house).

In the beginning of Tech Transfer Phase 1 the Tech Transfer Team (TT Team) is

formed. It is responsible for successfully guiding the development project through


technology transfer and thus from Development to Production. It has members from Late

Stage Development and from the Transfer Organization as well as from the final

receiving site.

The Transfer Organization is the major bridge between Development and commercial

Production. The organization is part of central Production, which also holds other

functions like global supply chain, global purchasing, etc. Central Production is without

any manufacturing site, it is mere a service organization within Production.

There exist several pilot plants for specific product families. They are all used during

internal development according to their capabilities. Thus they fully belong to

Development.

Another functional unit is called Maintenance. It is part of Development; however, it is

not involved in primary development activities. Its main tasks are related to commercial

manufacturing with focus on analytical and regulatory issues (compared to process-

related problems handled by the manufacturing site).

Process development is part of Pharmaceutical Development (R&D) and to a large

extent concentrated at Pharmaco2’s two science centers. Transfer from Development to

Production occurs from Late Stage Development via an intermediate organization to a

commercial manufacturing team. The intermediate or Transfer Organization is part of

central Production, but does not report to a specific manufacturing site. Its main task is

the coordination between Development and commercial Production. It is the

Development counterpart in Production and closely collaborates with commercial

Production. Pharmaco2 has no designated launch sites – the first manufacturing site is

chosen for each project specifically, based on capacity and capabilities.


Interfaces and hand-overs are documented in separate SOPs or other documents. In the

past it was demonstrated that the individual documents in some cases do not match

others; however, this was subject to optimization at the time of analysis. The process is

loosely formally defined and often not strictly followed. This cannot solely be attributed

to wrong or incomplete planning, but to a high degree of flexibility of the process. This


is mainly due to Pharmaco2’s rather small size and thus limited resources as well as

intense collaboration with CROs28 and CMOs29.

For the internal survey about collaboration along the development process, Pharmaco2’s

development process was consolidated into seven simple but representative process steps

(Figure 57).

Figure 57: Development process steps at Pharmaco2.

In total, 15 employees from Pharmaceutical Development (6), Production (including the

Transfer Organization as well as manufacturing sites) (7), Regulatory (1), and Quality

(1) participated in the internal survey. This provides a representative assessment. The

results show Pharmaco2’s very intense and cross-functional way of collaborating (Figure

58).

Early stage development activities are entirely led by Development. Later involved

functions, such as QA, Regulatory, and Marketing, are kept informed in order to be

prepared when the project advances further and their contribution is needed. Tech

28 CRO stands for contract research organization. Basically this denotes a company offering research and development services.

29 CMO stands for contract manufacturing organization. Such a CMO or third party manufacturer offers manufacturing as service.

Early Stage

Development

Late Stage

Development

Technology

Transfer

Process

Validation

Report of

Equivalence

Product

Launch

Post-Launch

Improvements

Early Stage Development Late Stage Development

Early Formulation

Development

Early Analytical

Development

Early Packaging

Development

Early Process

Development

(Lab Scale)

Final Formulation

Development

Late Process

Development

(Lab / Pilot Scale)

Final Analytical

Development /

Analytical

Validation

Final Packaging

Development

LateStageDev.Technology TransferLateStageDev.

Final Process

Development

(Pilot / Full Scale) /

Process Verification

Technology

Transfer

Document

Technology

Transfer

Development

Report

Process

Validation

Report of

EquivalenceProduct Launch

Post-Launch

Improvements


Transfer Phase 1 start is when the Transfer Organization is joining the project team. This

is also around the transfer from Early to Late Stage and when clinical POC is reached. In

the beginning, the collaboration is limited to extended information sharing from

Development to Production (e.g. receiving meeting minutes). The collaboration then

intensifies the more late stage development advances. At the beginning of scale-up,

information about the receiving plant is being collected (e.g. exact equipment, setting,

capabilities, etc.).


Technology transfer starts when entering commercial manufacturing scale. It is mainly

about establishing cooperation (between Development and Production), handling

coordination (by the Transfer Organization), and transferring knowledge. There exists a

detailed corporate SOP (issued in 2004, revised in 2010) regulating interactions and

responsibilities; however, it is not always followed (except for e.g. regulatory

requirements). Responsibility of technology transfer still is with Late Stage

Development. Other than the Transfer Organization, the receiving or future

manufacturing site is also involved in order to represent the commercial environment.

Responsibility changes after the actual transfer is done and validation is about to start.

Process validation is mainly driven by Production.

Post-launch (analytical) issues are addressed in collaboration with Maintenance from

Development. Although organizationally they belong to Development, there is no

transfer back to Pharmaceutical Development. General process adaptations and

improvements are done by manufacturing engineers and do not flow back to

Early

Sta

ge

Dev

elop

men

t

Late

Stag

e

Dev

elop

men

t

Techn

ology

Tra

nsfe

r

Proc

ess Val

idat

ion

Repor

t of E

quiv

alen

ce

Produ

ct L

aunc

h

Post-

Launc

h

Impr

ovem

ent

Pharm. Development 100% 78% 54% 22% 45% C C

Transfer Organization I 12% 29% 30% 28% 31% 38%

Production 10% 17% 48% 27% 50% 62%

QA I C C C C C C

Regulatory I I I I I I C

Marketing I 19%


Development. In general, commercial manufacturing issues are handled in a siloed

structure and knowledge gained in this phase is not shared with other functions.

Knowledge management is most intensively occurring during technology transfer.

Generally, it is resource-dependent: after responsibility is handed over, no resources

from the previous owner are assigned in order to receive backwards knowledge transfer.

Outside of technology transfer the knowledge transfer is not standardized and occurs

rather unstructured. Backwards transfer almost never occurs, especially not from

commercial Production back to Development.

There is no integrated and IT-based knowledge management solution in place.

Knowledge management consists mostly of a combination of different tools that often do

not fit entirely. However, a so-called “QbD loop” is perceived to be beneficial: lessons

learned and insights from one project should be documented and managed in order to be

accessible for future projects rather than being with single persons that have to be

consulted.

5.4.5 The Potential for Further Improvement

Pharmaco2 has developed a very advanced concept of integrated development and is in

the process of implementation. This also implies that some aspects still have to prove

effectiveness in daily business. In the current theoretical and practical concept some

potential for further improvement was identified:

� Overall Late Stage Development to commercial Production concept: A

general revision of the overall concept from Late Stage Development to

commercial Production could define more intense collaboration and broader

interfaces. This could include the following adaptations: Earlier and clearly

specified involvement of the Transfer Organization, earlier involvement of first

manufacturing site, and longer involvement of Development past launch and into

commercial Production. A revised solution with clearly defined interactions,

responsibilities, and hand-overs improves collaboration at interfaces. Early

involvement results in better preparation for future commercial manufacturing

capabilities and equipment.

� Harmonization: Further harmonization of capabilities and along with them also

the equipment between pilot plants and first manufacturing sites would be


beneficial. The harmonization could even be extended further in both directions

by further aligning Late Stage Development labs and secondary manufacturing

sites. Obvious benefits would be better harmonization of Late Stage

Development and future commercial Production as well as fewer adaptations

needed at scale-up and technology transfer.

� Knowledge transfer and knowledge management solution: A formalized

knowledge transfer process should be defined. Importantly, both directions have

to be covered, meaning not only to define the process of knowledge transfer

along the development process but also the transfer back. As the amount of

knowledge generated during each project is immense, this process has to be

supported by an integrated knowledge management solution. An IT-based

solution should connect all participating groups and enable easy knowledge

exchange. As a consequence, knowledge generated would not be lost and be

accessible to everyone at any stage, more cross-project learning would be

occurring throughout development projects in different stages, and knowledge

would be accumulated and built-up.

� Training: Special training and information for all involved employees, groups,

and departments. This would result in better understanding and awareness of

overall and detailed responsibilities and contributions during development

projects.

5.5 Insights from the Case Study Research

5.5.1 Cross-Case Comparison

Both companies have their own, individual approaches to technical development;

however, they do not differ substantially. The following list provides an overview of all

commonalities and differences:

� Both Pharmaco1 and Pharmaco2 have their process development group

organizationally in Development. In both companies, this is the last development

group involved along the process; all following groups are organizationally

affiliated with Production.


� Both companies do not transfer from Development to commercial Production

directly, but via an intermediate organization or group. However, while

Pharmaco2 has a real Transfer Organization (with the sole purpose of supporting

transfers and connecting Development and Production), Pharmaco1 has Launch

Teams exhibiting a similar function. It is notable that these are temporary teams,

only assembled for transfers before product launches. Therefore they often lack

the routine. In order to compensate this, the process development group in

Pharmaco1 is more involved in transfer activities than in Pharmaco2.

� They both have development facilities representing commercial equipment to

some degree; however, Pharmaco1 shows a higher degree of harmonization.

� The overall approach to integrated development is comparable. Pharmaco1 has

started earlier and is therefore advanced further regarding implementation.

Pharmaco2 is still in the process of implementation.

� Pharmaco1 therefore has executed more initiatives with the goal of improving

the current approach. Most notable is the concept of seamless transfers: as a

direct result of issues at hand-overs, this concept was designed and implemented.

� Both companies stress the significance of a holistic knowledge management

solution, both without having such an effective tool in use.

5.5.2 Comparison with the Literature

The importance of cross-functional teams mentioned in literature is also seen in both

companies (Koufteros et al., 2005; Gerwin and Barrowman, 2002; Droge et al., 2000;

McDonough, 2000; Griffin, 1997b). However, success factors differ slightly from

literature findings:

Whereas in the literature all previously mentioned success factors proved to be

important, in both case studies is becomes obvious that mainly top management support

and a culture supporting cross-functional collaboration are important (McDonough,

2000; Holland et al., 2000). All others are not irrelevant; however, their influence is very

limited.

Furthermore, in the literature rather technical success factors are not mentioned

(McDonough, 2000; Cooper and Kleinschmidt, 2007; Holland et al., 2000; Kim and

Kang, 2008). Especially harmonization found in Pharmaco1 proves to significantly


improve transfers. Knowledge management was mentioned in the literature, but not with

the importance it was found to be mentioned by both companies.

5.5.3 General Insights

From these two case studies the following general conclusions and consequences can be

drawn:

� Development and Production are clearly separated in pharmaceutical companies.

Both major functions work as silos with different organizational cultures and

mindsets. However, in advanced companies they are connected by special

organizations and teams. Such Transfer Organizations and launch teams are not

only important to ensure smooth transfer from Development to Production, but

also to bridge both functions on a less technical level.

� A clearly defined approach to development and interface handling further

supports smooth transfer as well as cross-functional collaboration and exchange.

The chosen approach should not be biased in favor of one participant but rather

be beneficial for all functions in the same manner.

� A general continuous improvement culture and mindset facilitates cross-

functional collaboration. Top management support is crucial for building up and

fostering such a culture.

� Knowledge management grows increasingly more important, especially

considering QbD’s growing popularity. However, today’s knowledge

management only covers forward learning. Backward knowledge transfer and

general knowledge and know-how accumulation are very rare. Furthermore, no

holistic knowledge management solutions are in place. Today’s systems rather

consist of different, not synchronized IT-supported tools. Thus, data exchange

and access are difficult.

� QbD is becoming increasingly important, mainly because it also stands for a

more scientific and systematic way to drug development. However, its full

implementation demands for immense changes and resources. Therefore, the

chosen approach is to rather implement those parts with the most benefit first

and then decide whether further efforts are beneficial.

6 Design Characteristics of an Approach to Integrated

Development

This chapter introduces a descriptive model for integrated development. Insights from

the case studies and the industry survey refine the reference framework and transform it

into a descriptive model.

The first sub-chapter provides an overview of the benefits of integrated development

concepts. The second chapter presents the descriptive model built upon the reference

framework and findings from the empirical investigation as well as case study research.

Finally, in the third sub-chapter general conclusions are drawn.

6.1 Integrated Development as Facilitator

Summarized, the most important findings of both the industry survey and the case

studies are:

� Despite on-going efforts to eliminate the clear boundary between Development

and Production, both functions still operate in silo-structures. Projects are often

organized across these two main functions and cross-functional teams exist, yet

the work is done individually without much consideration of what was before

and what follows after a certain process step.

� Standardized approaches to development exist, but are often not strictly

followed. This in itself does not have to be inefficient, but often it is because

most surrounding company structures do not allow for such flexibility.

� Knowledge management is recognized as an important topic and in many

companies efforts are undertaken to address this issue. However, a general

company internal way of thinking and learning as an organization as well as

acquiring and preserving knowledge does not exist. In terms of supporting

solutions, i.e. IT-based, it is often tried to build them on top of existing

structures, which inevitably leads to ineffective patchwork solutions.

� To many people in the industry it is not clear whether QbD really is

advantageous and if so, what their advantages are. Therefore it is often

110 Design Characteristics of an Approach to Integrated Development

approached with a certain reservation. The accompanying changes and benefits

are not yet recognized and embraced. One of the major hurdles to QbD is

knowledge acquisition and knowledge management. Both is often done already

to some extent and would only have to be brought in line with QbD’s

requirements.

� Generally, the predominant culture is not yet open enough. Understanding of the

concept of continuous improvement has not yet reached all parts of the

organizations. This can be considered as the key prerequisite for organizational

change to happen and to succeed.

As a result of these findings, integrated development is obviously a facilitator for more

effective development, transfer, and launch of new products as well as more efficient

production processes.

Figure 59 : Integrated development.

A structured concept adapted to a company’s current set-up facilitates intensified

collaboration of both Development and Production and leads to the following process-

related or technical advantages:

1. Manufacturing processes are not adapted as late as technology transfer; instead,

future manufacturing characteristics are considered earlier during process

development and scale-up.

2. Early consideration of commercial manufacturing environment and equipment as

well as a more scientific approach to process development lead to more efficient

manufacturing processes.

3. Efficient manufacturing processes have a direct positive influence on

manufacturing costs. In addition, less post-launch adaptations arise and process

Design Characteristics of an Approach to Integrated Development 111

improvements and optimizations are not needed during the first years of

commercial manufacturing.

4. During emerging manufacturing issues support by development specialists is

more effective.

Implementation of such a concept comprises side-effects that are valuable for the

development of organizational properties:

1. Boundaries are broken and silo-structures are eliminated by improved and

intensified overall intra-organizational collaboration.

2. Learning and knowledge build-up are supported. Furthermore, knowledge

availability increases.

3. More exchange between departments leads to higher social interaction between

employees.

4. There is increased organizational learning.

6.2 Design and Configuration of Integrated Development

The insights from the industry survey and case studies lead to a review of the reference

framework. It is transformed into a descriptive model that is adapted to reflect practical

issues. This can assist managers to shape their individual approach of achieving high

integration in drug product development.

Figure 60: Transformation from a reference framework to a descriptive model.


The model is extended to also incorporate the important topic of knowledge management

and is now comprised of four main components (Figure 60): (1) The actual management

of the development process within integrated development approaches, (2) the

characteristics of the organizational set-up of involved organizations and departments,

(3) supporting and enabling success factors, and (4) knowledge management. Also, to

reflect a true management perspective, the component “cross-functional collaboration” in

the research framework is transformed into “managing cross-functional collaboration”

and deals with management aspects rather than with actual team composition.

6.2.1 Organizational Set-Up

Ideally, Development and Production are connected through an intermediate Transfer

Organization. If no such organization exists, its function can be taken over by launch

sites. They too have the knowledge about their capabilities and can represent commercial

Production in development projects. Due to this representing role, a Transfer

Organization is best organizationally affiliated with Production. It ensures close

collaboration with both the development as well as the commercial production side and

guides transfer projects through this tough environment. Furthermore, it bridges the

different mindsets of development and manufacturing engineers. This is achieved by

maintaining formal and informal relationships with both functions. It is beneficial for all

employees around this interface to be trained in other functions’ activities and

requirements; however, for the transfer group it is essentially important. This is easiest

done by working in another team for a period of time. In the end, it is better understood

what the previous or the following teams’ challenges and requirements are and thus the

own work can be adapted in order to better fit into the overall value chain.

Generally, process development is under Development’s responsibility, whereas the

Transfer Organization is organizationally affiliated with Production. However, to avoid

too much influence of commercial production, the Transfer Organization should

maintain its independence and not report to a production or launch site.

Differently scaled development labs help during the scale-up process. As they are used

during early process development, it is favorable if they are under Development’s

responsibility. However, their set-up should be closely aligned with launch sites or


commercial production. Moreover, the more commercial the scale is, the more they

should also be available to transfer group or even production engineers.

Launch sites are typically multi-purpose sites and are thus very flexible regarding

manufacturing capabilities. This is beneficial for product launches and can be used to

quickly start-up commercial production. Still, to maintain this flexibility, products

should be transferred to secondary manufacturing sites. In the case of a low degree of

alignment of manufacturing capabilities, this transfer can be very expensive. Therefore it

is important to have some level of harmonization across all manufacturing sites.

Development teams are organized as matrix-teams and thus truly cross-functional. It is

important that technical responsibility is always with the function or department leading

all work related activities. However, it is favorable for the overall project success that

responsibility during development projects does not change. This also prevents

knowledge loss and effort at responsibility hand-overs.

6.2.2 Managing Cross-Functional Collaboration

Generally, development projects are long-term projects and therefore need proper

management. One singular leader must be responsible for the overall project during its

entire lifecycle from early development up to launch. Ever changing general

responsibility hinders smooth project flow and fosters uncertainty in the different project

teams. This clear-cut responsibility and lead strategy is also reflected on the level where

the actual work is done. All activities, independent of whoever does the major work

share, are under clear responsibility: from the beginning up to technology transfer a

single representative from Development and from successful technology transfer until

launch a single representative from Production should assume responsibility.

All major teams during development projects are of course cross-functional. However,

their composition and the individual members’ involvement and contribution changes

with each sub-task. Figure 61 shows the generalized process steps and the team

members’ involvement according to important outcomes.

Early development activities, such as lab scale process development and final

formulation development, are all dealt with by Early and Late Stage Development

groups. All other functions, e.g. the Transfer Organization and the first manufacturing


site, are kept informed. This way they can start to prepare their increasing involvement at

later stages.

When a project enters scale-up, meaning the transition from lab to pilot scale, first

considerations about the future manufacturing site must be made. Thus, the Transfer

Organization, in possession of the manufacturing sites’ capabilities and equipment, must

be involved when the first manufacturing site is determined and the manufacturing

strategy is developed. Traditionally, development engineers are influenced by research

and are therefore rather open to innovation and new technologies. Manufacturing

engineers on the other hand, know their existing and proven technologies and, for

economic reasons, rather want to use what already exists and what is understood.

Therefore it is important that both engineering groups discuss whether Development’s

ideas can be operationalized on existing equipment and capabilities or whether new

technologies have to be built up. When manufacturing engineers are involved in

selecting new technologies and also see the advantages, they are more open to adopting

them. Moreover, the earlier technologies are built up, the more effective they can be used

in commercial production.

During full scale development it is important that the chosen first manufacturing site is

involved and contributes to the success of the project. This can be achieved by providing

either development capacity (e.g. commercial equipment) in a commercial scale

environment or knowledge about commercial scale behavior and properties. In the end it

is important that the outcome is a full scale manufacturing process that is adapted to

commercial production’s capabilities and equipment. During this phase commercial

production gets ready for the following technology transfer: composing a manufacturing

engineering team, assigning capacities for technology transfer, adapting long-term

planning for commercial production after launch, etc.

Technology transfer is still under Development responsibility; however, it is functionally

led by the Transfer Organization. This organization is also coordinating the technology

transfer. Both Development and Production are collaboratively executing technology

transfer and conjointly manufacturing first evaluation batches at the first manufacturing

site. As this is the phase with the most exchange and where two different approaches

meet, it is most important that collaboration is fostered and the functionally leading

Transfer Organization coordinates and connects both functions. Development’s goal

must be to transfer a nearly optimal full scale process with only minor needs of


adaptations, in order to successfully launch the product in the end. On the other hand,

Production also wants to take over adapted processes and thus sees the need of

collaboration also during earlier phases (e.g. pilot scale, as mentioned).

The following validation is under Production responsibility. It coordinates all efforts

between Development and Production. During validation a mixed team of Development

and Production validates the process at commercial manufacturing. This also helps to

build up further process knowledge.

Technically, Production is responsible for registration. However, the relevant work is

carried out by regulatory. Both Development and Production provide the data necessary

for successful registration. Technical aspects of the launch are done by commercial

production.

Post-launch improvements and changes are handled by engineers from commercial

Production. However, the Transfer Organization is coordinating the acquired knowledge.

It is passed on to Development and thus ensures company-wide learning. Moreover,

Development can directly benefit from such inputs as they can be applied in future projects.

It is important that all major hand-overs, i.e. from Early to Late Stage Development and

from Late Stage Development to the Transfer Organization or commercial production,

are considered carefully. Rather than one group finishing work and handing it over

abruptly, the goal is to collaborate around and across the interface. The closer a hand-

over comes, the more the succeeding group is involved and exchange increases. Ideally,

some hand-over batches are produced conjointly. After the actual hand-over, the giving

group assists the receiving group by consulting. This involvement then decreases as the

receiving group acquires more knowledge. By applying this process adaptation the

interfaces will blur and the transfer will be seamless and smooth.

Other functions and departments are constantly informed and updated as the

development project progresses and masters milestones. They are involved when needed

and according to their expertise. For example: After the definition of the final

formulation, primary and secondary packaging development starts. Marketing is then

involved as they have all the market insights and knowledge about how to design

packages in order to reach optimal customer acceptance. Moreover, these other functions

often support processes secondary to technical development and are therefore not

explained in detail.


Figure 61: Proposal for optimal cross-functional collaboration in development projects.


Management of cross-functional collaboration does not only include management of

daily procedures, but also regular improvements and adaptations to the current approach.

This is best achieved by annual or bi-annual assessments of the current processes and

concepts. They traditionally cover questions such as: What has changed in the process?

Do changes in the process need adaptations in the concept? Where are the challenges in

the current approach? What could be improved in the current approach? It often results

in initiatives for process improvements or revisions of internal SOPs or guidelines. Such

initiatives are helpful in streamlining the organization to optimally fulfill its purpose.

However, it has to be considered that the resources available for assessments and

initiatives are linked to the company size: the bigger a company is, the more likely it is

that it can afford some fulltime employees dedicated solely to continuous improvement.

Smaller companies should instead foster a culture where every employee follows this

philosophy and continuous improvement is a natural part of the daily business.


Relevant success factors are best divided into organizational and technical factors. While

the first describe organizational requirements and behavior, the latter describe favorable

technical adaptations.

The most important success factors for integrated development and cross-functional

collaboration are top management support and a culture fostering cross-functional

collaboration. They both set the right environment for cross-functional teams to be

highly productive. Consistent support of cross-functional collaboration by top

management demonstrates the believe in cross-functional collaboration. Employees will

only take it over and follow this concept if they feel that it is indeed wanted and believed

to be the right path. Therefore top management has to demonstrate that despite a high

effort, cross-functional collaboration is the right way.

It is further important to define clear roles and responsibilities so that everyone knows

his/her part and no one feels lost in the process. Especially clear responsibilities are

crucial for successful transfers and hand-overs. Common goals and visions also help all

participants to see their part without losing sight of the overall goal. It is important that

the focus is not on the performance of individual contributions but on overall project


performance. This can be achieved by a common goal, e.g. to develop a technically

superior manufacturing process in order to hit the market with a better product.

Encouragement to work creatively may lead to new technology usage and by this to

improved manufacturing processes. However, it is crucial to discuss the adoption of new

technologies in collaboration with commercial production.

On the technical level there are two important success factors that can be summarized by

the term harmonization: equipment representing the first manufacturing site and

knowledge of first/launch manufacturing site capabilities and equipment. The first one’s

benefit is obvious: alignment of equipment of development facilities and first

commercial manufacturing sites leads to easier transfer of processes from Development

to Production. However, this might be costly as each first manufacturing site needs a

development pendant. It is more efficient to harmonize critical equipment. At least the

Transfer Organization or commercial manufacturing engineers must possess knowledge

about first commercial manufacturing sites’ equipment and capabilities. This influences

the development during development of the manufacturing strategy and also improves

the transfer.

6.2.4 Knowledge Management

The more data is generated, the more important effective knowledge management

becomes. So far IT based knowledge management systems often are used in isolation in

single departments, e.g. both Early and Late Stage Development have their own

knowledge management solutions. They are not compatible and thus data exchange

constitutes immense efforts. As a consequence, knowledge created during one stage of

the process is often not available in another and thus company learning cannot occur.

Ideally, there is a single, integrated, holistic, and IT based knowledge management

system spanning the entire development process. Each user has access according to its

function. All relevant data is entered into the system and thus preserved.

Insights and scientific data can be re-used and replication of efforts can therefore become

obsolete. It also ensures the back-transfer of knowledge acquired in commercial

manufacturing. An effective knowledge management helps build an immense scientific

data base. This is also beneficial for QbD, as over time a lot of data will already be

available and thus development is accelerated and the scientific understanding increased.


Moreover, effective knowledge management enables organizational learning and the

organization becomes less dependent on knowledgeable employees.

However, very few companies are in the situation where they can dismiss their current

different knowledge management solutions and instead implement a new one. To

improve the usage of existing solutions, it is important to enhance data exchange.

Furthermore, when solutions are replaced, one should consider an already existing

solution. Although requirements are different by all users and departments, a solution

optimal to all should be implementable.

6.3 Conclusion

In a successful approach to integrated development in the pharmaceutical industry,

development projects follow a formal process with clear roles and responsibilities.

Process development is under responsibility of Late Stage Development. Ideally, a

Transfer Organization exists, belonging to the Production department and thus really

representing production’s capabilities. The Transfer Organization is involved in process

development and represents the commercial manufacturing or launch site. Thereby it is

assured that the environment, equipment, and capabilities of commercial production are

considered and processes are specifically developed to be efficient in commercial

production. The Transfer Organization takes over responsibility from Development after

successful technology transfer. As soon as commercial production is established,

responsibility is transferred from the Transfer Organization to routine production. The

Transfer Organization becomes active again in case the production is transferred to a

secondary site at a later stage.

Top management commitment and an organizational climate fostering cross-functional

collaboration are important for successful concepts. Thereby all needed resources are

available and employees are encouraged to collaborate with other departments.

Furthermore, common goals and visions are important for development project success,

to eliminate silo-thinking and to foster individual interest in overall project success. This

overall team and project performance can also be rewarded. The more equipment and

capabilities of development and commercial production are aligned, the smoother the

transfer runs. Harmonization efforts further increase process stabilization.


Not yet widely established but crucial are singular, integrated knowledge management

solutions. They help to build up and preserve valuable knowledge, which can then be re-

used for new development projects, speeding up development time and decreasing

efforts. However, it is important that there is only one system in place, and that data is

available to all responsible employees at all time. This knowledge can then also be used

to resolve manufacturing issues. A scientific approach to development is based on an

accessible, large amount of data and empowers preventive process stabilization.

Generally, it is highly beneficial to establish a culture and common understanding of

continuous improvement philosophy throughout the company. This means all employees

on all levels act towards the goal of increasing effectiveness and efficiency of all

processes. To achieve such a general mindset of continuous improvement, it must be

demonstrated by leaders. Furthermore, employees must be trained in order for all to

share the same understanding and to see the benefits. If it is routine to regularly question

the current way, what has changed, and what could be improved, a true culture of

continuous improvement is established.

7 Summary and Outlook

This chapter concludes this thesis by summarizing theoretical and managerial

implications. The research findings extend the current theory about integrated

development both in a general and in an industry-specific way. Also, known limitations

do exist and are listed in the third sub-chapter. The forth sub-chapter gives an outlook

where further research is possible for future scientists.

7.1 Theoretical Implications

As mentioned in the introduction of this thesis, an overall model for integrated

development in the pharmaceutical industry is missing. A theoretical and practical model

is introduced by this research, building upon existing approaches found in literature and

adapted according to empirical findings. The model contributes to the

R&D/manufacturing interface, integrated development, and literature on cross-functional

teams.

Furthermore, literature about integrated development and cross-functional collaboration

is extended with empirical data from an industry survey and two case studies from the

pharmaceutical industry. So far, this industry was underrepresented in literature.

Operationalization of a measurement for both integration and performance of newly

launched manufacturing processes is introduced. Especially the empirical findings

demonstrate a correlation of these two indicators. This leads to research finding 1a:

Research finding 1a: The higher the degree of integration, the higher the performance of

newly launched manufacturing processes.

In fact, all participating companies with high level of integration did perform better

regarding process development and thus were able to transfer better and more efficient

manufacturing processes from development to commercial production. As a

consequence thereof, Production was involved earlier in the development process. This

is stated in research finding 1b:


Research finding 1b: The earlier production is integrated into the development process,

the higher the process development performance is.

This finding is tightly connected to the first finding and extends it further. The high

performing companies all showed very early integration: a gradual increase of

production involvement and final complete hand-over after technology transfer.

Improvements after launch were also found to be very integrated, meaning Development

was again involved and could thus also learn for future projects.

Earlier involvement of production requires excellent coordination. A Transfer

Organization can exhibit this function and operate as a bridge connecting Development

and Production. It can be an organization on its own or this role can be taken over by

launch sites. From the importance of this function, research finding 2 is derived:

Research finding 2: To bridge Development and Production, a Transfer Organization is

needed.

Existing known success factors critical to integrated and cross-functional development

are tested and in some cases found to be highly relevant for the pharmaceutical industry

as well. However, others do not apply to this specific industry, or at least their effect is

not as expected from examples of other industries. From this, research finding 3a is

formed:

Research finding 3a: The four organizational success factors top management

commitment, organizational culture fostering cross-functional collaboration, common

goals and visions, and clear roles and responsibilities are most influential.

Contrary to expectation, team co-location and formal knowledge transfer process proved

to be negligible for high process development performance in the pharmaceutical

industry.

Additionally, an additional group of success factors, i.e. technical success factors, is

introduced and their importance demonstrated. Especially equipment harmonization is a

perspective not considered in literature so far and thus generally extends theory. It forms

research finding 3b:

Research finding 3b: Harmonization and knowledge about capabilities are crucial

technical success factors.

Summary and Outlook 123

Moreover, knowledge management, in literature often found as another success factor, is

demonstrated to be very important for pharmaceutical development. Therefore it is

elevated from yet being solely a success factor to being a substantial part of integrated

development. This most likely also applies to other industries. It is stated in research

finding 4:

Research finding 4: Effective knowledge management enables learning and is thus

crucial to successful process development.

In addition, theory about QbD implementation is extended by a general model on how to

shape development in a way suitable for QbD and its intense demand for data.

7.2 Managerial Implications

This research is derived from managerial problems observed at manufacturing

pharmaceutical companies (with development activities) and therefore research results

are practice-relevant and applicable. The developed descriptive model can serve as a

management model for the implementation of integrated development in the

pharmaceutical industry.

It is important that activities and initiatives concerning internal transformation are based

on a holistic system. The model proposed in this thesis covers organizational, process,

and management aspects as well as accompanying success factors.

As managers embrace learning from other managers’ experiences, the following

recommendations are enriched with topics from discussions and workshops conducted

with participants of the industry survey and the management of the case studies

companies. These recommendations for managers are clustered into the following five

groups:

� Organizational Set-Up: It is important that the organizational set-up follows the

concept of integrated development. Therefore, it is advisable to install an

independent Transfer Organization connecting Development and Production.

Furthermore, silo-thinking of both Development and Production departments

must be avoided by fostering conjoint activities during development projects and

later adaptations of commercial manufacturing processes.


� Management of Cross-Functional Collaboration: Effective management of

cross-functional collaboration needs clear responsibilities. Ideally, one single

person is responsible for a project from beginning to end. Also, involvement of

manufacturing specialists, either from the Transfer Organization or commercial

production, must start as early as a manufacturing strategy is being developed.

From then on, collaboration must slightly be increased until technology transfer,

when the official transfer from Development to Production occurs. Following

this transfer, Development’s involvement decreases continually. Furthermore,

management should regularly start initiatives with the clear goal to analyze the

current set-up, find improvement potential, and really improve the current

approach.

� Success Factors: It is most important to create an organizational environment

fostering cross-functional collaboration. Top management support functions as

empowerment of employees to embrace cross-functional collaboration and to see

its benefits. This is most likely achieved by building a shared base of

understanding of cross-functional collaboration and integrated development and

by demonstrating its positive effects with so-called “quick wins” or lighthouse

measures: simple activities towards integration show its obvious benefits, e.g.

involvement of production during development of manufacturing strategy leads

to a strategy for commercial manufacturing truly considering existing

capabilities, equipment, and technologies and therefore eliminates later

surprises. Furthermore, managers should consider a high degree of

harmonization between development facilities and first commercial

manufacturing plants. If this is not possible due to too many sites or limited

resources, at least detailed information about capabilities, capacities, equipment,

and technologies of each commercial manufacturing plant should be collected

and taken into account early during development.

� Knowledge Management: Knowledge management proved to be increasingly

important. Today’s more scientific approach to development generates immense

amounts of data. It is only efficient to collect them all if they are made accessible

for other projects. Therefore management should implement a single, integrated,

and holistic knowledge management solution. Such an effective system increases

the value of knowledge by making it highly re-usable and therefore generating

potential to eliminate previously performed experiments.


� QbD: Crucial for QbD implementation is the generation of data that can be re-

used for future development projects. A growing scientific data base unfolds

QbDs potential as its initially high efforts (mainly for data generation) decrease

significantly. Whether management should aim for QbD-submissions cannot be

answered and is probably a question of a company’s philosophy. However, even

if QbD is used for internal purposes only, it greatly increases process

understanding and fosters the scientific approach to development.

7.3 Known Limitations

There are some limitations known to the research presented in this dissertation. The most

prominent is of course the focus on the pharmaceutical or life sciences industry. As this

may hinder other industries from adopting presented concepts and strategies, it was also

unavoidable to have this focus: This way, a specific process 100% representative for the

pharmaceutical industry could be investigated. Had there not been an industry focus, the

results would be rendered unusable due to the high generality and low specificity. Also,

the research on QbD is by definition industry focused.

The industry focus can again be brought up as a second limitation: The focus implies the

pharmaceutical industry to be homogenous, when in fact there are differences between

e.g. the generics, biologics, or traditional pharmaceutical industry. However, they all

share the key concepts of high regulation as well as the proceedings of the development

process.

In general, the research of this topic was difficult due to the immense duration of

development projects: They could not be accompanied from beginning to end, instead

single representative projects were re-created from industry experts’ experiences and

knowledge. Furthermore, activities and concepts in development are often considered as

competitive advantage and therefore underlie high confidentiality. Thus many interested

industry experts decided not to take part at all or only with assured anonymization.

However, the quality of presented results is thereby not affected at all and many industry

representatives confirmed the findings.

In particular, the method used for the internal surveys has some disadvantages that

constitute minor limitations: General data was gathered by conducting semi-structured

interviews and workshops with persons directly involved in drug product development.


Furthermore, data representing the current situation regarding cross-functional co-

operation was gathered by internal surveys. Therefore a RACI-matrix-style questionnaire

listing all process steps as well as participating functions was widely distributed to

representatives from Development, Production, and other functions within Pharmaco1

and Pharmaco2. Participants provided information to what degree or amount they are

involved in certain process steps along drug product development. A clear advantage of

this method is that all involved functions get a chance to describe the situation from their

point of view. However, the main disadvantage is that there is no agreement in the end.

There is not one single collaboration and involvement process for the participating firm,

but rather multiple different versions, all to some extent biased by the participants.

However, significant discrepancies in single process steps can be taken as problem

indicator. Usually, after discussion, it turns out that some participants have either used a

different definition of that particular process step, some participants have not filled out

the way it is in reality but rather in theory (which indicates that either theory or

execution has to be reviewed), or that some participants do not know the theory and have

not yet adapted to it. The result is either adaptation of the theory or education and

training of the desired state. It also has to be taken into account that all results are mere

perceptions of the individual participants.

7.4 Further Research

The main research question is answered by answering all sub-questions. However, the

research presented in this dissertation is by far complete. Following four areas are

proposed, each extending the research topic in a different direction.

1. The pharmaceutical industry can be divided into the generics, biologics, and

traditional pharmaceutical industry. They all share a very similar development

process, but there are also some minor differences. Investigations of all three

sub-industries could reveal differences or similarities in the way cross-functional

collaboration is organized. Furthermore, it could be that each sub-industry has

unique combinations of success factors driving efficiency.

2. So far very few pharmaceutical companies have holistic and integrated

knowledge management solutions in place. Therefore efficient implementation is

not known. This could be investigated and taken even further: What is the effect


of integrated knowledge management and thus company learning abilities on

development performance? As proposed in this dissertation, it is expected that

effective knowledge management has a tremendous beneficial influence on

development performance.

3. QbD is still not very widespread in the industry. A holistic investigation of how

to implement it, what resources are needed, and what the real benefits are would

certainly help, in case it is favorable for QbD implementation, to increase its

popularity. There exist studies in some of these fields; however, to date it has not

been researched in a holistic approach.

4. Integrated development is an established concept for some industries. However,

there are also industries, like the pharmaceutical industry, where development is

integrated only to a very small degree. Research could be undertaken to identify

whether existing concepts are easier to transfer to other industries compared to

the pharmaceutical industry. Furthermore it could be investigated, whether the

concepts used for adoption of integrated development by the pharmaceutical

industry presented in this dissertation could facilitate adoption by other

industries.

Concluding, it is believed that this research is highly relevant to both management

practice and management theory. The latter is significantly extended through the holistic

model for integrated development. This research can serve as a starting point for future

scientists aiming at supporting pharmaceutical companies in increasing effectiveness and

efficiency of their development process through integrated development.

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Appendix: Survey Questionnaire

138 Appendix: Survey Questionnaire

Appendix: Survey Questionnaire 139

140 Appendix: Survey Questionnaire

Appendix: Survey Questionnaire 141

Curriculum Vitae

Name: Reto Marc Ziegler

Date of birth: April 21st 1983

Place of birth: Basel, Switzerland

Education

2008 – 2013 University of St.Gallen, St.Gallen, Switzerland

Doctoral programme “Management - Business Innovation”

2007 – 2008 University of Basel, Basel, Switzerland

Master of Science (M.Sc.) in Molecular Biology, Major in

Molecular and Developmental Immunology

2004 – 2007 University of Basel, Basel, Switzerland

Bachelor of Science (B.Sc.) in Biology, Major in Molecular

Biology

1993 – 2002 Gymnasium Kirschgarten, Basel

High-school studies, specializing in Latin (“Matur, Typus B”)

Professional Experience

2008 – 2013 Institute of Technology Management, St.Gallen, Switzerland

Research Associate

2007 – 2008 Center for Biomedicine, Basel, Switzerland

Master thesis (M.Sc.) in Molecular Immunology

2001 - 2006 iRIX Software Engineering AG, Basel, Switzerland

Software Developer

2002 – 2004 Novartis Pharma AG, Basel, Switzerland

IT Support

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