THE BUSINESS OFVIRTUALIZATION IN RESEARCHAND DEVELOPMENT

Sandy Johnston, Kate Moss, and Andy Brown

PricewaterhouseCoopers

EMPOWERING VIRTUALIZATION,ENABLING NEXT-GENERATIONPHARMA

Nick Giannasi

Oracle

RE-THINKING PHARMA R&D THE MERCK EXPERIENCE

Clark Golestani

Merck & Co

TECHNOLOGY AND PEOPLESHIFTING THE R&D PARADIGMAT GLAXOSMITHKLINE

Alex Lancksweert, Peter Milligan, and Robin Dement

GlaxoSmithKline

healthsciencesvisions.com

HEALTH SCIENCES

VIRTUALIZATIONIN PHARMA R&D

Managing EditorSian Bithell

EditorWai Lang Chu

Editorial DirectorPatrick Wong

Sub-editorial ManagerLisa Glass

Design ManagerEliza Albie

DesignerIan Shoobridge

Production ManagerAnthony Gibbons

Publishing DirectorCathy Peck

Associate DirectorHealth SciencesKevin McGeehan

Managing DirectorDavid Ramsey

T: +44 (0) 20 7452 5152F: +44 (0) 20 7452 5606

E: david.ramsey@touchbriefings.com

Editorial ContactSian Bithell

E: sian.bithell@touchbriefings.com

Circulation ContactMiriam Oppenheim

E: miriam.oppenheim@touchbriefings.com

Published by Touch Briefings. Touch Briefings is the trading name of Business Briefings Ltd, a Touch Group plc company.

All information obtained by Business Briefings Ltd and each of the contributors from various sources is as current andaccurate as possible. However, due to human or mechanical errors, Business Briefings Ltd and the contributors cannotguarantee the accuracy, adequacy or completeness of any information, and cannot be held responsible for any errors oromissions, or for the results obtained from the use thereof.

Where opinion is expressed, it is that of the authors and does not necessarily coincide with the editorial views of BusinessBriefings Ltd. Statistical and financial data in this publication have been compiled on the basis of factual information anddo not constitute any investment advertisement or investment advice.

2011 All rights reserved Cover image: Karen McDonald

In association with:

For an electronic version of this publication and our report

archive, please visit healthsciencesvisions.com

eHEALTHCAREPATIENT MANAGEMENTWITHOUT WALLS

BREAKING DOWN THE WALLSOF HEALTHCARE

Patrick Wong

eHEALTHCARECHARTING THE FUTURE HEALTHCAREPROGNOSIS

Paul H Keckley, PhD

HEALTHCARE WITHOUT WALLSDELIVERING THEFUTURE PARADIGM

Marc Perlman and Brett Davis

BUILDING CONNECTIVITY,INTEROPERABILITY, AND COMMUNICATION IN eHEALTHCARE

An interview with Lynn Harold Vogel, PhD,and Rick Skinner

THE NORTHUMBRIA NHSINITIATIVEPUTTING THEBIGGER PICTURE INTO PRACTICE

Jim Mackey

healthsciencesvisions.com

S

HEALTH SCIENCES

THE CHANGING LANDSCAPEOF PHARMACOVIGILANCETHE IMPACT ON MEDICALINNOVATION AND HUMAN HEALTH

Bengt I Samuelsson, Nobel Laureate

PHARMACOVIGILANCE AT THE INTERSECTION OF HEALTHCARE AND LIFE SCIENCES

Kostas Kidos

THE NEW POST-MARKETINGPHARMACOVIGILANCETOOLBOX

Peter K Honig, MD, MPH

SIGNAL DETECTION IN THEDIGITAL AGE

Dr Paul Chew and Dr Linda J Scarazzini

INTEGRATING RISKMANAGEMENT ACROSS THEPRODUCT LIFECYCLE

Paul Eisenberg, MD, MPH, FACP, FACC

healthsciencesvisions.com

S

HEALTH SCIENCES

MANAGING RISK

EMBRACING THE NEWPARADIGM IN GLOBALPHARMACOVIGILANCE

CTMS A DECISION-SUPPORTING ENGINE FOR THEFUTURE

Chris Huang

THE CLINICAL TRIALMANAGEMENT SYSTEM THECENTRAL INTELLIGENCE HUB

Henry Levy

CTMS IN THE WORLD OF M&A MANAGING OPERATIONALCHALLENGES

Christopher Heider

FLEXIBILITY, INTEROPERABILITY,AND ORGANIC GROWTH THE CHALLENGES OF CLINICALTRIAL MANAGEMENT INEMERGING GEOGRAPHIES

Lynda Shelley

healthsciencesvisions.com

HEALTH SCIENCESTHE POWEROF CTMSINTEGRATION,INTEROPERABILITY,AND COLLABORATION

S

Copyright 2008, Oracle. All rights reserved. Oracle is a registered trademark of Oracle Corporation and/or its affiliates.Other names may be trademarks of their respective owners.

oracle.com/lifesciencesor call 1.800.ORACLE.1

20 of the 20Top Pharmas

Get Better Results With Oracle

Oracle Health Sciences

11:15 AM

I

3V I R T U A L I Z A T I O N I N P H A R M A R & D

Contents

FOREWORD

Tomorrows Virtual WorldBig Pharmas Big Chance 4Sian Bithell

Touch Briefings

REVIEW

The Business of Virtualization in Research and Development 5Sandy Johnston, Kate Moss, and Andy Brown

PricewaterhouseCoopers

Empowering Virtualization, Enabling Next-generation Pharma 11Nick Giannasi

Oracle

Re-thinking Pharma R&DThe Merck Experience 15Clark Golestani

Merck & Co

Technology and PeopleShifting the R&D Paradigm at GlaxoSmithKline 18Alex Lancksweert, Peter Milligan, and Robin Dement

GlaxoSmithKline

Tough times for Big Pharma indeed, but the pharmaceutical market is out there and there is little doubt that its growing globally.Unsurprisingly the pharmaceutical industry is facing challenges from the weak global economy, downward pressure on prices, andincreased public scrutiny over ethical and business practicesdriving development and regulatory costs sky high. Cost control measures can be

employed and go some way to counter these problems, although it is by addressing the demand for innovative medicines where real progress

can be made.

For too long pharmaceutical companies have relied on modest improvements in existing research and development (R&D) pipelines while their

blockbuster drugs pay the bills, but this strategy is no longer working. Evidence demonstrates that spending in R&D has been increasing

exponentially while the annual number of new drug approvals remains relatively low. Add to this the well-documented fact that patents for many

of the industrys blockbuster medicines will expire over the next few years and it is evident that tactical changes must be made.

Reflex action sees like-for-like mergers as a quick fix. Looking to combine existing drugs in novel ways also provides a solution to unblocking the

pipeline in the short term. Yet, as governments worldwide attempt to shift the spotlight from disease treatment to prevention, it appears that

focusing on disease rather than individual compounds should generate new business opportunities for pharmabut can such shifts be done

alone with any great degree of success?

Moving into a new decade, senior management acknowledge that adopting new business models could provide them with long-term solutions

to their problems, offering much more than a glimmer of hope for the future. Fundamental to the future success of the industry is the need to

improve on the return on R&D investment. This will require a shift from the integrated in-house model of R&D to models that embrace external

innovation from creative alliances and outsourcingthe virtualization of R&D.

Here, in our focused report Virtualization in Pharma R&D, we have commissioned a collection of articles from expert commentators and

practitioners in the new R&D landscape.

From PricewaterhouseCoopers, Sandy Johnston, Kate Moss, and Andy Brown provide a brief state-of-the-nation overview of the

biopharmaceutical industry in their article, The Business of Virtualization in Research and Development. They identify and review potential

virtualization business models and strategies, presenting an excellent introduction to the subject matter and a comprehensive analysis of the

methods used to implement a suitable approach.

Complementing this, our second review, Empowering Virtualization, Enabling Next-generation Pharma, written by Nick Giannasi, goes even

further. This article underlines the fact that the virtualization of R&D will need to be supported by enabling IT, predicting that IT-empowered

data/knowledge management will drive efficiencies and facilitate the much-needed push for continued innovation that remains elusive.

Rethinking Pharma R&DThe Merck Experience provides us with an insightful view from the ground. Clark Golestani harnesses Mercks

progressive hands-on experience of virtualization and discusses the new strategies that have been employed at the company, the challenges

faced, and the resulting benefits to their business.

The final article in this report, Technology and PeopleShifting the R&D Paradigm at GlaxoSmithKline, written by Alex Lancksweert, Peter

Milligan, and Robin Dement, highlights how GSK, among others, are revisiting virtual IT solutions to improve R&D productivity.

We would like to thank all of our authors for their contributions and trust that you, our readers, will find our report informative and engaging. n

Tomorrows Virtual WorldBig Pharmas Big ChanceSian Bithell

4 T O U C H B R I E F I N G S 2 0 1 1

Foreword

Balancing on the Precipice of the Patent CliffThe biopharmaceutical industry is at a significant point in its evolution.

Fundamental changes across the industry are gathering pace, creating

divergence away from the uniform model currently in use across most

of the industry. The principal force driving this need for change is the

unprecedented number of market-leading drugs facing patent

expirations. Between 2008 and 2012, branded drugs with revenues

amounting to $157 billion (measured in 2005 terms) will lose market

exclusivity. For the leading pharmaceutical companies, between 14 and

41% of their existing revenues will be lost as a result of paten