Life Sciences
the way we do do it
Lifecycle Management in the Pharmaceutical Industry: The Unexploited Potential The challenges in the pharmaceutical industry are multilayered. The customer landscape is changing: Physicians’ prescription decisions are coming under the influence of empowered patients, payers, and further-reaching regulations, and the physicians themselves are becoming more remote. Healthcare cost-containment measures are accelerating the penetration of generics and the restriction on pricing and reimbursements for originals. Product development and production are becoming more complex through increased involvement of various parties such as development, manufacturing, marketing and external partners.
“
There is no
doubt that, in the interim between now and capitalizing on the new science of genetics and genomics, we’re going to be more dependent on existing product pipelines. The smart companies will look to wring everything they can out of their existing products.
”
Chris Towler, Towler, former former dire director of Global Global
Regul Re gulator atoryy Policy Policy at Gla GlaxoWe xoWellcome llcome
In this changing industry environment, and with many pharmaceutical companies facing a serious drought in R&D pipelines and the expirations of some blockbuster drugs, industry experts are acknowledging the importance of Lifecycle Management (LCM) to optimize the net product value. These were the findings of Capgemini’s Vision & Reality Research, an annual, in-depth research report into key changes that impact the life sciences industry.
Perceived importance of Lifecycle Management by industry experts Importance of Lifecycle Management over past 5 years
Change of importance of Li fecycle Management over next 5 years
Vision & Reality Research “Increasing the lifetime value of pharmaceutical products”
60%
Study participation from: • Over 80 pharmaceutical executives from North America and Europe across all key functions
38% 30% 23%
23% 13% 3%
Very Impor- Average Less Not important tant important important
2%
4% 0%
SignifiSignifiMore Average Less cantly important important cantly more less important important
Source: Capgemini Vision & Reality Research
In contrast to the perceived importance of LCM now and in the future, pharmaceutical companies still consider themselves to be lacking in important areas: • Limited commercial input in early stages • Activities not started early enough • Too much focus on revenue rather than profitability • Lack of leadership/unclear responsibilities and a limited cross-functional alignment • Despite pockets of excellence, LCM implementation is inconsistent, lacking in rigor Only a small number of success stories in the pharmaceutical industry show that effective LCM implementation can be highly profitable, such as AstraZeneca’s Losec/Nexium, Bayer’s Adalat and Pfizer’s Procardia. Lifecycle Management Benchmarking Study
In addition, Capgemini recently conducted a Lifecycle Management Benchmarking Study to identify major LCM practices in the pharmaceutical industry and learnings from other LCM experienced industries.
We compared the current status of LCM practices of major and mid-sized pharmaceutical companies to identify emerging best practices. In our study we identified four critical areas of LCM capabilities within the pharmaceutical industry: 1.LCM organization and governance 2.Core LCM processes 3.Knowledge and skills necessary to support the LCM processes 4.Information and performance indicators needed to track and manage LCM effectiveness Although none of the major pharmaceutical companies excel in all capability areas, some have taken a clear lead in specific areas. Governance of Lifecycle Management varies between those companies that see themselves as marketing-led and those that see themselves as development-led. However, the results suggest that the key to success is not which method is selected, but rather whether the method is supported with effective “balances”, such as ensuring clear commercial review and sign-off of strategies for companies that lead LCM from development. Most companies now have defined processes for developing LCM strategies and reviewing progress. However, few apply these processes rigorously
• Over 7,500 physicians worldwide via an electronic survey • US and European payer organizations • Follow-up interviews with key industry figures and analysts at all times, and almost no one in the study had developed a comprehensive performance measurement system to track the effectiveness of its LCM operations. One key differentiator for the leading implementers of LCM is the degree to which they focus on building genuine market insights into their LCM strategies. Another is how they engage themselves to continuously innovate and improve their LCM practices. Some of the smaller pharmaceutical companies show more innovation in their practices – varying from taking a much longer perspective on planning to organizing their company completely around project teams rather than functions.
Life Sciences
Lifecycle Management Benchmarking Study
Lifecycle Management Capability Model
Study participation from • Nine out of the twelve top pharmaceutical companies • Selected mid-sized pharmaceutical companies
the way we do it
Organization & Governance Clear ownership and drive for LCM across all functions
Core Operational Value Chain
Marketing & Sales
Development
Discovery
Supply Chain
Processes Rigorous, consistent, timely, collaborative
• Non-pharmaceutical industries … through market research and oneon-one focus interviews.
Knowledge & Skills Cross-functional, business-focused Information & Performance indicators Transparent, profit-focused measurement
Lifecycle Management Capability Areas
1.LCM organization and governance: • Organizational balance between development and commercial • Formal vs. informal control of LCM •Use of dedicated LCM unit 2.Core LCM processes: •LCM strategy and planning process •LCM decision-making and progress review processes 3.Knowledge and skills necessary to support the LCM processes: •Sophisticated market insight to identify needs/wants of changing customer landscape •Rich cross-functional and interorganizational collaboration to overcome increased complexity in organization and processes •Continuous innovation of LCM approaches to be armed for toughening healthcare environment 4.Information and performance indicators needed to track and manage LCM effectiveness: •Rigorous and interlinked key performance indicators aligning all functions behind LCM objectives •Information for decision-making and control transparent across organization
IT Tools/Enablers Consistent information, collaborative workflow
We further investigated how other LCM-experienced industries – fastmoving consumer goods/fashion, automotive and aerospace sectors – scored on these LCM capabilities. The results suggest the LCM practices of these selected non-pharmaceutical industries could be a role model for the pharmaceutical industry. Best-inclass market-insight generation comes from close proximity to customers, which is achieved through the right organizational structure, processes, technology and culture. A rich crossfunctional and inter-organizational collaboration is achieved by stringent LCM orientation at each step of the product planning. This needs to be supported by formalized processes/ contracts, by professionally managing product data/information, and by
facilitating workflow simulation and modelling with multiple stakeholders inside and outside the company. Based on Capgemini’s experience in LCM, our adaptive Lifecycle Management Quick-Scan methodology would support you in: • Understanding the implementation status of your current LCM capabilities and practices. • Identifying both strengths as well as areas for improvement to enhance LCM implementation and its respective initiatives. • Developing a feasible and practical implementation plan for prioritized LCM topics. • Accelerating further institutionalization of LCM practices and capabilities in your organization.
Capgemini’s Lifecycle Management Quick-Scan Methodology Steps
Objectives Key Activities
Deliverables
Step 1: LCM status quo analysis
Step 2: LCM implementation preparation
• Understand status of LCM implementation
• Get commitment from key LCM stakeholders
• Identify strengths and weaknesses of LCM implementation based on Capgemini expertise • Identify and prioritize key topics of LCM implementation • Identify needs to further enhance the implementation of LCM and its respective initiatives
• Present findings from focus interviews • Prioritize key LCM topics for implementation • Develop implementation plans for prioritized topics
Status quo of LCM implementation Overview on LCM implementation related needs and initiatives
Prioritized key LCM topics LCM implementation plan Commitment from key stakeholders
Capgemini Life Sciences
Capgemini’s Life Sciences practice is one of the world’s leading consultancies to the pharmaceutical, biotechnology and medical equipment industries. Founded in 1993, the Life Sciences group has 2,500 affiliated professionals worldwide, among them a global team of 200 Strategy and Transformation consultants dedicated exclusively to life sciences issues. Capgemini has consulted with over 90 of the top companies of this industry. A combination of deep industry insights and leading-edge transformation capabilities make this a unique offer to the life sciences industry.
Capgemini’s Life Sciences solutions cover all components of the life sciences value chain, ranging from strategic planning through to operations excellence, technology implementation and outsourcing. Recognized as a thought leader in this sector, Capgemini brings an insider’s perspective to the challenges facing life sciences companies and employs a deep industry understanding to provide integrated global solutions for top-tier clients in the sector.
About Capgemini and the Collaborative Business Experience
Capgemini, one of the world’s foremost providers of Consulting, Technology and Outsourcing services, has a unique way of working with its clients, called the Collaborative Business Experience. Backed by over three decades of industry and service experience, the Collaborative Business Experience is designed to help our clients achieve better, faster, more sustainable results through seamless
access to our network of world-leading technology partners and collaborationfocused methods and tools. Through commitment to mutual success and the achievement of tangible value, we help businesses implement growth strategies, leverage technology, a nd t hrive through the power of collaboration. Capgemini employs approximately 61,000 people worldwide and reported 2005 global revenues of 6.954 billion euros.
For further information and discussion
Oliver Freese
on Capgemini’s Lifecycle Management
Principal, Capgemini Life Sciences
expertise please contact:
[email protected] mobile: +49 (162) 234 3656 or Monika Hespe Life Sciences Marketing
[email protected] phone: +49 (30) 88703 175
www.capgemini.com/lifesciences
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