Transcript Marketing

Table of Contents
 Market Trends
 Global Majors & Deals
 Opportunities Across Value Chain
 CRO Market In India/China
 Global Outsourcing Market Trends
Pharma BPO/KPO Market Bound To Grow Rapidly
Pharma BPO/KPO Trends
Clinical Data Management Market
2011
2007
USD 300-500M
21-25%
YoY
USD 1B
 Last 2 FY09 Quarters have seen a surge in demand,
due to an increase in stringent USFDA scrutiny
 Nurses being recruited for medical assessments
 TCS witnessing a 25-30% growth in it’s 1,000-seater
Pharma BPO practice. To hire further 500-700
 Satyam to grow it’s Pharma BPO strength by 30-35%
Equaterra Pharma BPO Survey: June 2008
 70%of pharma clients view outsourcing as a way to improve efficiency in core areas of their business,
including clinical data management, pharmacovigilance, sales and marketing analytics and related knowledge
services
 60% of pharma buyers look to outsourcing for process improvement
 90% of Pharma buyers point towards cost reduction as leading driver for outsourcing
Reported Pain Areas For Pharma BPOs
 Managing IP and data confidentiality, Designing and managing global delivery processes
 Regulatory challenges from the USFDA and other organizations that require significant due diligence and may
expand the scope of the work and increase risk to both Pharma companies and BPOs
 Recruiting and retaining the levels of specialized talent needed to deliver complex pharma BPO and KPO
services
Source: Press Searches, Equaterra
Upcoming 24 Months Will See Higher Value Added Projects In The
KPO Space
Services Gathering Momentum
Legal & Knowledge
Services
Marketing
Analytics
Contract Sales
Support
Clinical
Assessments
Safety Narrative
Writings
Litigations Support
Regulatory Filings
Support
Informed Leads To
Physicians
E-Learning Support
Pharmacovigilance
Strategy
Consulting
Bio-Statistics
BPOs - Key
Selection
Criteria
Data Management
Study Design
Implementation
Source: Equaterra
Product
Development
Consulting
Table of Contents
 Market Trends
 Global Majors & Deals
 Opportunities Across Value Chain
 CRO Market In India/China
 Global Outsourcing Market Trends
Pharma Majors Concentrating on India For BPO/KPO Deals
Company
Pfizer
Glaxo
Vendor
Services
 Cognizant
 Captive
 Europe Shared service centers
 Clinical Data Management and Biometrics deal with Cognizant in 2005
 50 strong team in Biometrics department located in Mumbai –15% of
 Captive
 TCS
 ACS
 Satyam
 2007 March - TCS-100 member team for data management services -
global data management done out of Indian operations. Conducts data
management and statistical analysis for global clinical trials (mostly Ph I
an Ph II trials)
 Maintains Shared Service Centers Across Europe-UK, Ireland, Spain,
Nordics
 Voice and Non Voice Pharma BPO Services outsourced to Ken
Software Technologies in India
CDM & Clinical submissions support
 Clinical Data Management Center India (CDMCI) operational in
Bangalore since 1996. 120 strong team
 2006 - ACS HRO 10 year project
 2005 – Satyam - Art & Animation Contract for GSK packages
 Hired MarketRx (Cognizant) to make a promotion response model
 Sales Force Solution from Vanguard
Eli Lily
 TCS
 2006: TCS’ medical information sciences - clinical data management,
statistical analysis and medical writing
Novartis
 Captive
 Started operations in 2001 in India with approx 30 statisticians out of
global team of 250 located in India. Focus on standard safety reporting
for Phase II and III trials. Reports focused on US FDA and EMEA. Over
40 global trials supported in first year of operation. Supporting 2 mega
trials of over 10,000 patient records each. Conduct several short turnaround analyses for clinical pharmacology studies
Source: Company Websites, Press Searches
Pharma Majors Concentrating on India For BPO/KPO Deals
Company
Merck & Co
Vendor
 Cognizant
 HCL
Services
 2007: HCL Strategic support for key IT initiatives
 2007: Cognizant - applications outsourcing, IT infrastructure
management and BPO services
Wyeth
 Accenture
 RPS
 Large deal with Accenture to outsource its data management to India,
replacing 315 strong data management group in Wyeth, US
 RPS is a Pharma Resource Organization-Monitors Wyeth’s Americas
Clinical trails, performance & accountability report, project management,
infra support, integrated operations & management
Astra Zeneca
 Cognizant
 2008: Cognizant contract for Clinical Data Management - data
management planning, clinical study set-up for electronic data capture,
medical coding, adverse event reconciliation, clinical data management,
and training for the clinical sites and investigators
Roche
 TCS
 2007: TCS contract provides clinical data management, clinical
programming, bio-statistics and drug safety support
Bristol-Myers Squibb
 IBM
 Accenture
 2008: IBM Philippines 10 Year USD 324M IT/HRO deal
 2007: Accenture contract for Clinical data and document management,
Pharmacovigilance, and scientific writing functions.
Johnson & Johnson
 Convergys
Source: Company Websites, Press Searches
 2007: USD 1B Convergys HRO Deal
Table of Contents
 Market Trends
 Global Majors & Deals
 Opportunities Across Value Chain
 CRO Market In India/China
 Global Outsourcing Market Trends
Horizontal Opportunities For Pharma Firms
Internal Opportunities
Broader drug development
capability through:
• New target drug
molecules/Compounds
• Novel Analysis & Screening
tools
Internal
Opportunities
(Horizontal
Movement)
Drug
Development &
Discovery
External
Opportunities
(Horizontal
Movement)
• Product extensions/Variants
• Knowledge/Expertise in
clinical-trial standards &
throughput
Internal
Opportunities
Clinical Trails
(Horizontal
Movement)
• Supply chain control
• Cost & services benefits if the
firm conducts a range of
activities throughout the value
chain
• Knowledge of low cost, highvolume chemical reactions
• Control over flow of raw
materials
Source: Kauffman Foundations
Internal
Opportunities
External
Opportunities
Manufacturing
(Horizontal
Movement)
• Acquisitions
• Value-Sharing & Milestone-based
partnerships
External Opportunities
• Purchase or sale of potential drug
compounds with established proof
of concept
• Relationships with CROs, BPOS, KPOs
• Need based international trails
• Testing on existing tissue or DNA
lines
(Vertical Movement)
Internal Opportunities
• Purchased IP
• Relationships with CROs, BPOs, KPOs
External
Opportunities
(Horizontal
Movement)
Broader drug development capability
through:
• University Programs
(Vertical Movement)
Internal Opportunities
External Opportunities
(Horizontal
Movement)
External Opportunities
• Knowledge of Low Cost, high volume
chemical reactions
• Control over the flow of raw
materials
Pharma Value Chain Activity In India & China
Development Services (Blue Boxes Signify Lesser Activity)
New
Concept
Target
Identification &
Validation of
Target Biological
Pathway
Compound
Generation &
Screening
Lead
Optimization &
Development
Drug Candidate
F&A
HRO
Precedented
Target
Target Existing Drug
Concepts to Emulate
Generics
Identity Off-Patent Drug
Clinical Data
Management
Identity Off-Patent Drug
Clinical
statistics
Clinical Trials
Pre-Clinical
Testing
Phase I & II Trials
Phase III & IV
Trials
Medical
writing, and
discovery
Bio-Equivalence Testing
Manufacturing
Source: Kauffman Foundation
High Yield
Chemistry
Drug
Intermediaries &
Active
Ingredients
Drug Product
Table of Contents
 Market Trends
 Global Majors & Deals
 Opportunities Across Value Chain
 CRO Market In India/China
 Global Outsourcing Market Trends
India Pharma Clinical Research Outsourcing Overview
India’s Clinical Research Outsourcing Market*
2011
2007
USD 2B
USD 300M
Market Trends
 20 clinical research organizations and 80
hospitals are engaged in trials
 Growing number of major deals – GSK
global drug development center in
agreement with TCS
 Market Share to increase to 4.4% in 2010
 Outsourced services – USD 225M by 2010
(F&A, Sales/Marketing)
* Does not include outsourcing of Manufacturing
2007-08 Multinational Clinical Trials in India
Merck Roche
4%
Novartis 6%
6%
Astra
Zeneca
7%
 Japan leads Asia-Pac with 406 trials
Johnson &
Johnson
16%
Sanofi
Aventis
11%
N=130
Trials Trends
GSK
15%
Pfizer
11%
Source: Indian Pharmaceutical Alliance
BMS
12%
Eli Lilly
12%
followed closely by China (389) & India
(347)
 Recently in India GSK & J&J led the list
with 22 trials, followed by Eli Lily and BMS
(17 each)
 Pfizer (16), Sanofi Aventis (15), Astra
Zeneac (10), Novartis (9), Merck (8) and
Roche (5) completed the picture
CRO Cost Savings In India & China Indicate Huge Cost Arbitrage
Development Services
Identification &
Validation of Target
Biological Pathway
Compound
Generation &
Screening
Sample Cost Savings
ShanghiaBio- 30-60%
Aurigene – 25-33%
ShanghiaBio- 30-60%
Aurigene – 66-80%
ShanghiaBio- 30-60%
Aurigene – 60-66%
Drug Candidate
Source: CEOs Respective Companies
Pre-Clinical testing:
Animal and in-Vivo
Models
Sample Cost Savings
Sample Cost Savings
Lead Optimization &
Development
Clinical Phase I
Clinical Trails
I,II – Info N.A.
Sample Cost Savings
ShanghiaBio- 50-70%
Aurigene – 33-50%
Pros and Cons Of The Indian Pharma Outsourcing Market
Cost Savings 20-60%
1/3rd of Developed Countries Wages
Diverse Genetic Pool
Large Patient Pool
Manpower Shortage of
30,000 to 50,000 Research
Personnel
Weak Regulatory Infrastructure
Drug Naïve Population
Competent Medical Professionals
Laws on IP rights
Rules for trials
Source: Press Search
Office of Drugs Controller
Understaffed
Pros and Cons Of The Chinese Pharma Outsourcing Market
Low cost of drug development
Large domestic market
Rich clinical/disease resources
Plentiful, trained human resources
Government support Laboratory facilities tend
to be less advanced
Lack of domestic funding
resources and venture
capital
Insufficient communication platform
Lack of experience in regulatory
and other specialized areas
Plentiful R&D institutions
Increasingly innovative drug R&D
Growing government commitment to IP
protection
Source: Press Search
Lack of experience in regulatory
and other specialized areas
Table of Contents
 Market Trends
 Global Majors & Deals
 Opportunities Across Value Chain
 CRO Market In India/China
 Global Outsourcing Market Trends
Global Industry Revenues & Trends Indicate A Surge In Pharma
Outsourcing
Global Pharmaceuticals + Biotech Outsourcing Market*
Information Services USD
~2B, Growth Rate:5-10%
Development Services
USD 7B, Growth Rate:1015%
Sales/Marketing/
Education
USD 7B, 10-15%
Contract Research Outsourcing USD
15B, Growth Rate:14-15%
* Does not include outsourcing of Manufacturing, PBMs, Wholesalers
Source: Wall Street Equity Research
Trends

Development Services – Traditionally performed at in-house development depts.

Increase in number of compounds flowing into preclinical trials

Biotechs important but funding volatile

Few profitable companies and inherent FDA delays
 Contract Research Outsourcing – early and late stage clinical development
services

The CRO market is large, fragmented and growing rapidly

70% of spending comes from

Pharmaceutical companies; 30%

from biotech

Often volatile in late stage sector
 Sales/Marketing/Education – services to promote new products & sustain
marketability throughout product lifecycles

Changing nature of promotional spending

Weakness in new drug launches
 Information Services – Market research, Data Analytics

Growth limited by new drug launches by large pharma

Increases focus on evidence-based analytics
Outsourcing Has Become A Key Component Of Pharma Companies’
Business And Financial Strategy
Development Services






Biological testing/
Biology Services
Medicinal Chemistry
Chemical Development/
Chemistry Services
Analytical Chemistry
Lead Optimization
High-Throughput
Screening
Sales/Marketing/
Education
Outsourcing
Contract Research
Outsourcing






Discovery
Pre-clinical & Clinical
Development

Pre-clinical
Phase I,II, III

Post-Approval




Phase IIIb, IV
Manufacturing
Sales Support

Advertising and
promotion
Contract sales and
consulting
Publishing and medical
education
Interactive multimedia
Marketing research
Information Services
Outsourcing

Data Management





Medical
Clinical
Physician
Decision support tools
Market research
services
Trends
 Growing importance of
 Chemistry Services is the
largest segment with 40%
of the market
 India and China
collectively will be a $20
billion drug discovery
outsourcing market by
2011
Source: Broker Research, Press Searches
biotech R&D efforts
 Increasing complexity and
scale necessary for FDA
approval
 Strengthening of the late
stage pipeline
 Growing propensity for
large pharma to
outsource non-core
activities
 Designed to accelerate
market acceptance of
new products
 Utilized to sustain
marketability throughout
product life cycles
 Prescription data
management key to
formulate sales strategies
 Real-time data reporting a
key feature used by other
industries apart from
Pharma
Market Shares Expected To Fluctuate As Consolidation Is A Regular
Feature
Global Pharma Outsourcing – Top Companies Market Shares 2008
CSO
CRO
Charles
River
10%
Others
15%
Quintiles
16%
Others
21%
PPD
14%
Covance
14%
Icon
11%
Clinphone
5%
PDI
10%
Innovex
(Quintiles)
25%
Parexel
9%
Fragmented Market – Heavy Consolidation activity
in 2007. Less activity expected in 2008 compared to
previous year
Source: Broker Research, Press Searches
Inventiv
Health
50%
CSOs gaining traction as big pharma looks to cut
costs on sales reps and marketing resources
Sales & Marketing Outsourcing - Different People Roles For Different
Stages In The Product Lifecycle
Development
Services
Clinical
Phase I
Clinical Phases II,III
Clinical
Phase IV
Regulatory
Approval
Pricing &
Reimbursement
Sales &
Marketing
Medical Communications
7 years
1.5 years
Clinical Research
Associates
Variable
Medical Science
Liaisons
Launch
Key Account
Managers
Specialist
Reps
Source: Press Searches
Global Trends
 Offshore Partners
 Strategic Vs. Tactical Outsourcing
 Driving forces - greater complexity, cost
competitiveness, less stringent regulations, higher
R&D productivity & large pool of
R&D experts
 China, India, Eastern Europe are
major outsourcing
destinations
 Outsourcing Regulations
 Emerging areas - Marketing analytics, contract sales,
overall support for drug development, legal and
knowledge services
emerging as
• Strategic outsourcing emerging with new business
models, model, adequate legal protection, and a
robust knowledge management system
Trends
 Consolidation
 The US Presidential elections & new
outsourcing state laws could affect the
outsourcing industry
 Cross-border transactions accounted
for a disproportionately large share of
all transactions
 Potential job loses (Pfizer closing 2 sites
in US & 1 in Germany) may attract
attention of US/EU regulators
 Highly fragmented market, small and
mid-sized companies that can make
attractive acquisition candidates for
both strategic and financial buyers
Source: Press Searhes
Trends: All Players Leaning Towards Strategic Outsourcing


Large Pharmas
Amount Outsourced

Biotechs
Mid-Size
Pharmas

Small
Pharmas

In-House Resources
Source: Press Searhes
Pharma constitutes 70% and Biotech 30%
of the total pharma outsourcing market
In Aug, ’08, Covance created a watershed
event in this space by buying Eli Lilly’s
Greenfield Laboratories in Greenfield, Ind.,
In 2008 ~27% of all the preclinical and
clinical-trial drug testing is outsourced to
CROs. By 2013, it could reach 37%, creating
a $38 billion market, according to Jefferies
& Co
Large players making huge shifts towards
strategic outsourcing. For Eg: Pfizer
Smaller players focusing on strategic
outsourcing relationships due to internal
resource constraints
Top Global Pharma Outsourcing Companies Services Overview
Top Companies
Development
Services
Outsourcing
 Provides a complete spectrum of CMC solutions for
 AzoPharma
pharmaceutical development
 cGMP compliant analyses
 Quintiles
 Early stage clinical & bioanalytical research
 Covance
Contract Research
Outsourcing
 PPD
 ICON
 ClinPhone
 INC Research
Sales/ Marketing/
Education
Outsourcing
 Advogent
 PDI
 Physicians Interactive
 IMS Health
Information
Services
Outsourcing
 Epocrates
 ImpactRx
 PDR health
 Wolters Kluwer
 Verispan
Source: Press Searhes
Services
 Clinical trials (Phase I-IV)
 Data Analysis
 Evidence based services
 Late stage services
 Sales services – customized solutions, CRM, communications,
event management & logistics
 Marketing services – consulting, research, promotions
 Education – interactive services targeted at physicians
 Clinical information, decision support tools, and interactive
information services
 Medical information for primary care physicians
 Physician promotion impact analysis
 Patient education
Appendix
Off-shoring Landscape - India
Development
Company
Partner
GSK
Ranbaxy,
TCS, Captive
J&J
Aurigene
Aventis
Pfizer
Cognizant
Novartis
Captive
Astra
Zeneca
Captive,
Cognizant
Eli Lilly
Jubilant,
Nicholas, TCS
Merck
HMP, Advinus
BMS
Syngene, HMP
Roche
TCS
Wyeth
GVK
Contract
Manufacturing
IT
BPO
Discovery
Clinical
Trials
Clinical Data
Management
Site
Management