“The spending race is over in pharmaceutical R&D, with companies now focused on DOING MORE WITH LESS,” headlined an article in the June 7, 2010 C&EN. In “Research Recalibrated,” (pp.13-18), Lisa M. Jarvis reported on the steps Merck, Pfizer and others are taking to create “ a more robust new-product pipeline for less research money.”
CIMS Sponsor Eisai Inc.(www.eisai.com) faces the same environment. A U.S. pharmaceutical subsidiary of Tokyo-based Eisai Co., Ltd., Eisai calls itself “a human health care company seeking innovative solutions in disease prevention, cure and care for the health and well-being of people worldwide.” The company devotes approximately 22% of its worldwide revenue to R&D.
“We recognize that the landscape is really changing for the pharmaceutical environment — from a global perspective, a legislative perspective, from many different perspectives,” says Trudy Burke, Senior Director for Eisai’s Baltimore, Maryland manufacturing facility and the Gliadel® Wafer supply chain.
“We wanted to make sure that we had the capabilities and understanding to not only be successful short-term but moving forward as well,” she explains. “We were moving from having two blockbuster drugs that were facing loss of exclusivity to really looking into the future and being a global supplier. We realized that our traditional management and continuous improvement processes were no longer enough to meet future business needs.”
To help Eisai make the changes deemed necessary to transform its production and supply operations “into a more marketsavvy organization,” management turned to CIMS in 2009 and together they formulated the three-phase Innovation Initiative that Burke describes now.
The first phase was designed to prepare the Product Supply organization leaders “to be able to define, plan and lead a set of lasting ‘step function’ improvements to the organization’s cost structure and to the value it delivers to its customers.”
This, in turn, consisted of the three modules illustrated in the diagram, on the next page.
1. The first module involved understanding the compelling need for change. A 26-participant team worked through what was going on in the environment, what was having an impact on Eisai, what the business drivers were, and why we really needed to do something in order to continue being successful and supplying products for patients.
The exercise focused on our functions and helped us to understand why the change was required as well as our dependency on both internal and external organizations and functions. We examined the market signals and came up with the following eight industry drivers that would be critical to our business and our operations moving forward:
-Growing adoption of price restrictions globally.
-Growing economic power and needs of the developing world.
-Declining R&D productivity.
-Emphasis on pay-for-performance measures.
-Emergence of mini-busters rather than block-busters.
-Emergence of biotech and biologics.
-Increasing emphasis on personalized medicine.
-Increasing use of pervasive monitoring.
This exercise helped us to understand what new capabilities we needed versus our more traditional way of looking at an organizational structure. Where did we need to transform ourselves to be best in class? What types of things did it make sense for us to continue in order to maintain a given level of excellence? Where did we need to partner with another enterprise?
And then, was there anything that didn’t make sense for us to do internally and that we should shed or outsource?
2. The information we learned in this first module helped us to look at our business model and determine what kind of organization we needed in terms of capabilities and key outcomes. We listed potential step function changes or innovative areas that we were going to prioritize and determined which were right for us to pursue. We assessed them on the basis of increasing patient value while at the same time decreasing overall health care costs. We wanted patient value to go up and costs to go down.
3. The final module focused on building a culture of innovation. CIMS facilitators helped us to assess our current culture within departments, sites and certain corporate functions. We were able to identify cultural behaviors that could either hamper or facilitate innovation and learn how we could, as leaders and role models, coach the organization into creating a culture of innovation. Without a supporting culture, none of the innovative ideas we had were going to be successful. The strategy was really dependent on the culture. In addition, Eisai’s mission is one of human health care (hhc) where we give our first thoughts to patients and their families and contribute to increasing their benefits.
Discovering the Boundary Spanners
One exercise that made a big impact on us was to diagram our information flow and our formal versus informal networks. This allowed us to identify a few key individuals who were very critical in facilitating information flow.
We actually identified boundary spanners who performed that function without it being an explicit part of their assigned roles. It was simply part of “who they were” as opposed to the organization making a conscious decision to do it or really understanding the value of boundary spanning.
That was a key discovery. One of the outcomes from it was that we are incorporating formal boundary spanning into all of our leadership objectives. We recognize that boundary spanning, both internal and external to the company, is critical for innovation.
Four Innovation Concepts
We also identified four different innovation concepts that we need to systematize in order to continue to facilitate and foster innovation and innovation management within our organization.
One of those is an Idea Management system, which we are currently piloting for Eisai Inc. at our RTP facility.
The second is Customer Connectivity — putting systems in place to interface with our managed care and distribution chain customers. Having direct contact through existing channels will enable Supply Operations to identify trends and emerging opportunities, and enable us to provide higher satisfaction to our customers. This, in turn, will allow us to make improvements that will increase customer satisfaction consistent with Eisai’s hhc mission.
The third is Patient Connectivity, which involves the traditional complaint management as well as being able to socialize the patient’s needs and concerns with our employees. We will establish systems that will allow us to connect with patients, caregivers and key opinion leaders in order to understand and evaluate the effectiveness of our products and services in meeting the critical needs of our patients.
The fourth is to make boundary spanning a formal part of our daily business operations.
These were all things that we may have done in the past to some extent, but certainly didn’t have systematized. As a result, we are in the process of putting systems in place to really facilitate that information flow.
Now we’re moving to the next phase, deployment. In addition to keeping our change opportunities and innovation systems moving forward, we’re addressing the culture and communication aspects at regular meetings and asking each leader to share the information within his/her own organization.
Progress in these areas is checked monthly by a Product Supply Leadership Team. In addition, the team is developing a 3-5-year plan intended to transform Eisai’s production and supply operations into a more market-savvy organization, attuned to the macro-challenges— and opportunities— facing the pharmaceutical industry.
Toward the Cloud
Cloud computing is one of these macro-challenges and opportunities. Eisai has begun working with CIMS to utilize the advanced data analytics capabilities made possible by the cloud for delivering lower-cost drugs to underserved regions of the world.
Louis C. Arp, Eisai’s vice president and general manager for supply operations, explains that, “The objective of the Cloud Computing—Text Analytics Utilization initiative is to accelerate the creation of Eisai institutional knowledge on supply chain current practices for low-income countries. We hope to have an outcome that identifies feasible supply chain options that we can then pursue in more detail before converging on our business strategy.”
Trudy T. Burke
Baltimore & Gliadel Operations
Eisai Inc., Baltimore, MD