This paper explores biopharma industry challenges in product development and innovation, defines PLM for the industry and provides guidance on how to get started on the PLM journey.

1. Driving Innovation
in BioPharma:
From Discovery to Delivery with
Product Lifecycle Management
Kalypso White Paper
by Scott Gibbard, Dr. Horst Groesser and Andrew Hunter
Normal
Reversed

2. Industry Challenges
The economic challenges faced by today’s biopharmaceutical industry
are well documented. Revenues are contracting due to patent expiries,
generics competition and pricing pressure from payers that are demanding
clearer demonstration of product value. By 2016, medicines that generated
sales of $133 billion in 2010 in the US will have lost patent protection.1
Innovative new products are scarce as R&D budgets chase increasingly
difficult scientific problems. For those products that successfully make it
through development, the regulatory approval bar is higher than ever.
By 2016, patent exclusivity Much of this is not recent news. Drug discovery,
development and commercialization have always been
expiries in one or more developed complex and risky. The vast majority of new product ideas
markets will impact 13 of the fail. Ideas that do make it out of the labs face an extremely
lengthy and expensive journey navigating a highly
top 20 selling medicines of 2010, regulated environment where the rules vary by country.
including Lipitor®, Plavix®, Advair The science is usually complicated and always unpredictable,
generating enormous amounts of data and experimental
Diskus®, Crestor® and Nexium®.2 results from both failed and successful programs.
And yet, many steps taken by companies over the last several years to
address these business challenges have only added to the complexity:
Figure 1:
Mergers and acquisitions Scientific partnering and collaborations,
Actions taken to
have made companies bigger often operationally complex,
address biopharma
and even more complex, have collided with the
business challenges carving already siloed culture of monolithic
functions into specialized research organizations
sub-functions. Rationalizing not accustomed to
differing processes, systems truly sharing their work.
and cultures has proven to
be difficult.
Expansion into Portfolio diversification
emerging markets into new therapeutic
has required areas or biologics (novel or
unfamiliar regulatory biosimilars) has required
environments to be companies to build new
learned and commercial scientific capabilities and
models to be modified develop a deep understanding
or rethought. of new technologies.
The biopharma industry’s ability to discover, develop and launch profitable
new products has been diminished by the pervasiveness of complexity.
In order to drive growth from innovation, companies must manage this
complexity within their product development and innovation processes.
1, 2 The Global Use of Medicines: Outlook Through 2016, July 2012,
IMS Institute for Healthcare Informatics
Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management 2

3. Manage the Complexity of Innovation
Innovation is More Than Scientific Discovery
Innovation in biopharma is often understood as scientific breakthroughs in
basic research and discovery. While the discovery of new molecular entities
is the lifeline for biopharma companies, true innovation is not just about
the science – it also requires transforming those breakthrough discoveries
into marketable products and successfully launching them in highly
regulated markets.
In addition to developing new drug products, companies can be
innovative in many other ways. Product and service bundling, supply chain
restructuring, and information asset management are just a few examples
of areas with great innovation potential. While these forms of innovation
may not be viewed in the same light as launching a new product after
making a high-profile scientific breakthrough, they can accelerate product
commercialization, and ensure safe and compliant delivery once the
products are on the market. In fact, these other forms of innovation can fuel
scientific discovery by allowing quicker answers to “what-if” experiments,
ultimately leading to faster advancement of knowledge.
When operating in such a complex environment, there are three
fundamental capabilities that biopharma companies need to focus on
improving to maintain and enhance their innovation performance:
•• Visibility. Scientists with better visibility into one another’s work
improve the chances of “connecting the dots.” Better visibility
helps management set priorities and ensure resources are allocated
in line with those priorities. It can also smooth the transition
from research to manufacturing and commercialization.
•• Traceability. Better traceability improves the organization’s
ability to maintain compliance and address regulatory
inquiries. It also enables improved reuse of knowledge
assets by allowing product development teams to
retrace development decisions made in the past.
•• Collaboration. Drug development is a complex, cross-functional
endeavor. Increasingly, it involves partnering with researchers
from many different organizations. Better collaboration enables
a richer understanding of scientific challenges and more
innovative product solutions.
3 Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management

4. Improving visibility, traceability and collaboration can have a significant
impact on many important biopharma business processes, leading to better
product innovation. Figure 2 explores several examples:
Process Challenge Impact Solution
Regulatory submissions Complex cross-functional Delayed time to revenue; Improved global
and product launches coordination, with global premature launches with collaboration using one
product launches adding increased compliance risk longitudinal product
layers of complexity data history, created
by many functions in
multiple formats
Regulatory compliance Coordination of supply Product recalls, or Improved integration of
for marketed products chain and regulatory even worse, product tools for compliance and
functions working with withdrawals resulting change control based
different, non-integrated in loss of revenue on a single source of
systems and reputation product information
Handover from R&D Classic “throw over Organizational handoffs Improved visibility and
to manufacturing and the wall” knowledge and no accountability; collaboration between
product transfers from transfer often addressed knowledge loss; difficulty sending and receiving
one plant to another by carving out an manufacturing at scale organizations
organization to manage
the transition
Portfolio prioritization Often treated as a Delayed kills of failing Improved visibility
once-a-year event due to projects; resource and and collaboration that
the large effort required funding allocations enables important
to gather data get out of synch portfolio decisions to be
with priorities event-driven throughout
the year; timelier
re-allocation of
funding and resources
Product packaging Different packaging Delayed launches into Reduced compliance
and labeling (or even branding) and new markets; compliance risk through global
labeling in different risks with packaging or coordination of
markets, complicated label changes packaging and
by expansion into labeling processes
emerging markets
Figure 2: A management discipline called product lifecycle management (PLM) is an
Impact on biopharma effective approach to improving visibility, traceability and collaboration for
business processes
a wide range of business processes that create or use product information.
Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management 4

5. Call to Action: Drive Innovation with
Product Lifecycle Management
What is PLM?
Product lifecycle management (PLM) has transformed how products
are developed and commercialized in several industries over the last two
decades. PLM is the process of managing the entire lifecycle of a product –
from its conception, through discovery, development, regulatory approval,
to launch, production and end-of-life. It is a technology-enabled discipline
that integrates the processes, data, people and enterprise information
systems comprising a company’s product development, introduction and
change control capabilities.
Adoption
Level
PLM High Low
Maturity
Aerospace, Process,
Defense, Medical Personal Care, BioPharma,
Automotive Industrial High Tech Device Household, CPG Nutraceutical Services
Established Industries Growth Industries Emerging Industries
PLM should not be confused with “lifecycle management” (LCM), a phrase Figure 3:
often used in biopharma to describe the practice of maximizing a product’s PLM adoption
across industries
lifetime value by defending/extending market share of approved products
through the pursuit of additional indications, new formulations and
expansion into new markets. PLM is a broader concept that defines how
product information is managed throughout the lifecycle of the product.
5 Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management

6. Portfolio
& Pipeline
Management
De
Strategic (Franchise and Therapy Area
Capabilities Strategies, Portfolio Balancing)
Collaboration S
Product
Portfolio Data
Internal
& External
Collaboration Manufacturing
& Supply Chain
Product An
Development
Product Record lo
Discovery & (Illustrative)
Packaging m
Product
Development Development
& Labeling dr
Capabilities & Tools
Suppliers
Quality & & Sourcing
Compliance Program
Data
PLM Platform ERP
Descriptive Product Data Transactional Data
Figure 4: Innovation in the biopharma industry is not going to get any easier,
Capabilities within or any less complex. Given the current challenges companies are facing,
the PLM platform
it is now time to adopt PLM principles in biopharma in order for companies
create an integrated
to succeed at developing and launching new products that deliver desired
set of capabilities
and Product Record in-market results.
The Product Record
At the core of PLM is the Product Record – a single version of the truth for
a product and all product-related data. It contains all of the information
necessary to design, develop, produce and modify the product.
The Product Record is based on a logical product data model that captures
comprehensively:
a. The physical entities that a product consists of
(materials, etc.)
b. The informational entities that are associated with
a product or its physical entities (regulatory data,
supplier information, material specifications, etc.)
c. The structural relationships between these
entities (product structure)
d. Attributes describing the physical and
informational entities of the product
Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management 6

7. Figure 5 shows an illustrative example of
a basic, logical data model for a drug product. Finished Product
Packaging
Yet PLM goes beyond solely providing a Primary Packed
version-controlled source of product data for Delivery Device Packaging
nd Therapy Area all of the business functions. It incorporates Drug Product
rtfolio Balancing)
all processes that generate, modify or affect Specification Excipient
uct product data along the product lifecycle. Pharmaceutical
o Data Intermediate
Raw Ingredient
Manufacturing Drug Substance
& Supply PLM processes capture both structured data
Chain
An illustrative
Development documents. In biopharma, PLM links the
and Chemical
logical data Intermediate
Packaging“world of science” with the “transactional model for a
& Labeling drug product
world” of enterprise resource planning and Raw Ingredient
ers
ing manufacturing, by transforming and enhancing
scientific and experimental drug information
into descriptive drug product master data.
Figure 5:
PLM puts a company’s most valuable innovation
m ERP
asset – product data, from concept through
Drug product example
commercialization to end-of-life – at the center
of their innovation efforts.
ata Transactional Data
The product data that forms the backbone
of PLM represents all types of data collected
It is now time to adopt PLM
during the entire product lifecycle – including principles in biopharma in
early concept ideas, market research, business
cases, clinical trial results, description of
order for companies to succeed
key processes, phase gate reviews, clinical at developing and launching
strategies, and launch plans. Any data that
describes the product and its properties
new products that deliver
can be an element of the Product Record. desired in-market results.
Can PLM Work in BioPharma?
Significant benefits of PLM – such as faster product time to market,
and increased productivity in R&D and product/technical operations –
have been realized in industries such as aerospace, defense, automotive,
high technology, medical devices, food and beverage, and consumer
packaged goods. Although the biopharma industry may represent a unique
combination of risk, complex science and regulation, its uniqueness does
not prohibit it from achieving the same benefits from PLM.
7 Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management

8. While product development and commercialization in biopharma is certainly
distinctive, several significant dimensions of complexity are not entirely
exclusive to the industry, as explored in Figure 6:
Figure 6: The takeaway for biopharma companies: several industries share similar
Comparison of complexity complexity characteristics, and have successfully implemented PLM
across industries
solutions to address these challenges while reinvigorating their product
innovation efforts.
Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management 8

9. Get Started
Six Tips for Starting the PLM Journey
Like most transformational changes, taking the first step with PLM can
be daunting. Fortunately, the nature of implementing PLM lends itself
to layering in capabilities as needed. Here are six tips for getting started:
1. Assess your current capabilities. Evaluate the maturity
of your current PLM capabilities related to strategy,
processes, data management and technical infrastructure.
Conduct interviews with a broad cross-section of the
organization to ensure accurate and balanced feedback.
2. Align on a vision. The insights gained from the current capabilities
assessment will provide the basis of your PLM vision. The vision
should crisply articulate your desired future state and support a
compelling case for change. The leadership team must align on and
believe in this vision, and be prepared to explain and support it.
3. Pick your leader…carefully. Like any major change, it matters
who the leader is for your PLM program. The leader should
be well respected and connected within your organization.
They must be a champion for change, and thus should deeply
understand and buy in to the promise of PLM to drive product
innovation. The leader should also have excellent communication
and influencing skills.
4. Develop a roadmap for a phased approach. Unlike other technology-
enabled transformation projects – ERP, for instance – PLM does not
need to be implemented with a disruptive “big bang” approach.
It can be implemented in phases – an approach that reduces risks,
breaks implementation into manageable “chunks” and minimizes
organizational impact. It also aids adoption by delivering a steady
stream of incremental value as the various capabilities are enabled.
5. Utilize rapid prototyping and iterative design. Use conference
room pilots, prototypes and sandbox environments from the
very beginning of the project to gather requirements as well as
to support organizational awareness. During implementation,
“go live” with basic functionalities, and add other functionalities
afterwards. Depending on the size and complexity of the
organization, a gradual roll-out by franchise, therapeutic area
(TA) or region might be the most suitable roll-out strategy.
6. Focus on quick wins. Upfront planning for PLM should be thoughtful
and holistic. Most of the benefits will come when product data
and processes from multiple business areas are implemented –
that’s when cross-functional collaboration and visibility really begin
to take hold. That said, select an early adopter area where you
expect to demonstrate immediate benefits – such as the Regulatory
Operations or Product Labeling group.
9 Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management

10. Summary: PLM Can Drive
Innovation in BioPharma
Growing complexity is changing the economics of drug development.
Many actions taken by the industry to date do not address the central issue
of driving innovation to produce more novel medicines to satisfy unmet
medical needs. Product innovation has never before been so imperative.
In this environment, biopharma executives must assess their innovation
capabilities by considering questions such as:
•• Are our current methods good enough to overcome
the growing complexity in our business?
•• How can we free up time to focus on real innovation?
•• Do we have a single source of truth for our product information?
•• Do we effectively learn as an organization from our
product development successes and failures?
PLM has transformed product innovation in other highly complex industries
over the last two decades, reducing time to market and improving product
development productivity as a result. The lessons learned from these
industries are relevant, and the biopharma industry must understand how
to apply them within their organizations. This includes recognizing that
their most valuable information assets – the product data – must be at the
center of their innovation efforts, not merely a by-product to be managed
by functional silos.
Adopting an entire lifecycle perspective to innovation will benefit the
measures that matter the most – truly innovative products that generate
real health benefits to patients and economic benefits to biopharma
companies. PLM processes and technologies can enable this kind of
real innovation.
Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management 10

11. About the Authors
Scott Gibbard has over 20 years of experience in engineering,
product development, strategic planning, performance
management and change management in biopharma and other
science-driven industries. He holds an MBA from Cornell University,
a Master of Applied Science from the University of Toronto Institute
for Aerospace Studies (UTIAS) and a Bachelor of Applied Science in
Engineering Science from the University of Toronto.
scott.gibbard@kalypso.com
Dr. Horst Groesser has over 20 years of experience in product
lifecycle management (PLM) and supply chain management in the
biopharma, medical device, high technology and manufacturing
industries. He holds a PhD in Mechanical Engineering and a
Diploma in Industrial Engineering from the Technical University
of Darmstadt, Germany.
horst.groesser@kalypso.com
Andrew Hunter has over 25 years of experience in product
development, project management and change management in the
biopharma industry. He holds a Master of Business Administration
from INSEAD, a Master of Science from the University of Warwick
and a Bachelor of Science in Mechanical Engineering from
Imperial College.
andrew.hunter@kalypso.com
Contributors: aurens Broekhof, Senior Manager laurens.broekhof@kalypso.com
L
Sunny Sun, Senior Consultant sunny.sun@kalypso.com
11 Driving Innovation in BioPharma: From Discovery to Delivery with Product Lifecycle Management

12. About Kalypso
Kalypso is the world’s premier innovation consulting firm, helping clients improve performance
by delivering on the promise of innovation. Kalypso offers clients full service capabilities including
Business and Innovation Strategy, Front End of Innovation, Portfolio and Pipeline Management,
Development and New Product Introduction, Value Management, PLM Technology,
Leadership and Learning, and Intellectual Property Management. For more
information, visit http://kalypso.com. Follow @KalypsoLP on Twitter
and on Facebook at http://facebook.com/KalypsoLP.
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