1. BIOTECH SUPPLY October 8-9, 2012 Crowne Plaza, Foster City, CA Tufts CSDD Global Clinical Supply Chain Market Study Mary Jo Lamberti, PhD Senior Project Manager Tufts CSDD

2. Key Areas Explored in Study Roles and responsibilities Technology and use of resources Management challenges & strategy Outsourcing approaches Future Outlook

3. Study Highlights Overview Timely study capturing major shift in sponsor clinical supply chain management practices Transition of role from insulated, support function to a more strategic, multi-disciplinary front-line function » Increasing importance of forecasting and risk management » Cross functional collaboration and coordination Growing receptivity to outsourcing Baseline measures of practices and key challenges 3

4. Methods Tufts CSDD developed online survey with input from supply chain experts in industry and provider organizations Survey distributed through contacts and mailing lists in Jan-Feb 2011 Roundtable Meeting of invited participating companies held in mid-March

5. Survey Respondents 20 completed surveys Primarily large/mid-size biopharma companies Majority (80%) vice president/director level Median 20 years experience in biopharma industry – Minimum of 3 years Median 3.5 years in current position – Minimum of 1 year

6. Global Clinical Supply Chain Market Roundtable 12 senior-level clinical supply management professionals from top biopharma companies in March 2011 in Boston Very participatory group – corroborated and added to survey findings and interpretation; interest in forming an ongoing working group Supply management role is evolving from insular/traditional role into a strategic function with far more cross-functional coordination and collaboration Clinical supply management is becoming increasingly complex and demanding—given time pressures and global logistics challenges More sophisticated forecasting and risk-management becoming critical capabilities

7. Primary Responsibilities Responsibility% of Respondents Forecasting95% Manage supplier relationships85% Track supplier performance metrics70% Supplier assessment/selection65% Develop outsourcing strategy60% Develop contracts50% Negotiate contracts40% Other*20% * Other responsibilities include supply management and IVRS management

8. Technology Usage Study Drug Forecasting Respondents use both manual approaches (70%) and forecasting programs (75%) More than half reported using web-based approaches Respondents indicated that the most demanding resource requirement area is forecasting supplies

9. Barriers to Implementing New Technologies Cost (both dollars and resources) Difficulty integrating new and existing systems Lack of standards between systems

10. Most Demanding Resource Requirement Areas

11. Top Ranked Clinical Supply Chain Management Challenges 1. Short lead times 2. Operations-supply team communication 3. Protocol readiness/accuracy 4. Better forecasting 5. Visibility

12. Top Factors Impacting Clinical Supply Chain Strategy 1. Increasing number of trials 2. Globalization of trials 3. Regulatory requirements 4. Adaptive trial designs 5. Mergers and acquisitions

13. Top Factors Impacting Clinical Supply Chain Management Success Shorter study start-up timelines Study site locations Increasing number of study subjects Shorter development timelines

14. Factors Impacting Clinical Supply Chain Management Success

15. Top Clinical Supply Priorities in 2011 1. Improve forecasting 2. Establish Preferred Provider partnerships 3. Reduce operating costs

16. Frequency of Activities Outsourced

17. Strategies to Optimize Clinical Supply Chain Management % of Respondents Functional outsourcing 60% Tactical/study-specific outsourcing 60% Regional hubs 65% New technologies 40% Investing in own capabilities, such as adding owned depots 20% Other* 20% *Other strategies include drug pooling, IVR capabilities, and labeling

18. Outsourcing Relationships Used Strategy% of Respondents Individual clinical supply services for each trial 58% A full range of clinical supply services to a provider for each trial 16% A service provider to manage the entire clinical supply function across multiple clinical trials 16% A combination of types depending on the trial 11%

19. Metrics Used to Assess Clinical Supply Vendor Relationship Quality

20. Metrics Used to Assess Clinical Supply Solution Success

21. Initiatives Underway Comparator and Co-Therapy Sourcing Roundtables Follow up meetings held in Boston in October 2011 and London in March 2012 20 senior level managers from 15 top biopharma companies attended each meeting Meeting focused on Issues and challenges in comparator and co-therapy sourcing Next steps included plans for industry collaboration and dissemination of best practices

22. Initiatives Underway Comparator and Co-Therapy Working Group Study Tufts CSDD 2012 Study Multi-sponsor format; conducted between April/May and December 2012 Key metrics: Growing proportion of comparator and co-therapy use in protocol designs Total amount spent on comparators and co-therapies between 2009 and 2012 (estimates) Comparative increase in cost relative to per patient costs per protocol, procedural costs per protocol, other clinical supplies Total amount of comparator and co-therapy drug not used and estimated economic cost of waste

23. Q&A and Thank You! Mary Jo Lamberti Mary_Jo.Lamberti@tufts.edu