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EXCLUSIVE LIFE SCIENCE FEATURE leaders LIFESCIENCELEADER.COM APRIL 2014 32 Don't try to take a service model and apply it to a partnership model. It won't work. nal agreement, her next step was to find a CRO willing to participate in such a differ- ent type of collaboration. After speaking with some CEOs of pharma companies and CROs, she was convinced that her idea could be the future model of CRO-sponsor relationships. "Many of them were also looking at their own business models and finding much of their work was becoming extremely commoditized, rent- ing CRAs or just data management," she recalls. In fact, many of the people Jenkins spoke with believe the current service- provider model might not be sustainable for the next 10 to 15 years. NOT YOUR TYPICAL RFP PROCESS Her next step was to scope out an RFP, inviting all the big companies to bid for a single-source model that would be end-to- end — starting at protocol concept all the way through to filing and registration. "The CRO would have to set up its own unit to manage our portfolio," Jenkins explains. "There would be very high-level governance from the most senior levels of the CRO, and the financial model would incentivize both parties around the common goal." The RFP process lasted six months and involved many major outsourcing players. Eventually, two full-day, off-site meetings in Paris were scheduled for the final four potential CROs. According to Jenkins, this was not your typical RFP process. "We wanted it to be collaborative," she says. "We were building an innovation model, so we also needed to take feedback from the CROs on how they would build this model." In fact, during the discussions, the CROs frequently needed to be reminded of being willing to share their opinions. But Jenkins says on the Merck Serono side, they too had to change their thinking regarding how an RFP process was supposed to transpire. They had to forget about the traditional "just tell them what to do" model and the notion that there was a hierarchical order. When creating this type of collaboration, Jenkins advises, first and foremost, to ask questions of your CRO partner to find out what they think — don't just tell them what you know or want. AND THE STRATEGIC PARTNER IS? On May 15, 2013, Merck Serono announced it had selected Quintiles as its single- source CRO strategic partner. According to Jenkins, Quintiles was selected for three attributes. "Their scale and scope will give us geographic flexibility. Second, we felt they had a broad volume of experience in the areas in which we are interested — MS, oncology, and immunology. And the third reason was their sophisticated IT informat- ics systems." Of course, Quintiles' willing- ness to develop a very innovative financial model also played into this decision. When making such a game-changing move, expect a lengthy transition phase, the result of long industry cycle times and previously signed deals. You'll need to operate in both the old and new models, which can be difficult since people tend to revert to what is familiar. Jenkins stresses patience during this phase, and to expect that, at first, not everyone (on either side) will fully understand how to operate in the new model. MEASURING THE NEW MODEL From the beginning of the collaboration process, both companies agreed on the need for a governance structure equivalent to the type Merck Serono would have with any other pharma or biotech company. To achieve this, Quintiles established a Merck Serono business unit. Merck Serono estab- lished a similar unit dedicated to Quintiles. These operating units handle the day- to-day management of the partnership. Above that sits a joint steering commit- tee. "Kathy Ford, who's my global head of clinical operation, is always on the phone to Paula Brown-Stafford of Quintiles," Jenkins shares. The final level of the governance involves direct communication between herself and Quintiles CEO, Tom Pike. In addition to having the right gover- nance, Jenkins has the following advice if you create this type of collaboration. Put the work in up front to set a clear, shared vision, as this will be used by both com- panies to engage and energize people as to why the new model makes sense. Make sure the company cultures have the poten- tial to come together. According to Jenkins, "Cultures eat strategy for breakfast." Be brave on the financial incentives between organizations. "I can't share with you the details of the financial model," she states, "but both parties are highly incentivized to achieve the common goal." Set the right expectations internally with your manage- ment team using language they understand — don't give them the expectation that just because a deal has been done everything is going to be nirvana in six months or so. Her final tip: "Don't try to take a service model and apply it to a partnership model. It won't work." To measure the implementation of this new model, Jenkins has "three biomarkers of success" — operational, people, and financial. "With operational, make sure you measure cycle times throughout the pro- cess," she states. "Start from the beginning protocol concept, to the final stamped pro- tocol, to first patient in, first visit, 30 per- cent of your sites opened, and so on." These should be at or above industry benchmarks, and if not, be sure you understand why. "You've got to measure the basics," she says. Jenkins admits the people biomarker of success is more difficult to measure. "We conducted an employee survey at both companies, beginning with the people most heavily engaged in the new model," she states. This survey focused on employee feelings, behaviors, and culture. Jenkins intends to repeat the survey so they can track this metric throughout the partner- ship. For the final biomarker, she stresses that you understand the financials of your old model so you can benchmark your starting point. "For example, we have a good understanding of per-patient costs in the old model. Looking at these up front, we can get a pretty good sense if our per-patient costs in the new model look competitive, better, or worse than in the old model," she explains. But she counsels not to focus too much on costs. "I'm far more interested in timelines and quality." l MERCK SERONO'S PRESIDENT & CEO BELÉN GARIJO — ENABLING RISK AND REFUSING TO PLAY IT SAFE By R. Wright 0 4 1 4 _ F e a t u r e _ M e r c k . i n d d 7 0414_Feature_Merck.indd 7 3 / 2 4 / 2 0 1 4 3 : 5 7 : 0 2 P M 3/24/2014 3:57:02 PM