Life Sciences the way we do it

Lifecycle Management in the

Pharmaceutical Industry: The
Unexploited Potential

The challenges in the pharmaceutical In this changing industry environment,

industry are multilayered. The cus-
tomer landscape is changing: Physicians’
prescription decisions are coming
under the influence of empowered
patients, payers, and further-reaching
regulations, and the physicians them-
selves are becoming more remote.
Healthcare cost-containment measures
are accelerating the penetration of
generics and the restriction on pricing
and reimbursements for originals.
Product development and production
are becoming more complex through
increased involvement of various par-
ties such as development, manufactur-
ing, marketing and external partners.
and with many pharmaceutical compa-
nies facing a serious drought in R&D
pipelines and the expirations of some
blockbuster drugs, industry experts are
acknowledging the importance of
Lifecycle Management (LCM) to opti-
mize the net product value.
These were the findings of Capgemini’s
Vision & Reality Research, an annual,
in-depth research report into key
changes that impact the life sciences
industry.

“ There is no
doubt that, in the interim
between now and capitalizing
on the new science of genetics and
genomics, we’re going to be more
dependent on existing product pipe-
lines. The smart companies will look to
wring everything they can out of their

”
existing products.

Chris Towler, former director of Global

Regulatory Policy at GlaxoWellcome

Perceived importance of Lifecycle Management by industry experts
Importance of Lifecycle Management
over past 5 years
38%
23%
13%
Very Impor- Average
important tant
Source: Capgemini Vision & Reality Research
In contrast to the perceived impor-
tance of LCM now and in the future,
pharmaceutical companies still con-
sider themselves to be lacking in
important areas:
• Limited commercial input in early
stages
• Activities not started early enough
• Too much focus on revenue rather
than profitability
• Lack of leadership/unclear responsi-
bilities and a limited cross-func-
tional alignment
• Despite pockets of excellence, LCM
implementation is inconsistent,
lacking in rigor
Only a small number of success sto-
ries in the pharmaceutical industry
show that effective LCM implementa-
tion can be highly profitable, such as
AstraZeneca’s Losec/Nexium, Bayer’s
Adalat and Pfizer’s Procardia.
Lifecycle Management Bench-
marking Study
In addition, Capgemini recently con-
ducted a Lifecycle Management
Benchmarking Study to identify major
LCM practices in the pharmaceutical
industry and learnings from other
LCM experienced industries.
Vision & Reality Research “In-
creasing the lifetime value of
Change of importance of Lifecycle Management
over next 5 years pharmaceutical products”
60%
Study participation from:
• Over 80 pharmaceutical executives
30%
from North America and Europe
23% across all key functions
• Over 7,500 physicians worldwide
3% 2%
4% via an electronic survey
0%
Less Not Signifi- More Average Less Signifi- • US and European payer organiza-
important important cantly important important cantly
more less
tions
important important
• Follow-up interviews with key
industry figures and analysts
We compared the current status of at all times, and almost no one in the
LCM practices of major and mid-sized study had developed a comprehensive
pharmaceutical companies to identify performance measurement system to
emerging best practices. In our study track the effectiveness of its LCM
we identified four critical areas of operations.
LCM capabilities within the pharma-
ceutical industry: One key differentiator for the leading
1.LCM organization and governance implementers of LCM is the degree to
2.Core LCM processes which they focus on building genuine
3.Knowledge and skills necessary to market insights into their LCM strate-
support the LCM processes gies. Another is how they engage
themselves to continuously innovate
4.Information and performance indi-
and improve their LCM practices.
cators needed to track and manage
LCM effectiveness
Some of the smaller pharmaceutical
Although none of the major pharma- companies show more innovation in
ceutical companies excel in all capa- their practices – varying from taking a
bility areas, some have taken a clear much longer perspective on planning
lead in specific areas. to organizing their company com-
pletely around project teams rather
Governance of Lifecycle Management than functions.
varies between those companies that
see themselves as marketing-led and
those that see themselves as develop-
ment-led. However, the results suggest
that the key to success is not which
method is selected, but rather whether
the method is supported with effective
“balances”, such as ensuring clear
commercial review and sign-off of stra-
tegies for companies that lead LCM
from development.
Most companies now have defined
processes for developing LCM strate-
gies and reviewing progress. However,
few apply these processes rigorously
 Life Sciences the way we do it

Lifecycle Management Bench-

marking Study Lifecycle Management Capability Model

Study participation from Organization & Governance

Clear ownership and drive for LCM across all functions
• Nine out of the twelve top pharma-
ceutical companies
Core
Develop- Marketing Supply
• Selected mid-sized pharmaceutical Operational Discovery ment & Sales Chain
Value Chain
companies
Processes
• Non-pharmaceutical industries Rigorous, consistent, timely, collaborative

… through market research and one- Knowledge & Skills

Cross-functional, business-focused
on-one focus interviews.
Information & Performance indicators
Transparent, profit-focused measurement

Lifecycle Management Capa- IT Tools/Enablers

bility Areas Consistent information, collaborative workflow

1.LCM organization and governance:
• Organizational balance between
development and commercial
• Formal vs. informal control of
LCM
• Use of dedicated LCM unit
2.Core LCM processes:
• LCM strategy and planning
process
• LCM decision-making and
progress review processes
3.Knowledge and skills necessary to
support the LCM processes:
• Sophisticated market insight to
identify needs/wants of changing
customer landscape
• Rich cross-functional and inter-
organizational collaboration to
overcome increased complexity
in organization and processes
• Continuous innovation of LCM
approaches to be armed for tough-
ening healthcare environment
4.Information and performance
indicators needed to track and
manage LCM effectiveness:
• Rigorous and interlinked key
performance indicators aligning
all functions behind LCM objec-
tives
• Information for decision-making
We further investigated how other
LCM-experienced industries – fast-
moving consumer goods/fashion,
automotive and aerospace sectors –
scored on these LCM capabilities. The
results suggest the LCM practices of
these selected non-pharmaceutical
industries could be a role model for
the pharmaceutical industry. Best-in-
class market-insight generation comes
from close proximity to customers,
which is achieved through the right
organizational structure, processes,
technology and culture. A rich cross-
functional and inter-organizational
collaboration is achieved by stringent
LCM orientation at each step of the
product planning. This needs to be
supported by formalized processes/
contracts, by professionally managing
product data/information, and by
Capgemini’s Lifecycle Management Quick-Scan Methodology
Step 1:
Steps
LCM status quo analysis
Objectives • Understand status of
LCM implementation
Key Activities • Identify strengths and weaknesses of
LCM implementation based on Capgemini
expertise
• Identify and prioritize key topics of LCM
implementation
• Identify needs to further enhance the
implementation of LCM and its respective
initiatives
facilitating workflow simulation and
modelling with multiple stakeholders
inside and outside the company.
Based on Capgemini’s experience in
LCM, our adaptive Lifecycle Manage-
ment Quick-Scan methodology
would support you in:
• Understanding the implementation
status of your current LCM capabili-
ties and practices.
• Identifying both strengths as well as
areas for improvement to enhance
LCM implementation and its respec-
tive initiatives.
• Developing a feasible and practical
implementation plan for prioritized
LCM topics.
• Accelerating further institutionaliza-
tion of LCM practices and capabili-
ties in your organization.
Step 2:
LCM implementation preparation
• Get commitment from key
LCM stakeholders
• Present findings from focus interviews
• Prioritize key LCM topics for
implementation
• Develop implementation plans for
prioritized topics

and control transparent across

organization • Status quo of LCM implementation
• Overview on LCM implementation
• Prioritized key LCM topics
• LCM implementation plan
Deliverables
related needs and initiatives • Commitment from key stakeholders
Capgemini Life Sciences
Capgemini’s Life Sciences practice is
one of the world’s leading consultan-
cies to the pharmaceutical, biotech-
nology and medical equipment indus-
tries. Founded in 1993, the Life
Sciences group has 2,500 affiliated
professionals worldwide, among them
a global team of 200 Strategy and
Transformation consultants dedicated
exclusively to life sciences issues.
Capgemini has consulted with over 90
of the top companies of this industry.
A combination of deep industry in-
sights and leading-edge transforma-
tion capabilities make this a unique
offer to the life sciences industry.
About Capgemini
and the Collaborative Business Experience
Capgemini, one of the world’s
foremost providers of Consulting, Tech-
nology and Outsourcing services, has a
unique way of working with its clients,
called the Collaborative Business Expe-
rience.
Backed by over three decades of industry
and service experience, the Collaborative
Business Experience is designed to help
our clients achieve better, faster, more
sustainable results through seamless
For further information and discussion
on Capgemini’s Lifecycle Management
expertise please contact:
www.capgemini.com/lifesciences
Capgemini’s Life Sciences solutions
cover all components of the life sci-
ences value chain, ranging from
strategic planning through to opera-
tions excellence, technology imple-
mentation and outsourcing.
Recognized as a thought leader in this
sector, Capgemini brings an insider’s
perspective to the challenges facing
life sciences companies and employs a
deep industry understanding to pro-
vide integrated global solutions for
top-tier clients in the sector.
© 2006 Capgemini. No part of this document may be modified, deleted or expanded by any process or means without prior written permission from Capgemini 05-0056
access to our network of world-leading
technology partners and collaboration-
focused methods and tools. Through
commitment to mutual success and the
achievement of tangible value, we help
businesses implement growth strategies,
leverage technology, and thrive through
the power of collaboration.
Capgemini employs approximately 61,000
people worldwide and reported 2005
global revenues of 6.954 billion euros.
Oliver Freese
Principal, Capgemini Life Sciences
oliver.freese@capgemini.com
mobile: +49 (162) 234 3656
or
Monika Hespe
Life Sciences Marketing
monika.hespe@capgemini.com
phone: +49 (30) 88703 175