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Portfolio Simulation / Forecasting:

Selecting improvement initiatives

to maximize “points of leverage“

May 1, 2006

Alan Poirier Director, Analysis Metrics & Performance Group

Pfizer Global Research & Development

2006 ProModel Solutions Conference

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The Context

• Using Portfolio Simulator - to assess Initiatives to Improve Productivity.

• "Assessing the Impact of Clinical Study Speed Targets on Portfolio Yield - where does performance improvement matter most ?"

• Every Pharmaceutical company must deliver clinical trials to standards of quality, speed & cost. This analysis looks at the performance of individual segments of clinical studies, and asks - if you have an understanding of the range of potential improvement that is possible, where would you focus your process improvement initiatives? The analysis uses industry benchmarks to assess what's possible, develop several performance scenarios which are applied to the entire Pharmaceutical portfolio, looking at the scenario impact on several Key Performance Indicators (KPIs).

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Make the discussion Objective

• Performance improvement initiatives can originate anywhere – inside or outside your business. Some may have strong department advocacy.

• Selecting the best strategies for performance improvement must be an objective exercise.

– Validate (or dilute) the advocacy with objective analysis !

• Use Simulation technology as an objective prototyping workspace, where process improvement proposals can be evaluated.

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1: Document (and agree) on your process.

Enrollment

Treatment

Data Cleanup

Analysis &Reporting

StudySetup

Decision

ProtocolDevelopment

LP ENROLLED LPLVFINAL REPORT

DRAFTREPORT

PROTOCOL APPROVED

Decision

• If you have a portfolio of projects, and they all go through the same process – where should improvement efforts be focused ?

• High Attrition and timeline variability can complicate the mathematics.

Decision2A

Decision2B

Decision3

Process Details

Project A75%

attrition25%

attrition

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2: How much can we improve ?External benchmarks suggest potential opportunities

Enrollment

Treatment

Data Cleanup

Analysis &Reporting

StudySetup

Decision

Study Segment

(KPIs)

Hypothetical Baseline Performance *

External Benchmarks

(Potential Performance)

Protocol Development 90 days 60 days

Study Setup 120 days 80 days

Enrollment 280 days 200 days

Treatment Per Design Per Design

Data Cleanup 45 days 15 days

Analysis & Reporting 120 days 80 days

ProtocolDevelopment

LP ENROLLED LPLVFINAL REPORTDRAFT

REPORT

PROTOCOL APPROVED

DBLock

* Hypothetical Data – not representative of Pfizer clinical study performance

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3: Collect ProposalsProposed Improvement Initiatives

• After internal discussion – assume that three initiatives are proposed to deliver the potential performance improvements.

• We probably can’t do them all – so we must have a means to assess their relative merit.

Feeder Sites

Protocol Outsource

New Technology

Enrollment

Treatment

Data Cleanup

Analysis &Reporting

StudySetup

Decision

ProtocolDevelopment

LP ENROLLED

LPLV

FINAL REPORT

DRAFTREPORT

PROTOCOL APPROVED

Decision

DBLock

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Details about the Proposed Initiatives(Initiatives become Scenarios in Portfolio Simulator)

1. Protocol Outsource: – For a $20m annual cost, an external vendor will handle the entire protocol

development step, and protocol approvals will be delivered 20 days faster. As an initiative, the cost can’t easily be shared to each project, and must be carried as an annual burden.

2. “Feeder” Site Enrollment:– Add “feeder-sites” per study [ $1m extra cost per study] – but this delivers

the FPFV 15 days faster.

3. New Technology:– New technology can save 20 days from LSLV to DBLock in each study,

but will cost $5m / study to deploy.

The Major Challenge – is being able to comfortably translate Initiative Proposals into conservative performance improvement estimates.

The Major Challenge – is being able to comfortably translate Initiative Proposals into conservative performance improvement estimates.

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4: Agree on the evaluation criteria

• Agree which Key Performance Indicators we will use to decide the relative merit of initiatives. Before discussion of which Improvement Initiative to pursue, we must agree how we will assess the success of any initiative on our process for delivering the project portfolio.

• Example of potential Key Performance Indicators (KPIs):– Time to the final Decision (Decision3)

– Cost to deliver the decisions for 5 projects

– The Productivity (as measured by NPV)

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Portfolio Simulator Setup

• Each Proposed Initiative is translated into a Scenario in Portfolio Simulator.

• Setup scenarios to deliver the agreed Key Performance Indicators we will use to decide the relative merit of initiatives.

• Scenarios run against a sample Portfolio of 5 projects – all starting Phase 2A in the next 2 years.

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KPI : Time to Decision3Gantt Chart shows Timeline Differences

• The Gantt shows the progressive time advantage of the New Technology Proposal, followed closely by Protocol Outsource

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KPI : Cost to Decision3

• The Protocol Outsource appears to be the highest cost option – but it does get to the decision point faster.

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KPI : Productivity (NPV)

• The NPV favors the New Technology proposal.

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Conclusion

Use simulation technology to make the discussion more objective.

1. Agree on the process you are evaluating

2. Use external benchmarks to decide how much improvement is possible

3. Collect improvement proposals

4. Choose your evaluation criteria (KPIs)

5. Evaluate & discuss

Thank YouThank You