THE WHAT AND WHY OF REGULATORY OUTSOURCING

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1 WHITE PAPER THE WHAT AND WHY OF REGULATORY OUTSOURCING Today s evolving healthcare landscape poses unprecedented challenges to biopharmaceutical companies. Consolidation, budget cuts, restructuring, globalization how does a company compete effectively and increase market share? By focusing on core competencies. Outsourcing began in a meaningful way some 25 years ago as biopharmaceutical companies sought new ways to drive efficiency and reduce cost. More functions are being outsourced today, in fact, than anyone would have imagined even 10 years ago. The regulatory maintenance of launched products is no exception, with biopharmaceutical companies carefully designing outsourcing strategies that allow them to focus on developing and differentiating their pipeline with pricing, reimbursement and access strategies that drive commercial success.

2 Spending on regulatory outsourcing among biopharmaceutical companies grew 167 percent from 2007 to 2010, according to a Tufts Center for the Study of Drug Development report. 1 And why wouldn t it? These routine maintenance lifecycle activities such as label or manufacturing changes and renewals are low risk but critical to a company s bottom line. Research and development are the lifeblood of a biopharmaceutical company, but regulatory compliance, while perhaps less strategic, is vital to earnings and growth. In terms of what activities our clients think about outsourcing first, says MaryBeth Thompson, Vice President, Global Regulatory Services, it tends to incorporate anything that s tactical operations, movement of information, documentation management, or document flow, due to the fact that they are low risk activities, yet incredibly important. TRUSTED PARTNERSHIPS BASED ON DOTTED I S AND CROSSED T S Submitting regulatory paperwork that is accurate and meets submission timelines is critical. And the more products there are to maintain, the more markets there are that a company must keep abreast of and the more sense it makes to outsource. Chet Shemanski, Senior Director, Partnerships and Solution Strategy at PAREXEL, poses the decision to outsource in the form of a question: With tightened budgets prompting organizational prioritization, would you want to employ 50 people in your company to keep products registered or to focus on regulatory strategies for developing and marketing newer products under patent? It takes years to bring a new product to market and thousands of hours invested by whole departments to keep that product up-to-date from a compliance perspective once it launches. As regulatory budgets shrink and workloads increase, it s not unheard of for regulatory departments to demand as much as 25 percent of a company s total operational budget. Not every company has or wants to invest - the resources to hire additional staff to handle the ever-adapting demands of the regulatory process while not poaching from the resources needed for R&D. 1 Drug Sponsors Regulatory Experience Was Mixed During PDUFA IV, Tufts Center for the Study of Drug Development, May/June YOUR JOURNEY. OUR MISSION. TM 2

3 THINK GLOBALLY, THRIVE LOCALLY Growth and profits depend on international market share and, in the biopharmaceutical industry, a broader level of local, on-the ground expertise is needed now more than ever before. The markets of Brazil, China, India and Russia are highly coveted and come with their own set of rules. Even the European Union, which has one overseeing agency in the European Medicines Agency, can have 28 different interpretations of regulations for each of its member states. Efficiency in operation with appreciation of culture and bureaucracy is a must, but can pose a significant challenge for growing biopharmaceutical companies. PAREXEL s Shemanski concurs, It can take well over a year to get products up and out in new markets and that time can be all it takes for a company to lose its advantage. The need for local, regional and national regulatory expertise is intense and the supply of available experts is an issue. Outsourcing regulatory functions to a trusted partner with a thriving global footprint can easily become a competitive advantage. In some parts of the world, adds Thompson, PAREXEL knows not to simply put a dossier together and submit it based on rules and regulations. Our resources on the ground know that the dossier requires a wet signature instead of a photocopy. That kind of know-how can only come with experience. Even the largest, most well-funded companies can be overwhelmed with a region s culture and changing regulations. Outsourcing proves a worthy solution. We actually understand the challenges and implications of managing the regulatory requirements for these products across the globe, adds Katie Connelly, Vice President, Strategic Resourcing and Operations at PAREXEL. That is something that allows us to speak the same language as our client counterparts. It allows us to quickly gain trust and establish a collaborative partnership. YOUR JOURNEY. OUR MISSION. TM 3

4 TECHNOLOGY TRUMPS TEDIUM As regulations change, so does technology, and technological advancements in regulatory compliance are crucial to gaining a competitive edge. Compliance agencies and health authorities now accept electronic submissions and tracking, which makes the entire process a bit easier. Companies outsource regulatory practices because it keeps costs down and improves processes. These two areas benefit greatly from technological expertise that an outsourcing partner can provide by offering electronic document submissions that capture the cultural nuances and administrative procedures that change at every country s border. It is a rare biopharmaceutical company that would spend potentially millions to build a program or acquire a pre-existing system and train its employees to use it. PAREXEL s Regulatory Information Management (RIM) platform facilitates end-to-end submissions, centralizing the entire process. Launched in 1994, our technology can be applied to individual processes or to all of them. From defining product authorization targets to creating and gathering regulatory submission plans to managing product registration and more, the convenience, timeliness and benefit of a technological edge should not be underestimated. Outsourcing to a partner that can provide this legup can be pivotal. EXPERTISE + EXPERIENCE = SUCCESS As of January 2013, 68% of biopharmaceutical companies were outsourcing regulatory affairs budgets, 2 representing strong growth over the past decade as regulatory burdens increased. Regulatory outsourcing promotes efficiency, can leverage technology, and allows a company to focus on mission-critical needs. Each company ultimately determines what to outsource for a variety of reasons: It may have more launched products than teams can effectively handle in a timely fashion; it may need additional infrastructure support for drug development; it may want a partner to conduct clinical trials; and it may just want an expert to handle its international regulatory operations. All of these options, together or alone, are scalable and flexible. With an outsourcing partner, additional expertise can be brought in as needed. YOUR JOURNEY. OUR MISSION. TM 4

5 Outsourcing costs are important but not necessarily the driving factor in decision-making. Most of our clients are concerned with headcount and the ability to manage and have flexible resources, states Thompson. Shemanski agrees. It s the scalability and best practices that make outsourcing a viable option to in-house staff. A regulatory outsourcing partner must have the right metrics and key performance indicators in place to gauge the success of the partnership. This also allows for benchmarking of best practices. Focusing on core competencies and outsourcing regulatory activities is a win-win for biopharmaceutical companies. Finding the partner with regulatory experience, international savvy and technological expertise may give a company a much-needed advantage in today s demanding marketplace. Timeliness and quality are fundamental in regulatory compliance and key to a solid partnership in outsourcing. At the end of the day, stresses Connelly, if we re meeting timeliness and quality metrics and the products are in a state of compliance, then we can confidently say we are supporting the commercial success of our client. 2 Percentage of Pharmaceutical Companies Outsourcing Regulatory Affairs Budgets Increases to 68%, BusinessWire [online], Jan 2013, Budgets#.VIH8g3ZFDIV Our regional leads are always available for a conversation. THE AMERICAS Jim Park Visit our website to learn how partnering with PAREXEL will help you achieve your ambitions. EUROPE & ASIA PACIFIC Heather Alford +44 (1) YOUR JOURNEY. OUR MISSION. TM 5

6 WHEREVER YOUR JOURNEY TAKES YOU, WE RE CLOSE BY. CORPORATE HEADQUARTERS 195 West Street Waltham, MA USA Offices across Europe, Asia and the Americas PAREXEL International Corporation. All rights reserved.