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MIT System Design & Management, 1-Jun-2015
Creating a Technology Strategy & Roadmap for Manufacturing
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Forward-Looking Statement This presentation includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These statements are based upon the current beliefs and expectations of Merck’s management and are subject to significant risks and uncertainties. There can be no guarantees with respect to pipeline products that the products will receive the necessary regulatory approvals or that they will prove to be commercially successful. If underlying assumptions prove inaccurate or risks or uncertainties materialize, actual results may differ materially from those set forth in the forward-looking statements. Risks and uncertainties include but are not limited to, general industry conditions and competition; general economic factors, including interest rate and currency exchange rate fluctuations; the impact of pharmaceutical industry regulation and health care legislation in the United States and internationally; global trends toward health care cost containment; technological advances, new products and patents attained by competitors; challenges inherent in new product development, including obtaining regulatory approval; Merck’s ability to accurately predict future market conditions; manufacturing difficulties or delays; financial instability of international economies and sovereign risk; dependence on the effectiveness of Merck’s patents and other protections for innovative products; and the exposure to litigation, including patent litigation, and/or regulatory actions. Merck undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in Merck’s 2014 Annual Report on Form 10-K and the company’s other filings with the Securities and Exchange Commission (SEC) available at the SEC’s Internet site (www.sec.gov).
$6.5 billion; 25 drug candidates in late-stage development; key areas: oncology, CV, diabetes, respiratory & immunology, neurology, infectious disease and vaccines
2014 R&D EXPENSE
$42.2 billion; 61% of sales come from outside the United States
2014 REVENUES
Pharmaceuticals, Vaccines, Biologics and Animal Health
BUSINESSES
Kenilworth, New Jersey, U.S.A. HEADQUARTERS
Operating since 1851 RICH HISTORY
Known as Merck in the United States and Canada, and MSD elsewhere
WHO WE ARE
Approximately 70,000 worldwide (as of 12/31/14)
EMPLOYEES
Key Company Facts
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To discover, develop and provide innovative products and services that save and improve lives around the world.
Our Mission
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Major Therapeutic Areas • Cardiovascular • Diabetes & Obesity • Infectious Disease • Neurosciences • Oncology • Respiratory & Immunology • Vaccine-preventable diseases
PRESCRIPTION PHARMACEUTICALS & VACCINES
• Livestock • Companion Animal • Aquaculture
ANIMAL HEALTH
Business Areas of Focus
Some Definitions...
TECHNOLOGY: In the context of this effort, technology is defined as a system comprised of scientific/technical knowledge, processes and equipment that is used to accomplish a specific goal.
MANUFACTURING TECHNOLOGY: Manufacturing technologies are combinations of knowledge, process and equipment that are directly or indirectly involved in the transformation of raw materials into products and their subsequent delivery in a useful form to our customers and final patients. PRODUCT CONFIGURATIONS: These are actual changes in format to a product that a customer would see or perceive – for example formulation platforms or packaging configurations. For our purposes, they often help to classify various manufacturing technologies. COMMERCIAL INNOVATION: New approaches, or new combination of existing approaches, to create or capture business opportunities. Includes marketing of products and services, production/distribution channels, partnerships, media, technologies, data management, etc. to improve patient access, adherence and outcomes.
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Big Problem
• How do we effect transformations and coordinate actions at a sub-system level so that we have optimized results…
- at physical sizes that span a global enterprise - at time scales that run decades
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What do we need to do – Supply Chain Transformation
Robust incoming materials Lower cost, environmentally sound products
Customer-focused packaging Transport without human & environmental threats
Access, adherence, ease
Raw Materials Manufacturing Distribution and Logistics To Patient
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Transformation requires integrated & aligned action
RANDOM MOB
SYNCHRONIZED MARCH
Citation: Public Domain Images
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Create a systems-level overview for the technology platforms considered
Therapeutic Protein Bulk
Biologically-Derived Small Molecule API
Chemically-Synthesized Small Molecule API
Non-Sterile Devices (If applicable) (e.g. applicators)
Oral Dosage Form (e.g. tablets, capsules, soft chews)
Vaccine Bulk
Non Oral Specialty Formulation
(e.g. ointments, creams, rods, rings)
Sterile Formulation/Filling
Primary Packaging
Secondary Packaging
Distribution & Logistics
Sterile Devices (if applicable) (e.g. pens)
Info Tech
Anlyt Tech
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Define a framework for the external world
Shareholders
Drug Wholesalers /Retailers
Health Authority
Hospitals
Govt Agencies
Managed Health Care Providers
Health Care Provider
Family & Friends
Insurance Provider
Investment Analysts
Regulators
Patient
Payers Providers
Patient
Regulators
Financial Stakeholders
Sales & Marketing
Distribution & Logistics
Planning & Scheduling Procurement
Raw Materials Suppliers
Active Ingredient Sites
Formulation Sites
Packaging Sites
Site Quality
Research & Development
Supply Chain Franchise Mgmt
Neighbors
Public
Society
Warehousing Science & Technology
Global Quality
Global Safety & Environmental
Quality- Regulatory
Manufacturer
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Convert the needs to measurable KPIs MAJOR PARAMETER KEY PERFORMANCE PARAMETER MEASURE DEFINITION STAKEHOLDER WHO CARES
Safety & Tolerability The safety profile of the medicine.Patient, Provider, Payer,
Regulator
EfficacyHow effective is the medicine in effecting the disease target, generally measured by bioavailability over time.
Patient, Provider, Payer, Regulator
Features
Attributes that signify the non-biological elements of the product, like integrity and elegance of the medicine, the ease of use of the packaging etc.
Patient, Provider, Payer, Regulator
Manufacturing Efficiency and Robustness Measures
All the manufacturing parameters that are part of being a world class supplier including inventory stock turns, process capability (CpK), overall equipment effectiveness (OEE), right first time (RFT), on time in full (OTIF), and cycle times.
Manufacturer, Regulator
Standard Cost to Make ProductThe manufacturing cost to create a certain number of units of the product.
Manufacturer
Flexibility to Continuously Improve
The measure of how rigid or flexible the process is to learning and then instituting improvements based on that learning.
Manufacturer
Sustainability and Environmental Factor
The inherent operational safety and the green-ness or environmental friendliness and sustainability of the process.
Manufacturer, Society, Regulator
Global Access
Increased global access for medicines is important and this parameter represents the technologies ability to be operable in various markets around the globe.
Patient, Society, Manufacturer
Scalability and Continuity of Technology from R&D to Manufacturing
This measures the continuity of the technology from bench scale and pilot scale models to manufacturing allowing for knowledge to be built over time and across different products using the same platform.
Manufacturer, Regulator
PRODUCT
A winning product fashioned with the customer value drivers in mind and continues to deliver this value consistently.
PROCESS
Sustainable and profitable business/manufacturing system
to create and deliver the product robustly, wherever they are needed while building and leveraging institutional wisdom
seamlessly.
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Create roadmaps
p p p p Solid Oral Dosage Forms Solid Oral Dosage Forms –– RM to Bulk Product Tech Road MapRM to Bulk Product Tech Road Map(Note: Bulk Product to Customer would be covered on another map(Note: Bulk Product to Customer would be covered on another map as we have structras we have structr
BD Phoenix 2
China – Dragon XBD
BoP ProductInnovation
1H2011 2H2011 1H2012 2H2012 1H20131H2011 2H2011 1H2012 2H2012 1H2013 2H2013 1H2014 2H2014 1H2015 2H2015
Premium/Existing Mkts
Premium/Existing Mkts
Bottom of the Pyramid
Bottom of the Pyramid
Emerging Mkts Middle Class
Emerging Mkts Middle Class
Grand Challenge Pilot
Innovation BoP Product/Service
BoP Product
BG – MK-YYYYAcqR
India 7.2BD
BG – MK-XXXX
MK-XXXX
MK-YYYYClinical
Innovaion BoP Product
API TechnologiesAPI Technologies BalhExp
BlahExp
Blah BlahExp
Low Cost API TechExp
BlahExp BlahExp
BlahExp
BlahExp
Business &Organizational
Models
Business &Organizational
Models
MK-ZZZZClinical
Projects not fundedProducts/Technologies In-Use
Projects Funded/In Progress
Technology in Commercialization
Turkey – Korea - TTTJBD
BGx Operating ModelDevelopment Partner NetworkExternal Development
BlahExp
Formulation TechFormulation Tech
RM TechnologiesRM Technologies
Market Segments
Physical Technologies
Color is Type of Activity Required Exploratory, Vs. Incremental Innovation
Major Tech Category
Products/Franchises of Focus & Their Plans i.e.. Commercial Strategy
Sandwich in Business & Organization Models
Dotted Lines Indicate Connections Between Commercial & Technology Work
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Institutionalize the process
Technology Inventories
(a subset of which are Proven
Technology Toolkits)
Product Family Plans
Customer Needs/ Business
Requirements
Market Dynamics
Science & Technology Landscape
Customer Understanding
Voice of the Technology
Technologists Marketers
Voice of the Customer
Feedback & Collaboration
Technology Roadmaps
Proven Delivered
Customer & Business Value
A B C
Proof of Science Hint of Commercial Potential
Proof of Technology System-level Concept
Proof of Regulatory, Operational & Commercial Use Proof of Robustness
Technology Funnel
Horizon III Horizon II
Horizon I
Informs
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CHEM SYNTH
ORAL DOSAGE
NON-STERILE DEVICE
PRIM PACK SECOND PACK
DIST & LOG
ACTIVE INGREDIEN
T
EXCIPIENTS
COMPRESSED TABLET
BLISTER PACK CARTON
CFD REACTOR DESIGN
DIMENSIONLESS
COMPRESSION
MACHINE
EXTRUSION
SIMULATION
SPRAY COATING DESIGN SPACE
FILTRATION
APPARATUS
OPTIMIZATION
STERILE ROBUSTN
ESS
GRANULATOR
MODEL
STOCHASTIC RC
LOADER
THERMAL STABILITY
OPERATIONAL FLOW
MODEL
MULTI-MODAL
TRANSPORT
DECISION TREE
PVDC FOIL
MOISTURE SEAL
PREDICTION
FLOW CONTROL
S
SYS DYNAMIC
S DASHBOA
RD
ENVIRO FACTOR PREDICTI
ON
VIBRATIONAL
SIMULATOR
CHEM SYNTH
ORAL DOSAGE
NON-STERILE DEVICE
PRIM PACK
SECOND PACK
DIST & LOG
ACTIVE INGREDIENT I I I I I
EXCIPIENTS I I I e
COMPRESSED TABLET e e I
BLISTER PACK I I I e
CARTON e e e e e e
CFD REACTOR DESIGN b b
DIMENSIONLESS COMPRESSION
MACHINEb b b
EXTRUSION SIMULATION b, e s
SPRAY COATING DESIGN SPACE b, e t s
FILTRATION APPARATUS
OPTIMIZATIONt, e t, e sc s
STERILE ROBUSTNESS t s
GRANULATOR MODEL w, e s
STOCHASTIC RC LOADER t, e s t
THERMAL STABILITY sc, e sc, e s e e
OPERATIONAL FLOW MODEL t daMULTI-MODAL TRANSPORT
DECISION TREEda
PVDC FOIL MOISTURE SEAL
PREDICTIONb b w w w w w w w da da b
FLOW CONTROLS t, e s
SYS DYNAMICS DASHBOARD e b s
ENVIRO FACTOR PREDICTION e b s
VIBRATIONAL SIMULATOR b w w w
TECHNOLOGY & PSE INITIATIVES
TECH
NOLO
GY &
PSE
INIT
IATI
VES
PROCESSES
PATHWAY AKOQR
OPERANDS
PROC
ESSE
SOP
ERAN
DS
Manage program-program interactions
THERMAL STABILITY
MULTI-MODAL TRANSPORTATION
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Diabetes example: All projects work in unison to transform supply chain
Reduce API costing Green chemistry Biocatalysis
Near IR enabled, Chemometric Real time release testing
Packaging allows for adherence
Serialization & Trust
Raw Materials Manufacturing Distribution and Logistics To Patient
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Technology Feasibility for Mfg Use
Extent of Products Uses for Market Needs
Install/Implement
Proactive Investment
Creation of Need
Reaction To Need
Sunset of Tech/Prod
Unproven (H3)
Proven (H1)
No Immediate Need Exists for Use
Product(s)/System Need Exists For Use
Technology Management Paths
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• Enterprise level transformation to meet human health and sustainability challenges requires many efforts to work in unison
• This innovation, alignment and prioritization cannot be left to chance: Technology roadmapping provides an effective solution for managing wide-scale technical transformation.
• It enables the connection from activities directed at molecular size and immediate time scales to global size and multi-year time scales
Summary
BD Phoenix 2
China – Dragon XBD
BoP ProductInnovation
1H2011 2H2011 1H2012 2H2012 1H20131H2011 2H2011 1H2012 2H2012 1H2013 2H2013 1H2014 2H2014 1H2015 2H2015
Premium/Existing Mkts
Premium/Existing Mkts
Bottom of the Pyramid
Bottom of the Pyramid
Emerging Mkts Middle Class
Emerging Mkts Middle Class
Grand Challenge Pilot
Innovation BoP Product/Service
BoP Product
BG – MK-YYYYAcqR
India 7.2BD
BG – MK-XXXX
MK-XXXX
MK-YYYYClinical
Innovaion BoP Product
API TechnologiesAPI Technologies BalhExp
BlahExp
Blah BlahExp
Low Cost API TechExp
BlahExp BlahExp
BlahExp
BlahExp
Business &Organizational
Models
Business &Organizational
Models
MK-ZZZZClinical
Projects not fundedProducts/Technologies In-Use
Projects Funded/In Progress
Technology in Commercialization
Turkey – Korea - TTTJBD
BGx Operating ModelDevelopment Partner NetworkExternal Development
BlahExp
Formulation TechFormulation Tech
RM TechnologiesRM Technologies