Client Perspective

Vivian McCain August 30th, 2016, Chicago

3rd Serialization Roundtable for CMOs
 About Vivian McCain

Teva Pharmaceuticals
Vice President, Third Party Operations, Americas
Program Owner, CMO Serialization Program

Former roles:
Novartis Pharmaceuticals
Head, External Supply Operations, N.A.

Novartis Pharmaceuticals
Production Operations Head

Education

Rutgers University
B.A., Zoology, Physiology & Chemistry

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 Agenda

Introduction: Teva & Serialization

About Teva: Teva in Numbers (Before and After Actavis Integration)
Serialization at Teva: Internal & External/CMO & Former Actavis CMOs
What is the issue of CMO Serialization Compliance in 2016?
CMO Serialization: Regulations, Scope, Complexity and Challenges
Message to CMOs: Plan, Action & Results!
Message to Clients: Managing diversity & variety of CMOs!
Managing new CMOs (or Mergers & Integration): Tevas Approach for Actavis
What to do about it?
Speed: How to expedite a CMO Serialization Programs
Efficiency: How to organize & standardize the CMO Onboarding approach
Key Learnings from Teva CMO Serialization Program
Learnings & advice for new starters

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 About Teva
With Actavis

No.1

120 billion 58,000 80 1 in 5

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 After Actavis Generics Integration

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 Serialization at Teva

Internal / Site Network External / CMO Network

External / CMO Network + Actavis CMOs

20+ Sites 700+ CMOs 800+ CMOs

Global Program since 4+ years Global Program since 2015

Fully budgeted & staffed Ramping up resources

IT
Supply PMO SRM
Technical IT Connectivity
Chain

CMO External
Legal Procurement QA QA tools/apps SMEs

support

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 Serialization at Teva: CMO Serialization Program
Results of CMO Serialization Readiness Survey (Q32016) US Market
Country Total # Completed
Served CMOs Survey CMO Serialization Readiness Stage

United 41 24
States (US serving
CMOs)

US 11/2017

Note: The readiness score is the weighted

average of CMOs who completed their survey.

<Ability to track, risk-assess & prioritize CMO Serialization Support

Activities continuously, using SCWs CMO Serialization Mgt. Dashboard>

Source: SCW Serialization Management Dashboard

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 Serialization at Teva: CMO Serialization Program
What is Teva doing to manage CMO Serialization Compliance Program?
1 2 3 4
CMO CMO
CMO CMO Risk
Serialization Communication
Management Profiles & +
Support Portal
Dashboard Action Plans
Program

CMO program governance Single source of CMO specific risk CMO specific issue
Strategy defined & reporting profiles management
updated Cleaned-up CMO master CMO specific action CMO specific actions
Prioritization set & list plans CMO specific
updated Risk status updated CMO information sharing
Resources assigned periodically workshops/webinars Information
CMO communications & Both external & internal Information exchange collection
monitoring established data inputs Onsite meetings Progress update per
Well-defined stage-gate Scenario management Supplier progress Supplier by SKU
process for CMO reporting
compliance
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 Serialization at Teva: CMO Serialization Program
How is Teva monitoring CMO Serialization Compliance Readiness? ILLUSTRATIVE EXAMPLE

CMO Serialization Journey: CMO XYZ (US Market View) Today

0 8/30 9
US
1 2 3 4 5 6 7 8

Initial Strategic Vendor Pilot Roll-out Roll-out Roll-out Roll-out Roll-out

discussions Planning Selection Project ramp-up 0-25% 25-50% 50-75% 75-100%

Gate 1 Gate 2 Gate 3 Gate 4 Gate 5

Teva Onboarding Milestones: Milestones Notes:

q Gate 1: Initial baseline aligned Alignment meetings conducted

q Gate 2: Teva reqs agreed to Reqs to shared
q Gate 3: Pilot check by workstream In Progress
q Gate 4: Validate IT interface Scheduled for Q1 2017
q Gate 5: CMO Compliance Go-Live Scheduled for Q2 2017

Key message: This CMO has specific requirements from Teva that requires leadership guidance

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 What is the issue?
Increased since 2015
Increased since 2015
Decreased since 2015

Regulations

Scope
CMO Serialization
Compliance
What are the key issues?
Complexity

Challenges

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 What is the issue?

Increasing REGULATORY Requirements

40+ countries (88% of world GDP) have final or draft legislation

Large &
Increasing
Global Scope

1 Legislations range from coding Serialization is no longer a trend, it is a reality!

to full serialization & aggregation
Source: SCW Regulations DB: Based on SCW analysis & interpretation from multiple sources including:
World Bank, GS1, US-FDA, Brazil-ANVISA, CFDA, EU-FMD, India-DGFT, Turkey-ITS

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 What is the issue?
Increasing SCOPE
Serialization scope covers the entire network
Typical split of
Supply/Demand demand / supply
in Large Pharma
Network

CMO Inter-Co
Customer Network
Network Network
~20-40% of supply ~60-80% of supply ~100% of demand

Strategies Consolidate CMOs Consolidate sites Route smaller

to minimize Product transfers Consolidate lines customers to
scope Plan B: 3PL solutions Consolidate DCs wholesalers
Rationalize products
Packaging transfers

where CMO Network could be a significant part of our business

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 What is the issue?
Increasing COMPLEXITY
Serialization projects with CMOs are quite complex

Relationship Status Functional Ownership

CMO Who does artwork design?
CPO Who leads IT connectivity?
ANDA holder vs. AG Serial number management?
In-licensing Partner Exception management?

IT Connectivity Internal Organization & Governance

Various systems X-functional resources involved
No system Regional vs Local Management
System interfaces Relationship management
Validation Other on-going initiatives

where every CMO requires clarifications & support from MAH

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 What is the issue?
Increasing CHALLENGES
CMO Serialization Project has a lot of challenges

Financial Technical Operational

One-time Packaging / Label Quality Systems &

investment standards Processes

Unit-cost IT Connectivity Exception

Management
Expertise &
Resource Master Data
Availability Management

Communication
between Functions

and challenges only increase as you get close to deadlines

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 Message to CMOs

A goal without a plan is just a wish

..and a plan without action only looks good on paper!

So ready for taking actions?

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 Message to Large Pharma
You have all types, shapes, sizes of CMOs

Are you understanding, adapting & managing to their needs?

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 How to Expedite Serialization Process

Tevas Approach for Actavis CMOs (New CMOs joining the network)

5 Gate Process - First 3 Gates Combined for Actavis CMOs to expedite onboarding
Communication Increased Among Internal Functions and External Suppliers
Risk Assessment Continuously being done and monitored
Actions and Milestones Prioritized per Supplier based on risk
Suppliers Managed closely by Supplier Relationship Managers (SRMs)
Process Continuously being simplified
Support Help is being given if/where needed

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 What to do about CMO Serialization?
Continue to recognize there are two sides of the equation:

Ensure CMO compliance Achieve compliance

Objectives Minimize value at risk Fulfill Client requirements

CMO network baseline IT, SC, Commercial Baseline

Baseline / Risk CMO compliance risk Regulatory / Client gaps
Assessment

Strategy / CMO Support Strategy Serialization Strategy

Resources / CMO Taskforce Team Implementation Team
Vendor Selection Consulting partner HW / SW / Consulting

Cost of CMO Support Cost of compliance

Budget & Unit cost increase Unit-cost negotiations
Financial Plan Capex investments Capex negotiations

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 How we monitor progress & execute efficiently?
Maintain internal CMO data
TEVA

1 2
Monitor & Control
Data Collection via Supplier Readiness Survey Readiness Summary
Serialization Contacts Functional Team Checklists
Program Status Survey Results
Number of Sites/Lines Level of Risk
Program Resources Plan
IT and System Vendors 1 2
Teva & CMO Contacts
Program Budget Clustering
Program Challenges
Reports
Scenario Mgt
DB Execute
CMOs CMO Support
Document Mgt
3 CMO Action Mgt

TEVA
3

Communicate
Serialization Readiness & Gate Status
Serialization Support
Site/Line/Product level progress Tools provided &
CMOs Requirements & Documents TEVA managed by
IT Connectivity Methods
Actions and Issues

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 How we organize the team structure?
A cross-functional, cross country team will be assigned to each Supplier to manage and
monitor serialization progress.

Team Lead*

Country specific
Representative(s) Procurement
SUPPLIER TEAM RESPONSIBILITIES

Supply Chain Ensure timely Supplier readiness

Quality
Wizard Ensure that Teva functional
requirements are met

Provide regular progress reports & Artworks &

IT resolve Issues
Packaging
Engage supplier and manage
communications
Regulatory
Supply Chain
Affairs

Permanent
Finance

As required * Team Lead (SRM or other)

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 How we standardize activities & project management?

Standard Activity Lists / Check-lists per Supplier and/or Workstream Leads:

Example

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 Learnings & advice from Teva experience

There is still wide variety of readiness level and maturity among CMOs, and
having a formal CMO Serialization Program enables proactive support

Starting with the Strategic Planning Phase of CMO Program helps assess
the value at risk, and makes the business case for the full program

CMO support program should prioritize the review and verification of

readiness information through a regular monitoring & reporting process

Suppliers which has unknown status may pose even a higher risk than
known suppliers; regular communication with CMOs is a success factor

Formal CMO onboarding process & guidelines helps with standardization

and scalability to enable smaller teams to reach & support large # of CMOs

If you do not have internal resources or expertise, get external support, but
remember the service providers are also increasingly limited in capacity
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 Thank You

Questions, Comments, Actions?

?
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