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September 14, 1998

Research Gains From IT Boom

Top drug makers depend on technology for more than just speeding production

By Justin Hibbard

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PHARMACEUTICALS & MEDICAL EQUIPMENT

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With data from Hoovers Online

Ask people in the pharmaceuticals business for the key to success, and they're bound to talk about speeding up "the pipeline." That's industry jargon for the series of steps that carries a drug through development, approval, manufacturing, and finally to market.

Just a few decades ago, the pipeline was made up of manual and paper-based processes. Today, it's PCs, servers, and global networks that shuttle data from research labs to clinical trials to manufacturing plants to salespeople. IT's future mandate: Help extend the pipeline to its furthest reaches.

At companies such as Eli Lilly and Co., the $8.5 billion maker of top-selling antidepressant Prozac, IT plays a critical role in nearly every part of the business. But it's not just about using workflow software to speed regulatory approval, or about deploying global systems for enterprise resource planning, customer service, and sales-force automation. It's also about creating a revolution in drug discovery.

"One of the most important things for us is the whole notion of helping discovery researchers cope with more data- and more complex data-than they've ever had before," says Thomas Trainer, Eli Lilly's VP and CIO. The alliance between the Indianapolis company's IT staff and researchers is so important that last year the two groups set up shop down the hall from each other. "Lilly Research Laboratories and IT are literally hand-in-hand," says Tom Bumol, executive director of research technology and proteins.

Eli Lilly is focusing on the emerging field of bioinformatics, which uses specialized algorithms and databases to analyze the structure of genes. The analysis helps identify proteins that cause disease.

When a target protein is found, researchers must screen out all the chemical compounds that don't affect it. The screening used to be performed by hundreds of white-coated chemists who stirred flasks and scribbled in notebooks. Today, robotic arms are doing the stirring, as well as producing gigabytes of data. At Sphinx Pharmaceuticals, a division of Eli Lilly, robots screen 75,000 molecules a day-the same amount most drug companies used to screen in a year.

"Bioinformatics is accelerating the pharmaceuticals industry beyond what technology does for businesses in general," says Tracy Lefteroff, partner in charge of the global life sciences practice at PricewaterhouseCoopers. At Eli Lilly, the IS staff and researchers are correlating data in several databases into a single relational database structure. Lilly subscribes to

a database of gene- sequencing information from Incyte Pharmaceuticals Inc., co-owns a database generated by Millennium BioTherapeutics Inc., and generates its own gene sequencing information internally. In addition, the company downloads information nightly from public databases on the Internet, such as the federal government's Human Genome Project. All the data is stored in Oracle databases that run on Sun Microsystems servers.

A Mixture Of Tools
Eli Lilly's researchers access the databases from their desktop PCs across an intranet, using a mixture of commercial, public-domain, and custom-built Web tools to analyze data. Incyte and Millennium provide tools that let researchers compare a particular gene sequence with other genetic information in their databases. In addition, Eli Lilly's developers have built tools that search for gene sequences and proteins that are specific to their needs. "A lot of exciting new discoveries are in some cases made just by database mining to find new molecules," Bumol says.

But finding new molecules doesn't automatically lead to more profits. The more pharmaceutical companies discover, the more work they must do to approve and ship products. Shortening time-to-market is a critical IT function because patents on new drugs last only 20 years. After that, makers of generic drugs can sell knockoffs for 50% to 90% less than name brands-often eroding 80% of a branded drug's market share within a year of a patent's expiration.

Top-selling drugs such as Prozac can bring in as much as $1 billion in sales each year. Any extra time those drugs spend on the market before patents expire results in significant revenue. "If you can build a system that will get one drug to market one week faster, you save the company $20 million," says David Elderkin, VP of technology at Integrated Systems Consulting Group Inc., a systems integrator for the pharmaceuticals industry.

At American Home Products Corp., the $14 billion maker of pain reliever Advil, the main initiative to speed time-to-market is standardizing worldwide operations on one global IT infrastructure. "We are rolling out more and more true global applications," says CIO Bruce Fadem. "To do that effectively, you need optimal networking capability."

This year, AHP, in Madison, N.J., will complete the deployment of a frame relay network in North America and Europe. Next year, it will extend the network to Latin America and Asia. A worldwide network will help the company roll out a global system for running simultaneous clinical trials in multiple countries. The system will use Oracle Clinical for clinical data management, Fraser Williams' Impact for clinical trials management, and a custom-built application for adverse-events tracking. The system is part of an AHP initiative to manage clinical trials globally and make them more efficient.

One Place For Access
In addition, AHP's global network will help the company streamline its manufacturing processes. The company is rolling out a system using Novation, a Java-based document-management package from NovaSoft Systems Inc., that will give locations throughout the world access to a central repository for technical documents used in manufacturing. "We're implementing a single system that will control testing, packaging, and other components in our manufacturing plants worldwide," Fadem says.

Document-management systems from vendors such as NovaSoft and Documentum remain critical tools for managing regulated processes in the drug business. "Pharmaceuticals is one of the few industries where return on investment from document management is realized," says Jeetu Patel, VP of research and chief technology officer at Doculabs Inc., a research and consulting firm. Even greater is the return on Web-based document-management systems, Patel adds. "When you have the Web come into the picture, the amount of time to develop applications goes down."

Amgen Inc., the $2 billion marketer of the anemia drug Epogen, is making as many documents as possible available through its intranet. "We have a very active intranet at Amgen," says Kim Pollock, director of corporate IS for the Thousand Oaks, Calif., company. "People are used to going to the intranet to find information, so this fits in nicely with our culture and platforms."

Amgen is consolidating its manufacturing documents in a system based on Livelink Intranet, a Web-based document-management package from Open Text Corp. Employees use the system to manage documents that track manufacturing quality. "Livelink works well in a regulated environment because it complies with good manufacturing practices," Pollock says. "Everything's stored in an Oracle database, so it makes storage and retrieval standard across the organization."

Opening up manufacturing document repositories is just one way drug companies and their cousins in the medical equipment industry are making more information available to salespeople. In both industries, companies are pulling information from several sources- including manufacturing, order and inventory management, financial systems, and contract management systems-and dumping it into customer databases that salespeople access inside the company or from the field.

"Traditionally, sales-force systems have been pulling information from the sales force back to the corporation," says James Doyle, a VP of life sciences at Computer Sciences Corp. "The intent today is to provide the sales force with performance information by pushing it out to them. You get enough information out to the salespeople so product launches get more expeditious than in the past."

Medical equipment maker Guidant Corp. has built what it calls a "common customer interface," which gives employees access to consistent information about customers. Sales clerks worldwide use the same order-entry process based on SAP R/3. The system lets the clerks see what a customer has ordered and the status of the order in real time, helping them both avoid duplication and advise customers based on their purchase history. "Maintaining a high level of customer satisfaction and responding to our customers' unique needs are top priorities," says David Breeding, CIO at the Indianapolis company.

Information from Guidant's R/3 order-entry system is fed into a data warehouse from Cognos Inc. that houses other sales information, too. The data warehouse has been available to managers at headquarters for about a year, and Guidant is testing custom-built client-server software that makes the data warehouse available on salespeople's notebook computers. Salespeople will have up-to-date information on which products their customers are ordering, the status of orders, their own sales numbers, sales training materials, and reference materials. Guidant will roll out the sales-force system over the next two to three years.

Similar projects are in development at another medical equipment manufacturer, U.S. Surgical Corp. This year, the company deployed Selling Chain Pricer, a pricing engine from Trilogy Development Group Inc. that lets managers set pricing policies in a central system. Employees can access the system to get consistent, up-to-date information on prices. U.S. Surgical began rolling out the system to its sales force this summer so that managers can instantly broadcast up-to-date pricing information to salespeople in the field.

Marketing's Next Challenge
The next step is making pricing information available to customers on U.S. Surgical's Web site. The project is part of a companywide initiative to reach out to customers through the Web. To that end, U.S. Surgical is making its electronic data interchange systems work on the Internet, and plans to build an online catalog that will let hospitals and health-maintenance organizations order supplies over the Web. "We have to take a very sophisticated pricing and contracts-maintenance system and provide access to the customer," says Jeffrey Sciallo, VP of IS and treasurer at U.S. Surgical, in Norwalk, Conn.

But the company's plans for the Web don't stop with health-care providers. By posting more information about its products online, U.S. Surgical plans to forge relationships with its customers' customers as well. "We think there's strong potential for educating the ultimate user of our products, which is the patient," Sciallo says.

And that's extending the pipeline about as far as it goes.

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