1. The New Reality:
Strategic Partnerships
Under Scrutiny
Are They Working and How Long
Does It Take?
Tuesday, June 26, 2012

2. Panel Members
Forum Chair
• Patricia Leuchten, President and CEO, The Avoca Group
Panel Members
• Chris Davis, RPh, Director, External Sourcing, Eli Lilly and Company
• Peter A. DiBiaso, MHA, Senior Director, Head, Clinical Business
Operations, Vertex
• Paul D. Spreen, Senior Vice President and Global Head, Customer
Solutions Management Group, Quintiles

3. The New Reality:
Strategic Partnerships Under Scrutiny
Three Main Discussion Topics for This Session
1. Characterization of strategic partnerships and levels of
satisfaction
2. Objectives and whether expectations are being met
3. Implementation strategies and tools for managing
relationships

4. The New Reality:
Strategic Partnerships Under Scrutiny
2012 Avoca Industry Survey
on Strategic Alliances:
Background

5. Respondents
Characteristics of Respondents
Sponsor Respondents
• 147 respondents from 89 companies
• 72% from pharmaceutical companies, 23% biotechnology, 3% device,
2% other
• 50% from “Top 20” companies with respect to revenue
Clinical Service Provider Respondents
• 97 respondents from 84 companies
• 50% from CROs, 50% from other (specialty) providers

6. Part 1: Characterizing the Strategic Alliances
between Sponsors and CROs and
Levels of Satisfaction

7. Sponsor Data
Does your current company have, or has If “Yes”, how many strategic
it had, any "strategic partnerships" with partnerships does your company
clinical service providers? currently have?
(one response per company) (one response per company)
4% 3%2%
21%
1
Yes 16%
2-3
47%
No 4-6
49%
>6
Don't Know
58% Don't know
N=92 N=43

8. Clinical Service Provider Data
Does your current company have, or has With how many strategic partnerships
it had, any "strategic partnerships" with have you personally had direct
sponsor companies? experience, either at your current
One response per company company or in a previous position
with a clinical service provider?
6%
17% None
Yes 24%
1
27%
No 16% 2-3
12%
67% 4-6
Don't Know
>6
31%
N=82 N=93

9. Sponsor Data
To your knowledge, has your company ever discontinued a strategic partnership?
(one response per company)
12%
22%
Yes
Most common
reason for
discontinuation:
No
Poor quality,
followed by
overall poor
Don't know
performance
66%
N=91

10. Each respondent was asked to report on an “index” strategic
partnership with which he/she had the most direct experience.
“Strategic partnership” was defined as follows:
A long-term contractual commitment between two
organizations that seeks to achieve specific business
objectives by maximizing the effectiveness of each
participant’s resources. Strategic partnerships are generally
characterized by process alignment, and by risk-sharing or
other provisions serving to align business objectives.

11. Sponsor Data
How mature is the strategic partnership (or, if you are no longer involved with the
relationship in question, how mature was it when your involvement ended)? "Inception"
refers to the time at which project work under the relationship began.
16%
<1 year since
27% inception
1-3 years since
inception
>3 years since
inception
57%
N=111

12. Satisfaction Levels:
Sponsor and CRO Results

13. Sponsor Data
Overall, how satisfied are you with the work that has been done for you by the
strategic partner?
4% 3% 9%
Very satisfied
21% Generally satisfied
Neither satisfied
nor dissatisfied
Generally
dissatisfied
63% Very dissatisfied
N=108

14. Sponsor Data
Overall, how satisfied are you with the work that has been done for you by…
N
the strategic partner? 9% 63% 21% 3%
4% 108
Clinical Service Providers? (all respondents) 1% 72% 20% 7% 139
Clinical Service Providers? (respondents with
4% 64% 32% 22
no strategic partner experience)
0% 20% 40% 60% 80% 100%
Very satisfied Generally satisfied
Neither satisfied nor dissatisfied Generally dissatisfied
Very dissatisfied

15. Sponsor Data
Overall, how satisfied are you with the work that has been done for you by the
strategic partner?
N
How mature is the strategic
partnership?
<1 year since inception 6% 61% 28% 6% 18
1-3 years since inception 10% 57% 28% 2%
3% 61
>3 years since inception 10% 76% 3% 7%
3% 29
0% 20% 40% 60% 80% 100%
Very satisfied Generally satisfied
Neither satisfied nor dissatisfied Generally dissatisfied
Very dissatisfied

16. Sponsor Data
In general, how satisfied are you with the value that you have received for the
money spent with this strategic partner?
N
How mature is the strategic
partnership?
<1 year since inception 6% 41% 41% 12% 17
1-3 years since inception 9% 45% 31% 16% 58
>3 years since inception 8% 54% 23% 12% 4% 26
0% 20% 40% 60% 80% 100%
Very satisfied Generally satisfied
Neither satisfied nor dissatisfied Generally dissatisfied
Very dissatisfied

17. Comparison between Clinical Service
Providers and Sponsors
Overall, how satisfied are you with the work that your company has done during the strategic
partnership/that has been done for your company by the strategic partner?
N
Suppliers 36% 54% 9% 1% 67
Sponsors 9% 63% 21% 4% 3% 108
0% 20% 40% 60% 80% 100%
Very satisfied Generally satisfied
Neither satisfied nor dissatisfied Generally dissatisfied
Very dissatisfied

18. Clinical Service Provider Data
In general, how satisfied are you with the profit that has been generated for your
company by the strategic partnership?
N
How mature is the strategic
partnership?
<1 year since inception 10% 50% 20% 20% 10
1-3 years since inception 15% 52% 30% 4% 27
>3 years since inception 19% 52% 30% 27
0% 20% 40% 60% 80% 100%
Very satisfied Generally satisfied
Neither satisfied nor dissatisfied Generally dissatisfied
Very dissatisfied

19. Clinical Service Provider Data
Overall, how satisfied have you been with the quality of the work that has been
delivered to the sponsor during the strategic partnership?
N
How mature is the strategic
partnership?
<1 year since inception 36% 27% 36% 11
1-3 years since inception 25% 64% 11% 28
>3 years since inception 46% 46% 7% 28
0% 20% 40% 60% 80% 100%
Very satisfied Generally satisfied
Neither satisfied nor dissatisfied Generally dissatisfied
Very dissatisfied

20. Part 2: Objectives of Entering into Strategic
Alliances and Evaluation of Whether
Objectives Were Met

21. Sponsor Data
What were your company's main objectives in launching
the strategic partnership?
(one respondent per company, current company relationships only)
Top five responses:
1. Reduced costs (53%)
2. Improved quality (43%)
3. Improved efficiency in use of internal staff (43%)
4. Access to operational expertise (43%)
5. Process improvement (30%)

22. Sponsor Data
For each of the following, to what extent has the strategic partnership met
your expectations? (slide 1 of 2)
N
Senior management involvement 11% 58% 24% 7% 100
Availability of high quality personnel for my
6% 61% 28% 6% 104
projects
Expansion of global capabilities 8% 58% 29% 5% 93
Addition of regional expertise 7% 58% 31% 3% 89
Availability of sufficient resources for my
9% 56% 30% 5% 102
projects
Governance/relationship management 9% 56% 29% 6% 99
Addition of operational expertise 8% 52% 32% 8% 101
0% 20% 40% 60% 80% 100%
Exceeded expectations Generally met expectations
Sometimes met expectations Failed to meet expectations

23. Sponsor Data
For each of the following, to what extent has the strategic partnership met
your expectations? (slide 2 of 2)
N
Reduced contracting effort 13% 41% 30% 15% 99
Addition of regulatory/strategic expertise 6% 48% 36% 9% 85
Addition of therapeutic expertise 3% 48% 41% 8% 93
Improved quality of deliverables 4% 47% 43% 7% 101
Cost savings 6% 41% 36% 16% 94
Sparing of internal resources 7% 39% 33% 21% 100
Operational innovation/process improvement 4% 40% 40% 17% 96
0% 20% 40% 60% 80% 100%
Exceeded expectations Generally met expectations
Sometimes met expectations Failed to meet expectations

24. Sponsor Data
How long did it take for sponsors’ main objectives to be achieved?
For those respondents whose relationships spanned a period of >3 years:
• Reduced costs: A little more than half of the respondents achieved cost savings in one
year or less; however, almost a quarter of the respondents reported never achieving cost
savings.
• Improved quality: 54% of respondents indicated improved quality within one year;
however, 21% reported never achieving improved quality.
• Improved efficiency: Less than half of the respondents felt that efficiency and the
reduction in effort for oversight was achieved within one year; 28% said it was never
achieved.
• Operational expertise: 75% of respondents reported receiving the expected operational
expertise within one year and only 8% said that this was never achieved.
• Process improvement: Only 36% saw process improvement within 1 year; however
40% reported that their expectations with respect to process improvement were met
between 1 and 2 years. Almost one quarter of this group said that their expectations in
this area were never met.

25. Sponsor Data
For each of the areas listed below, please indicate how long it took before the partnership
"generally" met your expectations. (slide 1 of 2)
Partnerships >3 years since inception only N
Availability of sufficient resources for my
60% 28% 8% 4% 25
projects
Availability of high quality personnel for my
52% 24% 16% 4%
4% 25
projects
Senior management involvement 40% 40% 4% 16% 25
Addition of regional expertise 40% 32% 12% 4% 12% 25
Addition of operational expertise 33% 42% 17% 8% 24
Addition of therapeutic expertise 32% 28% 8% 32% 25
Reduced contracting effort 28% 48% 12% 12% 25
0% 20% 40% 60% 80% 100%
within 6 months of inception within 1 year of inception within 2 years of inception
>2 years after inception Never/not yet

26. Sponsor Data
For each of the areas listed below, please indicate how long it took before the partnership
"generally" met your expectations. (slide 2 of 2)
Partnerships >3 years since inception only N
Governance/relationship management 28% 40% 16% 4% 12% 25
Cost savings 24% 28% 16% 8% 24% 25
Expansion of global capabilities 21% 38% 8% 17% 17% 24
Operational innovation/process improvement 16% 20% 40% 24% 25
Addition of regulatory/strategic expertise 8% 24% 8% 8% 52% 25
Improved quality of deliverables 4% 50% 13% 13% 21% 24
Reduction in effort required for oversight 4% 40% 20% 8% 28% 25
0% 20% 40% 60% 80% 100%
within 6 months of inception within 1 year of inception within 2 years of inception
>2 years after inception Never/not yet

27. Sponsor Data
Please indicate how long it took before the partnership "generally" met your expectations:
Does/did the
partnership Cost Savings
involve
Partnerships of duration >3 years only N
risk-sharing
contractual
provisions?
Yes 20% 30% 30% 10% 10% 10
No 33% 17% 8% 42% 12
0% 20% 40% 60% 80% 100%
within 6 months of inception within 1 year of inception within 2 years of inception
>2 years after inception Never/not yet

28. Sponsor Data
Please indicate how long it took before the partnership "generally" met your expectations:
Does/did the
partnership Improved quality of deliverables
involve
Partnerships of duration >3 years only N
risk-sharing
contractual
provisions?
Yes 10% 80% 10% 10
No 17% 25% 17% 42% 12
0% 20% 40% 60% 80% 100%
within 6 months of inception within 1 year of inception within 2 years of inception
>2 years after inception Never/not yet

29. Sponsor Data
Please indicate how long it took before the partnership "generally" met your expectations:
Does/did the
partnership Reduction in effort required for oversight
involve
Partnerships of duration >3 years only N
risk-sharing
contractual
provisions?
Yes 60% 30% 10% 10
No 8% 17% 17% 17% 42% 12
0% 20% 40% 60% 80% 100%
within 6 months of inception within 1 year of inception within 2 years of inception
>2 years after inception Never/not yet

30. Clinical Service Provider Data
What were your company's main objectives (e.g. Top 3) in launching
the strategic partnership?
(one respondent per company, current company relationships only)
Top five responses:
1. Increased business stability/continuity (80%)
2. Improved efficiency in the use of staff (39%)
3. Increased profit (36%)
4. Access to more interesting projects (36%)
5. Meet needs/desires of current customers (34%)

31. Clinical Service Provider Data
Please describe the extent to which the strategic partnership has met your
expectations with respect to each of the following, to date. (slide 1 of 2)
N
Meet needs/desires of current customer 25% 66% 8%2% 64
Increased business stability/continuity 17% 69% 12% 2% 65
Acquire new customer 12% 65% 18% 6% 51
Improved quality 23% 50% 25% 2% 60
Improved efficiency in use of staff 19% 54% 22% 5% 63
Access to more interesting projects 11% 54% 25% 11% 57
0% 20% 40% 60% 80% 100%
Exceeded expectations Generally met expectations
Sometimes met expectations Failed to meet expectations

32. Clinical Service Provider Data
Please describe the extent to which the strategic partnership has met your
expectations with respect to each of the following, to date. (slide 2 of 2)
N
Increased profitability 8% 55% 28% 9% 64
Process improvement 18% 44% 28% 10% 61
Reduced contracting effort 12% 50% 22% 17% 60
Improved staff retention 16% 45% 27% 12% 51
Reduced business development effort 5% 51% 30% 14% 57
Access to incentives for high performance 2% 42% 42% 14% 43
0% 20% 40% 60% 80% 100%
Exceeded expectations Generally met expectations
Sometimes met expectations Failed to meet expectations

33. Clinical Service Provider Data
How long did it take for Providers’ main objectives to be achieved?
For those respondents whose relationships spanned a period of >3 years:
• Increased business stability/continuity: 60% achieved this in one year or less; 32%
said that it took between one and two years.
• Improved efficiency in the use of staff: 52% of respondents indicated improved
efficiency within one year; 32% said that it took between one and two years.
• Increased profit: 52% of respondents reported increased profitability within one year;
28% said it took between 1 and 2 years; 16% reported that it took longer than two years;
and a small percentage indicated that this was never achieved.
• Access to more interesting projects: a little over half of the respondents reported
access to more interesting projects within one year and 16% said that this was never
achieved.
• Meet needs and desires of current customers: the majority of respondents (80%)
indicated that customers’ needs and desires were met within one year.

34. Clinical Service Provider Data
For each of the areas listed below, please indicate how long it took before the partnership
"generally" met your expectations.
Partnerships >3 years since inception N
Meet needs/desires of current customer 32% 48% 8% 12% 25
Increased business stability/continuity 28% 32% 32% 4%
4% 25
Access to more interesting projects 20% 36% 12% 16% 16% 25
Reduced contracting effort 17% 50% 8% 8% 17% 24
Process improvement 17% 29% 38% 13% 4% 24
Increased profitability 16% 36% 28% 16% 4% 25
Improved quality 13% 46% 25% 8% 8% 24
Improved staff retention 12% 48% 20% 20% 25
Improved efficiency in use of staff 12% 40% 32% 12% 4% 25
Reduced business development effort 8% 38% 13% 17% 25% 24
Access to incentives for high performance 4% 21% 13% 8% 54% 24
0% 20% 40% 60% 80% 100%
within 6 months of inception within 1 year of inception within 2 years of inception
>2 years after inception Never/not yet

35. Comparison between Clinical Service
Providers and Sponsors
Sponsor Data Clinical Service Provider Data
In your experience, how long does it take for In your experience, how long does it take for
most sponsor project teams to adapt their most clinical service provider project teams
styles to working under a strategic to adapt their styles to working under a
partnership? strategic partnership?
2% 5% 8% 2%3%
<1 year <1 year
12% 26%
1-2 years 1-2 years
38% 2-4 years 2-4 years
47%
>4 years >4 years
Don't know 57% Don't know
N=99 N=58

36. Clinical Service Provider Data
Do you feel that ultimately, this strategic partnership will achieve all of its
intended objectives?
N
Suppliers 79% 10% 11% 61
Sponsors 55% 24% 21% 103
0% 20% 40% 60% 80% 100%
Yes No Don't know

37. Clinical Service Provider Data
If “Yes” (this strategic partnership will achieve all of its intended objectives),
how long do you think it will take (or did it take)?
N
Suppliers 40% 50% 10% 48
Sponsors 25% 62% 9% 4% 56
0% 20% 40% 60% 80% 100%
<2 years 2-4 years >4 years Don't know

38. Part 3: Implementation Strategies and Tools
for Managing the Partnerships

39. Sponsor Data
Please indicate whether your company used each of the following tools for or
approaches to implementing its strategic partnership, and if so, the degree to
which it was helpful in ensuring successful implementation.
Top responses:
1. Roles and responsibilities checklist (95%)
2. Joint operating committee (89%)
3. Joint steering committee (83%)
4. Formal communication plan regarding new model (80%)
5. Written project charter (75%)

40. Sponsor Data
Please indicate the degree to which each was helpful in ensuring successful
implementation.
N
Joint operating committee 53% 29% 16% 1% 85
Joint steering committee 48% 33% 15% 4% 79
Roles and responsibilities checklist 44% 36% 18% 2% 87
Joint quality committee 39% 41% 15% 4% 46
Formal communication plan regarding new model 34% 37% 21% 7% 70
Training programs for the new model 33% 41% 24% 2% 66
Other operational joint committees 33% 33% 30% 4% 46
Written "manual" for project operations under the 28% 47% 18% 7% 60
Written project charter 26% 39% 25% 10% 69
Feedback surveys for staff 18% 42% 31% 9% 55
0% 20% 40% 60% 80% 100%
Very helpful Somewhat helpful Slightly helpful Not helpful

41. Clinical Service Provider Data
Please indicate whether your company used each of the following tools for or
approaches to implementing its strategic partnership, and if so, the degree to
which it was helpful in ensuring successful implementation.
Top responses:
1. Roles and responsibilities checklist (90%)
2. Joint steering committee (81%)
3. Joint operating committee (79%)
4. Training programs for the new model (78%)
5. Formal communication plan regarding the new model (75%)

42. Clinical Service Provider Data
Please indicate the degree to which it was helpful in ensuring successful
implementation.
N
Joint operating committee 50% 41% 7%2% 44
Roles and responsibilities checklist 49% 39% 8% 4% 49
Formal communication plan regarding new model 44% 32% 17% 7% 41
Joint steering committee 40% 36% 20% 4% 45
Training programs for the new model 39% 39% 20% 2% 41
Written project charter 33% 42% 14% 11% 36
Written "manual" for project operations under the 28% 56% 13% 3% 32
Joint quality committee 24% 44% 26% 6% 34
Other operational joint committees 19% 62% 8% 12% 26
Feedback surveys for staff 18% 35% 29% 18% 34
0% 20% 40% 60% 80% 100%
Very helpful Somewhat helpful Slightly helpful Not helpful

43. Comparison of Responses
Please indicate the degree to which it was helpful in ensuring successful
implementation.
Suppliers Sponsors
% Somewhat-Very helpful
Joint operating committee 91% 82%
Roles and responsibilities checklist 88% 80%
Written "manual" for project operations under the new model 84% 75%
Other operational joint committees 81% 66%
Training programs for the new model 78% 74%
Formal communication plan regarding new model 76% 71%
Joint steering committee 76% 81%
Written project charter 75% 65%
Joint quality committee 68% 80%
Feedback surveys for staff 53% 60%

44. Sponsor Data
What went well during the implementation phase?
• Most frequently cited theme: ongoing and open communication
between teams including face-to-face time and clear communication
pathways
• Sense of collaboration and trust
• Governance structure and CRO Partnership Manual
– “The set-up of a CRO Partnership Manual in close cooperation with the
CRO partners.”
– “The formal and contractually agreed governance model was put in place
and became effective.”

45. Sponsor Data
What went well during the implementation phase? continued
• Definition of Roles and Responsibilities
– “Recruitment of new roles on both sides were in place and the key
processes were developed and implemented.”
• Senior management support
– “Getting senior management to support initiative and whenever
possible had presentations by internal Outsourcing Sr. Management
to present strategy and company wide meetings.”
• Training programs
– “Hired an outside group to help develop communication and training
programs for the internal organization as well as the CRO.”

46. Clinical Service Provider Data
What went well during the implementation phase?
• The two most frequently cited themes:
– Smoothness of transition including collaboration of sponsor and
provider partner teams and transfer of operational
responsibilities
– Establishment of clear expectations including definition of strategy
and strategic alignment.
• Open communication is the third most common theme
cited. This includes the mention of a face-to-face meeting
with the entire project team from both sides of the
relationship.

47. Sponsor Data
What you would have done differently during the
implementation phase?
• The most frequently cited verbatim themes cited need for
enhanced training.
• Improved clarity relating to Roles and Responsibilities
– “Would have provided clear definition of role and responsibilities in
both companies, my own and strategic partner.”

48. Sponsor Data
What you would have done differently during the
implementation phase? continued
• Upfront and continued involvement by Senior Management (Sponsor
and CRO)
– “Would have required more upfront involvement of leadership for
show of support and reinforcing importance of this process/partner
change.”
• Establishment and management of common expectations
– “Would have implemented greater management of expectations and
development of sponsor skill set prior or at the same time as the
model change.”

49. Clinical Service Provider Data
What you would have done differently during the
implementation phase?
• The most frequently cited verbatim themes offered suggestions
surrounding robustness of communication.
• Establishment of common expectations and improvement in
advance planning also received multiple mentions.
– “Would have implemented Roles and Responsibilities sooner along with
SOPs.”
– “Would have more fully reviewed expectations, down to details. Or created
a plan for reviewing and redefining these on a more regular basis.”

50. Thank you!
Contact Avoca at:
(609) 252-9020
Patty.Leuchten@theavocagroup.com
www.theavocagroup.com
info@theavocagroup.com
179 Nassau Street
Suite 3A
Princeton, NJ 08542