Genentech is emerging from an environment in which all clinical trials outside the US involved a development partner with
an established international infrastructure. The company is moving to a blended model in which it will conduct some clinical
trials without relying on partners to develop and market drugs. In addition, because most biologics are currently developed
in US markets, US patient enrollment has become competitive. The new blended model and the challenge of American patient enrollment
are driving the company to increase patient enrollment abroad to support its expanding product pipeline and improve speed-to-market.
Hence, Genentech needed a strategy for an international clinical distribution network that would support patient enrollment
outside the US.
Genentech's objective was to create an international clinical distribution network that would allow all clinical activities
for molecules to be undertaken globally. A cross-functional project team was assembled at the company to devise short-term
and long-term strategies for creating such a network.
Globalization of the Clinical Trial Distribution Network
Until recently, Genentech did not have its own infrastructure or development capability outside the US; it relied on partners
with established international distribution infrastructure to conduct clinical trials outside the US. This dependence allowed
the company to focus on its core competency of research and development. This strategy was appropriate at the time, and it
leveraged larger development partners' knowledge of when, how, and what Genentech drugs would go through clinical trials outside
the US for ex-US filings. Today, Genentech operates independently of partners executing many clinical trials. The result
is the need for an accelerated, cost-efficient, flexible strategy. The most direct way to deliver the pipeline drugs faster
is to accelerate patient recruitment through an international clinical trial distribution infrastructure.
There are additional benefits to having an international distribution infrastructure. The emerging regions of New Europe,
Latin America, and Asia provide a pool of new patient populations, the majority of which are eager to benefit from state-of-the-art
medicines. This new patient pool decreases the burden on site and patient recruitment in the US, which is under significant
competitive pressure. These factors contribute to reduced time-to-completion of clinical trials, decreased staffing costs,
and lower costs per patient.
The Challenges
Genentech and other biotechnology companies share common challenges in creating an international clinical distribution network
to support their pipelines of products. These challenges include:
- the lack of expertise and experience in conducting development activities outside the US
- a US-focused and conservative legal environment surrounding employment and vendor sourcing
- development partners (often large pharmaceutical companies) with opt-in rights that complicate planning for recruitment outside
the US
- the lack of an existing sales and commercial-distribution infrastructure outside the US from which to springboard clinical
trial execution strategies.
These challenges were key considerations in designing Genentech's international clinical network strategy.
Business Models
Genentech evaluated the following distribution business models:
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Build: The company invests in building a full or partial global clinical trial platform that includes facilities, employees, data
infrastructure, and regulatory knowledge.
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Outsource: The company seeks a full or partial relationship directly with supply-chain partners (such as clinical distribution organizations,
Big Pharma depots, third-party logistics providers, and clinical research organizations). These partners can provide services
ranging from trial management, clinical data management, logistics, testing, and packaging, to regulatory expertise.
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Co-develop: The company seeks new partners and then develops their clinical distribution capabilities. Under this model, the company
might leverage a partner with strong logistics expertise and help it branch into a clinical supply-chain business.
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Acquire: The company seeks to acquire clinical distribution infrastructure and services. This model could include purchases of several
smaller regional distribution networks.
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Direct ship: The company seeks to ship material to the actual clinical trial site from the point of manufacture.
Genentech evaluated strategies that combined these business models applied across various regions and time horizons (less
than two years, and three-to-seven years).
