What does a Florida judge receiving the highest judicial honor given by the U.S. Supreme Court have to do with a Japanese pharmaceutical company? The correlation is there; you just need to understand the backstory, which is why we spoke with a top executive from that pharma company — William H. Carson, M.D., president and CEO of Otsuka Pharmaceutical Development & Commercialization, Inc. (OPDC).
Otsuka Pharmaceutical Co., Ltd. (Otsuka), the parent company of OPDC, made headlines this summer when it entered into a joint venture with IBM to create Otsuka Digital Health Co., Ltd. a stand-alone business (based in Japan) that develops and markets specialized software for analyzing psychiatric patient data. But, as Carson explains, a U.S.-based ODH, Inc. already had been founded in 2015 after three years of piloting the software solution. “ODH was the brainchild of Taro Iwamoto [who served as president of Otsuka from 2008 until his untimely passing in 2015],” Carson says. “Prior to the pilot, he was invited to IBM, where he was shown what would eventually become the question-answering computer system known as Watson. He then toured the New York City Police Department and saw how they were using IBM data analytics solutions to help make the city safer. After that, everything changed organizationally for us. The question became, ‘How are we going to add data analytics into everything we do?’”
A WHOLE NEW MINDSET
Carson, who as the board chair for U.S.-based ODH, Inc., has responsibility for Otsuka’s U.S. digital health initiatives, admits that one of the biggest challenges in building the original digital health system was answering the question that many employees were asking: “How does this relate to our pharmaceutical business?” Carson explains, “We had to consistently remind employees that the mission of Otsuka isn’t to be a pill company, but to create new products for better health worldwide. We had to build a new mindset that the digital health system we were developing had little or no relationship to our existing business.”
When they were initially thinking about how to build the digital health system, Carson remembers having a conversation with Iwamoto that crystallized the paradigm shift of such an endeavor. “I was sharing with him a problem I was currently facing, and he said, ‘I was just talking to Chairman Akihiko Otsuka, and we were discussing what the company might look like 300 years from now.’” Carson found this forward-looking notion to be somewhat analogous to the process of creating a new digital health system — figuring out how to turn Otsuka into something else without having 100 percent clarity on what that something else was, or even where it might fit into the overall business.
During another discussion early in the planning stages of developing the digital health system, the two men found themselves debating whether or not people needed titles. Iwamoto said that he didn’t want an organization with titles because he was more interested in what a person knows, and if they were the right one for the task at hand. Carson says this became part of the model for building ODH. “Once we identified a person within Otsuka who was a good fit for a new job, we would go in and pluck them from what they were working on and give them a new opportunity,” he states. “It is difficult to provide a road map for our approach because the process would require a company to first adopt this kind of diversity-of-thought culture.”
To build a new digital health system, though, they needed external expertise — beyond that of IBM — for developing the new solution. That meant forging relationships with companies, groups, and individuals that had strong competencies in psychiatric treatment.
Enter Florida Judge Steven Leifman, who essentially was the gatekeeper to Florida’s largest psychiatric facility — the Miami-Dade County Jail (see sidebar). “After establishing relationships with folks like Judge Leifman and with groups like the South Florida Behavioral Health Network, we better understood where we wanted to land and what it was we wanted a digital health system to do,” Carson says. The first digital health system became operational in about 18 months.
THE POTENTIAL IMPACT OF A NON-PILL INITIATIVE
Today, ODH, Inc. is a business that is further developing the digital health system, with a five-member board and a leadership team. Headed up by Michael Jarjour, president and CEO, the company has grown to include 40 full-time employees and contractors and is focused on transforming the management of behavioral health by leveraging advanced technology and clinical expertise. ODH, Inc.’s first product, Mentrics, aggregates healthcare data from multiple sources and uses advanced analytics to assign a behavioral and physical health risk score for each member, thereby providing immediate actionable insights that alert care coordinators to treatment gaps or inconsistencies.
“One of ODH, Inc.’s first clients was the South Florida Behavioral Health Network, an organization for which Judge Leifman serves as board chair,” Carson affirms. “That was where Otsuka first developed its digital health system.”
Described as an ongoing community-based project, the pilot marked the first application of an Otsuka/ IBM-developed solution. The technology platform, called Mentrics, combines IBM software and various data management tools with Otsuka’s mental health expertise for risk stratification and predictive modeling, and is geared toward improving:
Since the initial pilot, the company has targeted additional opportunities. For example, this past June, ODH, Inc. joined forces with The White House Data-Driven- Justice (DDJ) initiative — a national effort to reduce the number of mentally ill persons in jail. A 67-member coalition of city, county, and state governments, the DDJ initiative represents a significant commitment to more broadly utilize the ODH, Inc.-Mentrics platform in an effort to keep low-level offenders with mental illnesses out of the criminal justice system.
What kind of impact could an initiative like ODH have? Consider this: It is estimated that more than 11 million American adults have debilitating mental illnesses, for which the U.S. spends about $150 billion annually for treatment. Unfortunately, that cost is just the tip of the SMI (serious mental illness) iceberg. Because the mentally ill are at a higher risk of poverty, they have greater need for other public safety-net services (e.g., food stamps, subsidized housing), which adds another $160 billion to the U.S. tax payer’s annual bill. When you factor in other societal costs, such as annual lost earnings of this population (i.e., $200 billion), you suddenly realize how Otsuka’s non-pill initiative has the potential to significantly improve upon a half-trillion-dollar problem.
A Judge And A Pharma Company Team Up
When Steven Leifman was appointed judge (1995) to the Eleventh Judicial Circuit, he became gatekeeper to Florida’s largest de facto psychiatric facility — the Miami-Dade County Jail. But rather than continue business as usual, Judge Leifman decided to take a different approach toward how society (at least within his county) deals with people suffering from serious mental illness (SMI). In 2000, Leifman created the Eleventh Judicial Circuit Criminal Mental Health Project, a program that directs the mentally ill who committed low-level offenses away from incarceration and toward community-based care. For his efforts (which included the implementation of an advanced-care mental health technology developed collaboratively by Otsuka Pharmaceutical and IBM), in 2015, Judge Leifman became the recipient of the William H. Rehnquist Award for Judicial Excellence — one of the United States’ highest judicial honors presented by the Chief Justice of the U.S.
But more impressive than his individual recognition are the Criminal Mental Health Project’s results. As of July 2016, the recidivism rate for people who successfully complete the program after being charged with a felony was around 6 percent. Compare this statistic to national recidivism numbers that state that, within three years of being released from prison, nearly 68 percent of prisoners are rearrested. But perhaps the most telling statistic is that of those rearrested prisoners, more than 56 percent were arrested by the end of the first year. Leifman’s prescription for helping the mentally ill is similar to one of his collaborative partners, Otsuka Pharmaceutical. According to William H. Carson, M.D., president and CEO of Otsuka Pharmaceutical Development & Commercialization, Inc. (OPDC), the mission of the company to improve human health expands beyond the making of pills.
Are Digital Medicines The Future Of Pharma?
In September 2015, Otsuka became the first pharma company to submit a digital medicine new drug application (NDA) to the FDA. A drug/device product, the digital medicine combined Otsuka’s ABILIFY (aripiprazole) with a Proteus ingestible sensor. Taken as a single tablet, the product can digitally record ingestions and, with patient consent, share information (e.g., physiological responses) with healthcare professionals and caregivers. One of the problems often encountered with patients suffering from mental illness is adherence. Even in developed countries, about half of all chronic disease patients do not take their medications as prescribed. In the United States, poor compliance results in an estimated $100 to $300 billion avoidable healthcare expense. It is theorized that digital medicines (such as that developed by Otsuka and Proteus) might be able to improve medication adherence, help physicians make better-informed decisions, and tailor treatments to best meet patient needs. In April 2016, Otsuka and Proteus announced that the FDA had issued a complete response letter (CRL) requesting additional information. And while Otsuka might not have received the response for which it had been hoping, being the first company ever to submit a digital medicine for FDA consideration is (in and of itself) a milestone.
Editor’s Note: I would have been surprised if Otsuka had received approval from the FDA on its very first attempt. After all, Otsuka’s digital medicine submission provided the regulatory body its first opportunity (ever) to review a digital medicine for regulatory approval. Since the FDA had never seen a digital medicine previously, it seems reasonable to expect a conservative approach when it comes to a first-time regulatory review.
Otsuka Says No More RFPs For CROs
The fact that Otsuka Pharmaceutical’s U.S. development group completely outsources its clinical development model doesn’t make it unique. However, William H. Carson, M.D., president and CEO of Otsuka Pharmaceutical Development & Commercialization, Inc. (OPDC), believes the company’s CRO (Contract Research Organization) selection process does differ from those of many other pharma companies.
“When we began refining how we wanted to partner with CROs, we first looked to get input from consultants that had experience working outside of the biopharmaceutical space, such as the aviation industry,” Carson says. Why? Consider a 737, Boeing’s smallest and most popular commercial jet. To build just one of these $50 million aircraft requires a complex web involving hundreds of suppliers. Now imagine if every time Boeing was interested in building a new 737, it required its suppliers to rebid for the work. While such a process might reduce costs, would it improve efficiency? “We were interested in adapting the aviation industry’s outsourcing model for how we wanted to work with CROs as trusted partners,” he shares. “This is why we selected Customized Improvement Strategies [CIS] as the consultancy to help us.” In addition to a wealth of biopharmaceutical industry experience, CIS had team members who had worked with companies such as Boeing, Bell Helicopter, Lockheed Martin, and McDonnell Douglas. One of the first things CIS helped with was to get away from the typical RFP (Request for Proposal). “Doing RFPs for every project can be very time-consuming,” Carson confirms. “We wanted to partner in a way that allowed us to be very nimble and agile so that we could get started much more quickly when projects came along.”
To achieve that speed, Otsuka developed a CRO selection questionnaire. Because this wasn’t the standard approach CROs were used to (i.e., come in and pitch what they’re going to do), some didn’t know how to respond. For example, one of the biggest CROs actually didn’t answer the questions, so Otsuka didn’t include them in the review process. According to Carson, people at the CRO were shocked not to have been included. “We were very specific in asking them to answer the questions, which we would then score,” he states. “Based on the scores you either moved on to the next level or you didn’t. Apparently they didn’t believe this was the process and had planned on giving us the standard pitch.”
Carson confesses that the CRO questionnaire process was very time-consuming initially. However, the Otsuka team felt that in the long run it would be much more efficient than the typical RFP process. “It was very satisfying to get to a place where we have special relationships with our CRO partners,” he contends. The initial process began with 11 CRO candidates, which were eventually narrowed down to one. “Our first partner was Covance, which we worked closely with for years,” he shares. “Over time, we expanded our business and needed to add other CRO partners, which today include Quintiles and INC.”
The CRO selection process, which began at Otsuka in the United States, has since been globalized for the entire company. “The Japanese word we use to describe part of our culture is Jissho-Shugi, which basically means proof through execution,” Carson concludes. “If you say what you are going to do, do it, and then you will be given more responsibility. It’s a really strong principle as far as the Otsuka organization is concerned, and we expect similar accountability with our strategic partners.”
THE NUTS AND BOLTS OF OTSUKA’S CRO QUESTIONNAIRE
The CRO questionnaire developed by Otsuka Pharmaceutical Development & Commercialization, Inc. consists of 18 pages. Obviously, given this length and the fact that it includes proprietary information, we aren’t able to publish the document in its entirety. However, we would like to give you a feel for what is included should you, too, be interested in moving away from the revolving-door-CRO RFP process.
The Otsuka CRO questionnaire has the following eight sections with weights in parentheses for scoring and selection purposes:
Section 1: Contact Information
Section 2: Organizational Capabilities (10%)
Section 3: Leadership, Governance & Management (20%)
Section 4: Customer Focus & Strategic Planning (15%)
Section 5: Measurement, Analysis & IT (10%)
Section 6: Workforce Focus (15%)
Section 7: Process & Supplier Management (15%)
Section 8: Results (15%)
Below is a sampling of the types of questions included in the questionnaire.
Otsuka notes that the CRO questionnaire was distributed several years ago in paper format. In addition, the company says the questions were structured and scored in a variety of ways. Should your company be interested in taking a similar outsourced partner selection approach, Carson advises the following. “Be thorough in clearly stating what your purpose or reasons are for wanting to develop such relationships, think through what the qualities of a real partner would be in all facets of the operation (staffing, budgeting, planning, reporting, etc.), and involve all your internal stakeholders in designing questions that address each one of those facets.”