1 Delivering Superior Service to Clinical Sites and PatientsGreg Hottell Director, Supply Chain Group Lead GSK – Target to Patient Supply Chain March 2017

2 Delivering Superior ServiceSession Agenda Introduction & review agenda Section One: Overview of the CenterWatch Survey Section Two: The GSK Improvement Journey Section Three: What we learned along the way Open Forum; Q&A Greg Hottell – March 2017

3 Section One – Overview of the CenterWatch SurveyMeasuring sponsor performance at the clinical site “If winning isn’t everything, why do they keep score?” Vince Lombardi Hall of Fame Football Coach 1913 – 1970 Source: Greg Hottell – March 2017

4 Introduction to the CenterWatch SurveyProviding context for those unfamiliar with the survey A global survey of clinical sites & investigators Conducted every 2 years ~2,000 responses Looking at key sponsor <-> site relationship factors Ranking of sponsors based on their relative performance Comparisons to prior survey results to detect trends and opportunity areas Source: CenterWatch Global Investigative Site Survey; General Sponsor Analysis, April 2015. Greg Hottell – March 2017

5 Looking at 2013 Results (Baseline)GSK was not recognized as top tier based on performance GSK was not ranked as a top-tier sponsor in 2013 Opportunity: Not on the leader board for performance Consolation: Considered one of the top-5 sponsors by reputation: Source: The CenterWatch Monthly March 2013; Volume 20, Issue 03 “…the 2013 survey, for the first time, measured the reputations of sponsors among sites. The top five companies, based on reputation alone, were Novartis, Roche, Sanofi, GlaxoSmithKline, and Pfizer.” Greg Hottell – March 2017 Source: The CenterWatch Monthly March 2013; Volume 20, Issue 03

6 Source: The CenterWatch Monthly March 2015; Volume 22, Issue 03How the GSK Clinical Supply Chain Scored in 2015 Significant improvement in results from the 2013 baseline GSK was recognized by CenterWatch Monthly as a top-performing sponsor Source: The CenterWatch Monthly March 2015; Volume 22, Issue 03 Including top-tier performance in “Timely Drug Availability” for clinical sites Greg Hottell – March 2017 Source: CenterWatch Global Investigative Site Survey; General Sponsor Analysis, April 2015.

7 The culmination of persistent focus on a few key improvement areas…How Did We Do It? Explaining the change in performance from 2013 to 2015 The change in results from 2013 to was a tremendous success for our team The culmination of persistent focus on a few key improvement areas… Greg Hottell – March 2017

8 Section Two – The GSK Improvement JourneyTaking action to improve service for sites and patients “What patients want is not rocket science, which is really unfortunate because if it were rocket science, we would be doing it. We are great at rocket science. We love rocket science. What we’re not good at are the things that are so simple and basic that we overlook them.” Laura Gilpin Nurse, Author, and Poet 1950 – 2007 Source: https://www.amazon.com/Putting-Patients-First-Practicing-Patient-Centered/dp/ Greg Hottell – March 2017

9 The GSK Improvement Journey4 key action areas to improve performance for sites and patients 1 Getting back to the basics Consistent execution of the fundamentals Implementation of an end-to-end planning platform Overage and waste reduction emphasis Proactive risk management Clear accountability for on-time patient delivery Defining and enhancing the interface with Clinical Relationships across functions Cross-functional steering committee 2 3 4 Greg Hottell – March 2017

10 1. Clinical Supplies – Getting Back to the BasicsRefocusing on our primary reason for existence We had to get on the same page as to who our customers are and our reason for existence: “To design and execute clinical supply chains that deliver on-time to patients while supporting the potential of the R&D pipeline.” It is our responsibility to create effective plans that are able to survive in the real world… Greg Hottell – March 2017

11 At minimal cost / least waste1 1. Clinical Supplies – Getting Back to the Basics (cont.) The reality of clinical supplies management In our business, pressure comes from uncertainty and the need to serve 2 masters: On-time, Every time PRESSURE! At minimal cost / least waste DEMAND SUPPLY Cost pressures continue to mount for many Pharma companies dealing with declining revenues due to patent losses for blockbuster medicines. Greg Hottell – March 2017

12 1. Clinical Supplies – Getting Back to the Basics (cont.)Building a framework for a consistent tool kit One global organization (vs. regional model) Clear mission and sense of purpose Core skills reinforced: Defining and documenting key assumptions Demand modeling & demand planning Aligning on deliverables and due dates Supply planning & inventory management Risk Planning & Risk logs vs. ‘Brute Force’ Approach: Greg Hottell – March 2017

13 2. Implementing an End-to-End Planning PlatformPlanning extends from API to Patient Consumption On a monthly basis, translate patient enrollment (demand) information into a plan for supply activities needed to support GSK studies… Patient Enrollment projections Patient Kit consumption rates Packaging Activity Manufacturing Activity Linking patient demands all the way back to manufacturing provides end-to-end visibility for how a change in clinical demand translates into revised requirements for operations or how a change in supply availability might impact delivery for patients. Planning occurs at multiple levels: Patient Kit Demand Secondary Packaging Primary Packaging Drug Product API Greg Hottell – March 2017

14 2. Implementing an End-to-End Planning Platform (cont.)Linking the Clinical supply chain from API to Patient Kit Involved closing gaps and building interfaces across disparate systems SIMPLIFIED ILLUSTRATION: Patient Dispensing & Site Inventory Distribution and Logistics Packaging and Labeling Drug Product Manufacture Drug Substance Manufacture IRT DRP MRP + Inventory Management Supply Chain Strategy & Supply Planning (API to Patient Kit) Clinical Development Plan IP Demand Modeling & Demand Planning PLANNING EXECUTION This fundamentally changed the nature of the Study Lead role New-found visibility allowed us to challenge decisions and intervene… Greg Hottell – March 2017

15 2. E2E Planning Enabled Significant ImprovementsLeveraging E2E planning to drive value through the supply chain Demonstrating the value of Supply Chain Management: Shifting focus from “Overage” planning to “Forward Cover” Challenging spend events & delaying expenses to be as close as possible to the need / trigger Tangible results: £10M to £20M in savings and cost avoidance realized annually Reversed expansion trend in pilot plant capacity Improved supply responsiveness Greg Hottell – March 2017

16 3. Clear Accountability for On-Time Patient DeliveryOn-time delivery to the patient as the overarching goal Before, it was too easy to pass the issue along to someone else (“they should have done something differently…”) We were not doing a good enough job of getting to true root cause Corrective actions were not driving significant improvement fast enough Stock Out Cause… Solution: Establish a single, visible owner for on-time delivery Leverage E2E planning platform for visibility and ‘single voice’ Drive cross functional alignment to an improvement plan and actions Especially important at key interfaces where gaps tend to form Greg Hottell – March 2017

17 4. Defining and Enhancing the Interfaces with ClinicalImproving the interfaces between supply and demand Cross-functional initiative to identify and improve the barriers to higher performance Focused on key milestones and defining a RACI for deliverables and handoffs to other teams Highlighted (and addressed) a lack of understanding of upstream and downstream activities Greg Hottell – March 2017

18 Focus on Patient DeliveryWhat Did We Learn? As with any journey, learning was a critical component Back to Basics The improvement from 2013 to was the culmination of significant effort over the course of several years We weren’t always perfect, but we learned a lot along the way… E2E Planning Platform Focus on Patient Delivery Enhanced Interfaces Greg Hottell – March 2017

19 Section Three – What We Learned Along the WayKey lessons learned from a multi-year journey “I suppose it is tempting, if the only tool you have is a hammer, to treat everything as if it were a nail.” Abraham Maslow American Psychologist 1908 – 1970 Source: https://en.wikipedia.org/wiki/Abraham_Maslow Greg Hottell – March 2017

20 What We Learned Along the WayKey lessons from the journey to improved performance Training, Culture and Relationships as a foundation E2E visibility and control over the supply chain is crucial Overages and Waste are often a ‘red herring’ Ultimately, Supply Chain Agility is key Greg Hottell – March 2017

21 1. Training, Culture and Relationships as a FoundationThe softer side of change is the most important first step GUIDING PRINCIPLE: “If your people don’t know what they are doing, nothing else really matters.” Upgrading and changing business tools and processes without considering the necessary skill sets was an early misstep Any improvement initiative MUST consider the human side of change GUIDING PRINCIPLE: “If people can’t agree in times of ease, they will be at each other’s throats in times of pressure.” If the root causes of conflict are not addressed, improvement initiatives will simply delay the inevitable. Focus on creating positive reinforcement cycles Greg Hottell – March 2017

22 2. End-to-End Visibility and ControlE2E planning framework is a key enabler to higher performance GUIDING PRINCIPLE: “If you can’t see it, you can’t manage it.” Disconnected systems and lack of visibility = delays & supply risk This creates the “Jump Scare” of clinical supplies (the problem you don’t see coming till it is too late…) Supply Chain Strategy + Demand & Supply Planning MRP + Inventory Management DRP IRT Drug Substance Manufacture Drug Product Manufacture Packaging and Labeling Distribution and Logistics Patient Dispensing & Site Inventory The solution does NOT have to be a full-blown ERP platform (although it can certainly help…) Greg Hottell – March 2017

23 3. “Overages” and Waste are Often a Red HerringIt can be easy to get distracted by alternate goals… When it comes to our primary objective, Waste and Overages are often red herrings… They are outcomes of the process, as opposed to the primary deliverable. GUIDING PRINCIPLE: “If you can’t explain simply what the inventory is for, you don’t really have an inventory plan.” Greg Hottell – March 2017

24 “CTM supply needs to be highly flexible, yet immediately responsive”3. Overages as a Potential Red Herring Utilizing inventory to help us achieve our primary objective “CTM supply needs to be highly flexible, yet immediately responsive” Flexibility allows us to reallocate stock… From one dose form to another From one study to another From one language pool to another From one clinical site to another While minimizing waste Responsiveness to meet patient needs… The right dosage forms For the right study In the right quantities At the right places At the right time Greg Hottell – March 2017

25 4. Ultimately, Supply Chain Agility is KeyUsing an agile approach to replace the need for high overages GUIDING PRINCIPLE: “If a key part of the plan is predictably unpredictable, formally prepare your supply chain to adapt.” The necessary tradeoff between flexibility and responsiveness means that inventory alone only gets us so far in achieving our primary objective The supply chain needs to be designed and operated to ensure it is ‘agile’: “…supply chain agility can be defined as a firm’s ability, in conjunction with its key suppliers and customers, to quickly and effectively react to changes in environment.” Source: Blome, Constantine, et al. “Antecedents and Enablers of Supply Chain Agility and its Effect on Performance: A Dynamic Capabilities Perspective.” International Journal of Production Research. Vol. 51, No. 4., 15 Feb 2013. Greg Hottell – March 2017 Agility does not have to be about cutting edge or highly advanced production capabilities – in many cases, it is about getting the fundamentals right

26 4. Ultimately, Supply Chain Agility is Key (cont.)An illustration of what I mean by agility… We know that variability is a huge factor in our business, leading to supply risk: In a basic supply chain, supply risk is a function of variability during the replenishment lead time. Agility helps to address the risk and assure supply: Source of Agility: Inventory at node Cycle Time Upstream reserve DEMAND Source of Risk: Demand variability Supply variability Lack of visibility ‘Supplier’ ‘Customer’ SUPPLY How we have chosen to approach agility: Maintain some internal packaging, labeling & distribution capability Leverage externalized capabilities where appropriate Strategic inventory placement (relative to capability) along the supply chain Strong emphasis on E2E visibility & rapid identification of hot spots Greg Hottell – March 2017

27 Bringing it All TogetherThe Journey to Improved Delivery for Sites and Patients Greg’s Roadmap for Improved Performance: Following through relentlessly on the plan AND its myriad contingencies Optimal placement of inventory relative to capabilities to ensure rapid response Collaborative planning for what might happen with disciplined planning for contingencies Establishing the “control tower” with an appropriate infrastructure Healthy & engaged teams working collaboratively across functions Mandatory fundamentals Greg Hottell – March 2017

28 About the Presenter: Greg Hottell is a Director in the Clinical Interface team at GSK, where he is responsible for the cost-effective, patient-focused supply of investigational product for GSK’s pharmaceutical development portfolio. Since joining GSK in 2011, Greg implemented an end-to-end planning platform for clinical supplies, helped redesign GSK’s approach to clinical supply blinding and unblinding risk management, was a core team member for the Investigational Material Supply strategic planning initiative, all while consistently delivering top-tier performance with on-time supply of investigational product to patients. Greg has been a Supply Chain professional since 1999, most recently holding positions of increasing responsibility at Eli Lilly & Company and Fisher Clinical Services prior to joining GSK. Greg has a diverse background in the Pharmaceutical Industry spanning roles that include clinical trial materials management, demand planning, site inventory management, IRT utilization, drug product supply planning, temperature excursion management, study drug expiry dating extensions, customer service, operations planning & scheduling, and procurement. Greg holds a bachelor’s degree in Operations Management, an MBA, and is a Certified Fellow in Production and Inventory Management (CFPIM) through APICS.