1. Corporate Affairs Excellence:Optimizing Group Structure & Operations

2.

Table of Contents

Project Blueprint pg. 3

Executive Summary: Benchmark Insights & Research Participants pg. 5

Commercial Structures: Trends That Drive Business Unit Structures & Evolution of Corporate Affairs pg. 11

Novartis Case Study: Articulating Business Units to Express Growth &Entrepreneurial Spirit pg. 17

TOC Continued

Corporate Affairs Group Structures: Key Trends & Drivers of Sub-group Evolution pg. 28

Corporate Affairs Group Models & Structures pg. 32

Corporate Affairs Group Services: Key Trends In Service Levels & Priorities pg. 45

Contact Information pg. 50

Table of Contents 3. Optimizing Structure Involves Integrated Practices & Approaches

No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organized in such a way as to be able to get along under a leadership composed of average human beings.

-Peter Drucker

There are no perfect structures. Form follows function. New market pressures and lifecycle events compel structures to evolve. Optimizing structure reflects the integrated management of units, people, process, technology, communications, incentives and other management factors. Corporate Affairs: Accelerated Evolution To Make the New Structure Work 1. Realign toSupport New Corporate Goals, Strategies 2.Fine-tune CorporateAffairs Sub-group Structures3. Establish Service Levels to Reflect Priorities & Resources 7. Drive Long-Term Priorities & Respondto Ad Hoc Issues4. Integrate Operations toBridge BUs,Geographies &Sub-Groups 5. UseFunding / Budgeting Process to Reaffirm Alignments 8. Manage /Coordinate Roles for a Fully Integrated Pharmaceutical Network 10. Assess Performance, Refine & Continuously Improve 6. Refine Talent Management Strategies & Systems to Fit New Structure 9. Optimize Learning to Enhance Performance 4.

Abbott Laboratories

Amgen

Astellas Pharma, Inc.

Astra Zeneca

Boehringer Ingelheim

ConvaTec

DRI

Eisai, Inc

Eli Lilly and Company

Emirates

Genentech

Genomic Health

Genzyme

GlaxoSmithKline

Intas Pharma

MDS Nordion

Medtronic

Merck Sharp Dohme Turkey

MetLife

MSD

National Grid

Novo Nordisk

Pfizer

Purdue Pharma LP

Roche Diagnostics Diabetes Care

Solvay

Stiefel, a GSK Company

UCB

W. R. Grace & Co.

Copyright Best Practices, LLC Corporate Affairs Benchmark Research Participants Participants in this benchmarking research included 28 corporate affairs executives and managers at 27 leading bio-pharmaceutical, healthcare and non-healthcare companies. Interview participants areunderlined . 5. Participants Job Titles Typically Director or Above Research participants included Vice Presidents, Executive Directors, Medical Executives, Directors and Managers. More than 69% of benchmark partners are directors and VPs and 31% are managers. All work directly or indirectly in Corporate Affairs functions. Executive Director Vice President Executive Director Vice President European Director Sr. Manager Director, Communications Sr. Director Director of Advocacy Senior Director Director Project Manager Director Medical Executive Director Manager, Director Manager Director Manager Director Manager Director Manager Copy and Production Officer Manager Associate Director Government Affairs Manager Assistant Director JOB TITLE JOB TITLE 6. Functional Perspectives Circumscribe Corporate Affairs Benchmark partners reflect functional experience that interacts directly or indirectly with the Corporate Affairs function. Since Corporate Affairs resides in different places across companies and sectors, diverse functions from Government Affairs, Corporate Affairs, Communications, Medical Affairs and Advocacy participated in this study. Government Strategy and Relations State Government Affairs Government Affairs Stakeholder Management Global Employee Communication and Brand Sales and Marketing Communication Global Advocacy Development Public Policy and Advocacy General Medicine Professional Relations, Public Affairs and Advocacy Customer Marketing Patient Services and Professional Relations CRM and Customer Experience Patient Advocacy Relations Corporate Communications Patient Advocacy Corporate Communications Multi Channel Communications / Marketing Corporate Communications Medical AffairsCorporate Affairs Medical Affairs Communications, Brand, Interactive, Creative Medical Affairs Communications and Government Affairs Marketing Communications Communications Healthcare Alliance Development Advocacy Relations / Corporate Communications GROUP OR FUNCTION GROUP OR FUNCTION 7. Hybrid Structure Most Common of Approaches The multi-industry study group reflected diverse approaches to corporate commercial structure. About one-third described their commercial operating structures as hybrids. This reflects various characteristics designed to help them deal with growth, scale, products and geographic complexity. About 47% of respondents said they evolved using some form of decentralization.Q4. Commercial Structure: Note the approach best describing your company's commercial operations structure (n=28) Commercial Operating Structure 20% 17% 10% 30% 23% Hybrid Centralized Decentralized by Product Families / Divisions Decentralized by Geography Decentralized by Therapeutic Area Percentage with Each Operating Structure 47% reflect some form of decentralization 8. Corporate Affairs Group Structure Mid-Cap Pharma -Hybrid Approach - A Here, Corporate Affairs reports to the General Counsel with centralization at headquarters and staff decentralization to product families with different regional headquarters.Business units organized by therapeutic areas, product families, geography, product lifecycle and customer segment.Corporate Affairs supports three blockbusters and 10 smaller products. 9. About Best Practices, LLC Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics and winning strategies of world-class companies Best Practices, LLC 6350 Quadrangle Drive, Suite 200,Chapel Hill, NC 27517 www.best-in-class.com Telephone: 919-403-0251