4 Big Pharma Outsourcing Strategies That Work For Small/Virtual Companies
By Anthony Grenier
When I was with Big Pharma companies, the same attention was paid to selecting and qualifying a new CMO for outsourcing a $1 million product as it was for a $50 million product. The reason behind this was that, in case of an unexpected issue with any of the top-selling products, we wanted to have all our resources available and focused on one objective: no supply disruption. This way, we could constantly apply the Pareto principle and avoid all of our small products representing 20 percent of our sales but taking up 80 percent of our time. We were doing tech transfers and CMO selection right the first time.
After dealing with Big Pharma strategies for many years, I started working with Phase 1/2 small and virtual pharma companies entering the critical stage of outsourcing their Phase 3 clinical trial materials (CTMs). I was astonished by their not-so-rigorous CMO selection process.
Of the small and virtual pharma companies approaching Phase 3, many have only one product in the pipeline or one lead product in clinical and many others in pre-clinical stages, so they have to pick their priorities. The limited resources and money raised by the company are typically put on the lead product, with big hopes it will be the winning horse.
You would think these companies would spend a lot of time and be extra careful in the CMO selection process. Unfortunately, they are not, as I have seen from several past and current client engagements. The complexity of the move to Phase 3 is often underestimated, despite the fact that it is a critical outsourcing stage. The lack of in-house expertise and the fact that the world of outsourcing to CMOs is not part of the companies’ employees’ networks explain the outsourcing pitfalls these companies may be facing. The bench and lab-scale model of Phase 1/2 is a lot different when you reach Phase 3. Not only must you scale up your process, but you also enter into dealing with cGMP supply of much larger quantities. Because of the higher complexity, risks increase, and you encounter issues such as a CMO constantly missing clinical dosing deadlines or experiencing major compliance issues, both of which can ultimately delay the time to file and to reach the market. Of course, not all small pharma companies are in so much trouble, but these are two examples of real-world issues, and they are not the worst-case scenarios you can imagine.
So how do you prevent this and take the right first steps? I suggest following these well-tested strategies used by Big Pharma companies.
1. Have a vendor selection/qualification standard operation procedure (SOP).
I am not a big fan of overloading the agile, lean structures of small pharma companies with too many SOPs. However, the great benefit of this SOP is that it will help your company better organize its approach and force it to seek external expertise, as needed.
2. Never rely on a single quote.
It is essential to approach several different CMOs, ideally some of different sizes and having different business models. Sponsors have no idea how much they can learn from a quote. Each CMO will ask different questions and help you see your outsourcing from a different angle. If you opt for this best practice of quoting several CMOs, make sure you also structure your request for proposal process. Prepare an RFP, which is also called RFQ, for request for quote. This will help you compare apples with apples and make your decision process easier.
3. Include an early technical visit.
The purpose of the technical visit is not only to assess the CMOs’ technical capabilities but also to assess the risks of not meeting your timeline, budget, and regulatory expectations or not achieving the desired product quality. The earlier the risks are identified, the better. Is there a need for equipment or tooling with a long lead time? I have already seen a capsule banding tool that had a 10-month lead time from the time of ordering to the qualification on the equipment!
Also, being on-site will likely allow you to chat with your counterparts and technical staff to get a better sense of their expertise to handle your product and process.
4. Initiate agreements sooner rather than later.
We scientists tend to rely a lot on the legal department and hoping everything will be all right. Yes, it will, ultimately, but after how much time?
Favor a master development agreement with an addendum for the product list, as it can be updated as you add more products. Start early enough to avoid these documents slowing your outsourcing projects down the road. Don’t wait to start drafting a template at the time of outsourcing; start preparing one ahead of time, or ask your CMOs as soon as possible in the business relationship.
Being exposed to different CMOs during a well-structured bidding process will allow small and virtual pharma companies to assess what type of CMO would be the best fit for their business model. Some small companies with a low headcount model would like to have a turnkey, fully integrated CDMO from early clinical stages up to commercial; others will prefer to be very involved and be on-site as often as possible. The above-mentioned strategies taken from Big Pharma companies’ best practices will help get any company well started. Other steps, such as a tech transfer plan and a quality audit, will follow as part of the timeline for Phase 3 CTM supply.
About The Author:
Anthony Grenier is an independent technology transfer and outsourcing consultant. A chemical engineer by training, he has completed over 50 technology transfers for both large, public multinational corporations and small specialty or virtual pharma companies, spanning all major segments of the life science industry. He can be reached at agrenier.ag@gmail.com, www.anthonygrenier.com, or you can connect with him on LinkedIn.