Does Your CMO Have A Contingency Plan?

By Rob Wright, editor in chief, Life Science Leader

In August, I flew to New Orleans for personal reasons and soon found myself unable to leave as a result of Hurricane Isaac. As the storm approached the city, many of the area businesses and residents began preparing for the storm — shutting down early, boarding up windows, purchasing fuel for generators, bottled water, canned goods, and so on. When a hurricane is coming, residents even fill up the bathtub with water in case it is needed for flushing toilets. In essence, the hurricane reminded me of the importance of contingency planning, an important practice in the pharmaceutical and biotech industries. What if your primary CMO is unable to provide a reliable supply of product as a result of a natural disaster, terrorist event, or FDA-mandated shutdown? What do you do?

If you are a pharmaceutical or biotech company, having a well thought out contingency plan can mean the difference between life and death. Did you know that 50% of all companies which are reliant on computer services that experience a disaster, and do not recover within 10 business days, never recover financially or file Chapter 11?

So whose responsibility is it to create an effective contingency plan, yours, or your CMO’s? You might think that most quality driven organizations will have contingency plans and a contingency planning process. But do they? Have you checked? Does your CMO have a plan in place that if one of its sites has to shut down, it could quickly ramp up production at another location? Better yet, are they willing to create an agreement with one of their competitors that should they drop the ball and not be able to produce your product, a competitor could quickly step in to save the day? You may think this sounds crazy, but to me it sounds like excellent customer service and the kind of company with which I would want to do business. If your company has never considered developing a contingency plan, or perhaps it needs to be dusted off and updated, but you are unsure of where to start, a basic disaster recovery and contingency plan can be found by going to www.adminservice.org/templates.

If I were the CEO of a company which outsourced its manufacturing capabilities, I would certainly be inclined to thoroughly vet any partner company on its contingency plan for being able to deliver my product. You should too.