Lethal Combat With Your CDMO
By Shawn Eisenberg, Board Member, Outsourced Pharma Editorial Advisory Board
The ways of resolving conflict with your CDMO (or on the other hand, client) are probably as varied as the ways of getting into that conflict.
Following our discussion in Part 1, here are itemized thoughts I share with my own teams, along with specific examples to close the article.
Keep These Ideas In Mind
You are probably both wrong
Thinking three steps ahead can give you some memorable comebacks. However, while you are formulating your next move, you are likely missing important information that could help improve your understanding and suggest next steps. Careful listening pays dividends.
We often leverage email and other messaging rather than human interaction by phone, videoconference, or face-to-face. It’s too easy to misunderstand or ascribe a negative tone to messages or email.
The cues in someone’s tone of voice or facial expressions add layers of understanding that are invaluable. Something as simple as sharing a meal and maybe a drink or two after difficult discussions helps remind everyone they are dealing with human beings, not “the opposing party”.
Take it out of the drawer
Come armed with concrete numbers like annual spend, average turnaround time, or months of delay. Numbers help the other party—and leadership—understand the magnitude of the problem from your perspective.
Leverage the Project Plan and contract. If these documents were developed thoughtfully, the solution might be obvious once both parties review relevant sections. Something positive can come even if the contract is ambiguous: it should humble both parties and hopefully help everyone see that neither side is “right” and some compromise—and clarification—is needed.
I disagree with the saying, “Once a contract is negotiated it goes in a drawer.” The contract and Project Plan are foundational alignment documents that should be understood and monitored for compliance with rights and obligations.
Nobody’s perfect
Owning mistakes—apologizing when appropriate—helps rebuild trust and suggest solutions.
To be clear, discussing mistakes may not be good in every situation or format. Some individuals find admitting error difficult, even shameful. Forcing someone like this to confront their errors head-on can be counterproductive. If you sense this discomfort when their error is obvious, it’s wise to offer a face-saving solution and approach. The goal is to overcome the challenge at hand.
If a conflict does become heated or unhelpful, call a timeout. Give teams space to calm down, think, and discuss amongst themselves. Under time pressure or travel this can be a challenge, but even short breaks allow teams to organize their thoughts and consider new positions.
Resetting signals to everyone that things have gone astray. Leverage the opportunity for calmer individuals from both parties to meet one-on-one to analyze why things have gone negative and consider more productive approaches.
Everyone has different soft skills, experiences, and relationships. Use your whole team in a coordinated and complimentary fashion to help optimize outcomes and resolve conflicts quickly. That does not mean you field the whole team all at once; just don’t leave good players on the bench when they could add value.
Real-World Examples
These examples illustrate a few of the ideas discussed above.
- Nearly 40% of a new products limited shelf-life was consumed in contract QC testing labs across the supply chain. Initially the contract labs would not commit to tighten their turnaround times. However, an industrious team member assembled an exhaustive list of method durations. Armed with this data, she visited a key laboratory in person and demonstrated with their own data they could complete all testing in 21 days.
This resulted in a commitment to reduce turnaround times by half, from 45 working days (63 calendar days) to 30 calendar days, with the possibility of future reductions.
- A project where method validation started late due to CDMO bandwidth limitations further threatened Phase 3 timing when the method itself failed. The solution-focused analytical leaders at both parties avoided finger-pointing.
The CDMO pushed hard to limit customer impact, and both parties agreed to forward process under quarantine, minimizing critical path delays. This increased workload and risk, but kept the project moving forward.
- A CDMO decided to close a facility just as a customer needed more clinical batches. The customer had no capacity commitments and the CDMO could not support the request. Following candid discussions about business drivers on both sides, the CDMO worked to accelerate tech transfer to another facility under equitable business terms.
The customer then took on risks in adjusted regulatory and supply strategies. The combined efforts avoided study delays.
- A customer trying to hit cost of goods targets put pricing pressure on the CDMO. Rather than eroding CDMO margins, the sponsor’s chemists noted an expensive raw material that complicated the waste stream; they suggested an inexpensive, environmentally friendly alternative.
The customer fronted the laboratory costs and turned a substantial return on investment in the first batch following the successful change with no product quality impact.
- A customer cancelled production slots to reduce spend, despite those slots being within contractual binding periods. The CDMO was unable to mitigate, and the customer paid the cancellation fees, per contract. However, the CDMO committed to opening later slots and waived the cancellation fees.
The end result was not zero cost to the customer and the relationships strengthened as a fringe benefit!
Final Thoughts
Is compromise always needed or even advised? Certainly not. At times, customers must stand pat. Likewise, CDMOs have some lines they cannot cross.
However, in my experience, the resolutions to most conflicts lie between these extremes.
It would be nice to say employing the guidance above, I have always resolved conflicts effortlessly... Good story, but not true.
In fact, I haven’t even always followed my own advice … and of course, most every situation requires its own solution, and those bring us new lessons. Active sharing and applying those improves the entire industry.