Non-Clinical Supply Needs More Outsourcing Strength
By Louis Garguilo, Chief Editor, Outsourced Pharma
Hedley Rees won’t mind my informing you he started in the industry in 1979 in supply-chain operations.
He enjoys referencing his longevity, leaning into his experience to form his current disposition on drug development and manufacturing outsourcing, which is:
We could be doing a heck of a lot better.
Rees is a supply-chain reformer, book author, and today an advisor to drug sponsors of all sizes, investors, and policymakers. He works from his perch in South Wales, UK, at his consultancy, PharmaFlow Limited.
To start explaining his thoughts, he says, “the non-clinical supply chain as the foundation of reliable commercial supply receives too little attention from prospective clinical trial sponsors.”
The Overlooked Non-Clinical Supply Chain
“I've sat on many early-stage development project teams at biotechs and listened to these conversations. From the start the focus jumps to the clinic. The mindset seems to be this non-clinical development stage is just a barrier to jump over.
“But this is precisely where you make all the decisions you have to live with for the rest of the program.”
Not a few of his clients, he says, have explained their earlier programs failed because they hadn't adequately thought about the whole journey – the idea of the drug as building the supply chain.
Experienced biotechs know that the non-clinical supply will be the platform towards commercialization, either for them or for a pharma company that may acquire their asset.
These professionals, he says, understand this early stage is their sole opportunity "to get in shape to traverse the valley of death and arrive safely on the other side to deliver well-earned rewards.”
Other biotechs, unfortunately, are less focused and strategic in the non-clinical phase; their thinking is more piecemeal: get necessary activities done as fast (and/or cheaply) as possible.
For example, these biotechs don’t take into consideration that going to one small partner for enough drug to get through animal studies, and paying a CRO to do safety testing and write the study reports, then you are with a number of externalities that have created the data but are not going to make the journey with you.
“That data ends up in your IND or any regulatory submission,” Rees says. “So from the start, your supply chain has the feel of a poor relation to your clinical development phase.”
Rees says it didn’t used to feel so disjointed, and a look back will may provide valuable perspective.
What Gone Too Far
Rees began his career at Miles Laboratory, a U.S. company taken over by Bayer the following year. “We made everything under one roof,” he says.
One project was Alka Seltzer:
“We bring in the raw materials, make the whole thing straight through. Blend the citric acid, the aspirin, and the sodium bicarbonate, pack that up, put it into finished product, pack into shippers, and ship directly to hospitals and pharmacies and a small number of wholesalers. For overseas supplies, we'd send to other Bayer entities. There was a close connection with manufacturer and customer base.
“I lived through the whole outsourcing of manufacturer and distribution from the mid-1980s onwards. I've seen the difficulties of the contractual relationship. It's built on legal terms you put together, not essentially on the mutual enthusiasm of the parties.
“I'm 75 now and seen seen more than I wanted to,” he says with a laugh. “I find it difficult not to keep telling people, ‘Look, we've gone too far with this brand of outsourcing.’”
3 Prescriptions For Improvements
Having stated as much, Rees recognizes we are not going back to those all-internal models. In fact, he quickly pivots to ideas for we can continue to outsource more, but do it better.
His first idea is to build sponsor-CDMO relationships on shared destinies. Arrangements where if the drug gets to market, sponsor and provider share in the profits.
I quickly interject with the known difficulties of the “milestone” or “risk-sharing” models; while they work up to a point, CDMOs have challenges running their businesses this way.
It’s like the J. Wellington Wimpy line in the old Popeye cartoons: ‘I'll gladly pay you Tuesday for a hamburger today.’ The problem is Tuesday’s payout doesn’t happen.
Unfazed, he retorts: “Well, that's where I sit.” He knows of milestone-like agreements that have worked for both sides, and Rees believes we should invest more energy as an industry to figure out how to create these opportunities.
“CDMO employees should have the same enthusiasm, the same joy when getting a drug to market,” he says.
Rees’ second idea works not only to improve outsourcing, but our entire drug industry.
“I'm passionate about getting physicians and clinicians back into drug development,” he says. He’s written a book that details this, Transforming the Pharmaceutical Supply Chain.
“It would be so effective if doctors – who understand the clinical indication – form a sharing network to compare notes on a drug. They may find an off-label use and start to build a case for that indication," he explains.
“If these doctors also understood the CMC element or had access to CDMO relationships, they could bring drugs to market themselves in a more patient-focused approach. They may not be massively profitable, but there may be more drugs that patients can benefit from.”
But it’s his third suggestion that most surprises. If we are stuck with today’s outsourcing model, then let’s go all the way and go early to a CDMO.
Today we have large, integrated CDMOs that can help you avoid the trap of not immediately focusing on the supply chain – you have a partner who does all that for you.
“I would say full integration is the best CDMO situation for the product license holder,” Rees says.
Involve a CDMO with capabilities for DMPK and safety studies you’ll need. Moreover, today “we can move forward with less expensive ways of using predictive technologies at the companies who have the manufacturing skills.”
“Let’s fully accept that CDMOs have the skills, and technologies. This also allows us to think outside the box when it comes to contracting,” Rees says.