“It’s better to know some of the questions than all of the answers.”
-- James Thurber, celebrated American writer and wit
Except that, technically speaking, it wasn’t a panel. Instead, we took the conference differentiator – broad audience participation – to it’s extended conclusion: we did away with the panel altogether, and asked Huyghe (pronounced “highga”) to go it alone.
But it’s also not accurate to say Huyghe went solo; he was part of a dialogue with a room full of pharmaceutical and biotech, contract manufacturing organization (CMO), and other drug development and manufacturing professionals.
The objective was to gain insight into an overriding question:
How do we inject more innovation and technology into Pharma’s external drug development and manufacturing supply chain?
As it turns out, Huyghe has a real flair for interrogative statements. This has served him well as senior director in the biopharmaceuticals and vaccines outsourcing group at Pfizer. That role includes identification, evaluation, auditing, contract negotiation and management of outsourced GMP manufacture. All told, since getting his Ph.D. in biophysical chemistry at UC Berkeley, Huyghe has spent 20 years developing biotherapeutics by coordinating outsourcing activities.
Below we’ve selected some of the enquiries Huyghe specifically asked of the CMOs, and some of their responses.
Innovation: A CMO Question of Budget?
The background to our subject, and Bernie’s semi-Socratic approach, is this: Today, Pharma is asking CMOs to become “partners” in supply-chain innovation, and function as more than traditional fee-for-service and materials suppliers. Yet it appears the CMOs aren’t quite buying into the advance. Bernie opens the gambit with these questions to the CMOs.
How much of your annual budget is dedicated to ‘wild and crazy’ new innovation investigations?
This causes murmuring and seat-shifting among the audience, but little outward response.
How many of you then wish you had a budget that did include funding for innovation?
Again, body shuffling.
Would having funding for innovation help you get customers?
This is the clincher. People move towards the mikes. Here’s one of the responses.
“I’m from an oral solid dose company. We've had many propositions presented to us by Pharma to work on new technologies. But when you think about the business model of a typical contract service provider, we have to maintain a lean staff, and don’t have the resources to research your [Pharma’s] innovation, or to determine whether it's the next great thing with real market potential. To then place our capital and materials towards it feels like the odds for winning a lottery.”
Huyghe takes this, and a few similar comments, in stride. He continues his probing:
How many of you have lost a customer because your company couldn't innovate?
An eager interlocutor steps up to the mike.
“We had a customer who wanted us to build a specialized suite for sterile filling. They couldn’t find a place to do it in the U.S. It was a highly potent compound, and required special containment equipment. Although we had concerns, we said we’d build this facility.
“We spent the time to do the design work and got approvals, but the cost came out very high. We decided we weren’t ready to put the money into this, and wanted the client to pay for it. Ultimately, the client pulled the plug and we lost the whole thing. We were trying to be flexible, but again, CMOs aren’t budgeting for this type of innovation. And it seems Pharma doesn’t want to budget for it completely either.”
An Example Raises More Questions
Huyghe, undeterred, next asks:
How many of CMOs believe some clients may have not approached you to co-develop because you’ve made it clear you don’t partner for innovation?
This is a difficult hypothetical. Bernie lets it settle in before bringing up an example of a successful innovation partnership.
“We’re working on what we call next generation monoclonal antibody production,” he says. “Our goal is to reduce the cost of clinical lots by about fifty to seventy-five percent, maintaining (or even improving) the quality.
How did we set out to do this? (This time rhetorical.)
“We approached a contract manufacturer we’d worked with, to co-develop a solution for this next generation monoclonal antibody manufacturing. We initially discussed our ideas and how we could both benefit. There was a lot of discussion on who owns the IP, and defining the freedom to operate, and other issues.
“We established an annual budget, with each side chipping in equal funds and devoting FTEs. It has been a very cooperative effort, and the results to date are very promising.
From the audience:
What about the difficulty with putting the master service agreement together, and particularly the IP ramifications?
“We had to decide who owns the knowhow and any patents. In summary, and cutting to the bottom line, after some negotiation, it was agreed both companies could use the process for their benefit: for Pfizer, either internally or at another CMO; and the CMO could also use the technology and knowhow for their projects. I can tell you that after a few years of hard work, both sides are smiling.
More prying from the audience:
You’re Big Pharma ... Isn’t it simply reasonable to expect you’ll pay for the efforts needed to get what you are looking for?
“If Big Pharma needs something that for whatever reason can’t be done internally, sure, we’ll pay for the efforts. An example is work we’re doing in cell therapy. Our drug product is a cryo-preserved vial. How do we label something stored in liquid nitrogen? Not only that, but we have to label it differently for global markets. Turns out we needed a new supply chain. We reached out to vendors and suppliers to help us settle these kinds of issues.
“I think if Big Pharma approaches you, yes, take advantage of that specific opportunity. But you also have to entice the customer, show you have some skin in the game. What are [CMO] you bringing to the table to help us [Pharma]?
“Today Big Pharma does pay you to innovate and learn. And you’ll most likely be able to utilize that new technology – potentially even with our competitors. So what are we really getting out of the relationship? From the CMO perspective, yes, the challenge is very much to justify the cost. But for us, we’re not always looking at the best price, but we are always looking for the best deal.”
Although we have drawn out some interesting perspectives and dialogue, our first objective here was to ask some of the right questions, a key part of any process for innovation.
So let’s leave with a few other questions Huyghe wants both CMOs and sponsors to think about for drug development and manufacturing.
What new technology is out there that we could benefit from or improve on?
Where would your supply chain benefit the most from new technology or innovation?
What is your upfront investment to bring it in, what is your return, and what are your risks?
What customers – and what patients – would benefit?
Here’s hoping you all come up with helpful answers.
Pfizer’s Bernie Huyghe will be at Outsourced Pharma San Francisco (Nov 1-2), which is devoted to this subject of driving innovation and technology in the external supply chain. Thanks to Huyghe for getting us started with the right questions.