Michelle Hoffman
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Outsourcing has increasingly become the mark of good resource management on the part of modern pharmaceutical companies. Why
invest in equipment, machinery, space, and human resources for a novel process or product, and why spend time slogging up
the learning curve, if you can find a partner company who already has the skill and equipment to move your project forward?
This realization is especially relevant for firms entering new markets, manufacturing new drug types, or using novel formulations
and delivery mechanisms.
Outsourcing can be an attractive alternative for products in any stage of development, from early-stage formulation and process
development through commercial-scale production. By outsourcing, the client company maximizes efficiency—freeing up time,
personnel, and equipment to do what it does best, and at the same time reduces its investment exposure and capital expenditures.
The partnership can be quite reasonable, but does not come without its own challenges.
For in outsourcing, a sponsor company is giving up a good deal of control and has to balance the risk and rewards of keeping
a project in-house with those of working with external partners. This challenge, although always present in any outsourced
relationship, becomes more difficult with increased complexity in the supply chain. The basic expectations and requirements
for the client and the outsource service provider have not changed. On-time delivery, meeting product specifications, regulatory
compliance, and product quality remain the cornerstone of any successful outsourced relationship.
The outsourcing relationship, however, increasingly operates in a truly global pharmaceutical supply chain through the supply
of raw materials, ingredients, or the delivery of the contract services themselves. And with the elongation of the supply
chain comes attendant obligations and costs in securing that supply chain.
We've heard tales from firms that the cost of their due diligence can exceed the cost of the service contract, at least for
the initial project. Furthermore, it's been estimated that the pharmaceutical industry collectively performs 800,000 audits
each year to ensure the quality of its suppliers in the US and abroad. That's got to use up a lot of resources (not to mention
paper).
It is for this reason we applaud and encourage efforts such as those of the Rx-360 consortium, an industry initiative, which
held its launch meeting in June, with an overarching mission of supporting product quality and authenticity throughout the
supply chain. Among the group's efforts is to explore the feasibility, acceptability, and potential approaches for shared
supplier audits.
The consortium seeks to develop a system that will make audits broader and more thorough and will allow firms to share audit
findings and corrective actions, making the system more effective and efficient. Each consortium member company could use
this information for its own independent assessments on the appropriateness of a supplier based on their own company policies
and product needs. Obviously, the needs of each client may differ, and standardizing audit information to make it useful to
the greatest number of clients in the greatest number of cases won't be easy. Nevertheless, the ultimate saving in time alone
could be worth its weight in—well, if not gold, at least in paper.
Michelle Hoffman is editor-in-chief of Pharmaceutical Technology. Send your thoughts and story ideas to mhoffman@advanstar.com
