Representatives from Pfizer (New York) and Johnson & Johnson (New Brunswick, NJ) discuss current and future trends in pharmaceutical
outsourcing with a focus on chemistry, manufacturing, and controls (CMC) outsourcing. Participating in the roundtable, moderated
by Jim Miller, are: Paul C. Stuart, vice-president of clinical supply manufacturing and distribution, Worldwide Pharmaceutical
Sciences Supply Chain, at Pfizer Global R&D; Rhonda Griscti, senior director of category lead clinical services for Global
Pharma R&D Sourcing at Johnson & Johnson Pharmaceutical R&D; and Macdara Lynch, vice-president/team leader for global contract
manufacturing at Pfizer Global Manufacturing.
Chemistry, manufacturing, and controls outsourcing lags
Miller» Over the past five years, pharmaceutical companies have outsourced much of their clinical and preclinical research, but chemistry,
manufacturing, and controls (CMC) development and manufacturing seem to have lagged this trend. Why do you think CMC development
and manufacturing have moved more slowly?
Stuart» I think there are two key factors. First is the lack of robustness of the capabilities of the external market in these areas.
External providers for clinical research in general are far more sophisticated compared to their CMC development counterparts.
Second is the perceived risk of missing the opportunity for knowledge capture gained from internal formulation and process
development. The downstream benefits gained from intimate product knowledge captured through the development cycle pay huge
dividends when it comes to scale-up and commercialization activities downstream.
Griscti» Trust. In initial outsourcing efforts, there were significant issues with performance and learning to manage partner relationships.
Expectations were not clearly articulated and, therefore, were not met. This has led to a distrust of third parties for CMC
development and manufacturing that has taken a lot of time and energy to overcome.
Lynch» In terms of development work on new chemical entities, large pharmaceutical companies have tended to keep this function in-house
based on a desire to retain control of the process and associated intellectual property. On the production side, if it's been
moving more slowly, the reason is likely that many companies are still not comfortable with how to effectively manage the
potential risk associated with outsourcing in general. Once a company begins to outsource, it starts moving up the risk curve;
manufacturers always have more confidence in the robustness of their internal systems and processes. This is especially true
in markets where regulatory systems are still developing.
Miller» What is different about CMC development relative to other development activities?
Stuart» Diversity of work in CMC is higher than in other areas. There is very high complexity and range of dosage forms for development
and clinical manufacture. This complexity requires unique areas of specialization both from a human resource/skill standpoint
and asset standpoint (e.g., process trains for manufacturing). To meet the full needs of a "Major Pharma" portfolio requires
a fragmented vendor base, whereas clinical research can be consolidated to a few contract research organizations (CROs) who
have proven expertise in areas such as study execution or patient recruitment.
Griscti» In reality, there is no difference. All these activities require talented individuals who can not only manage the projects
and understand the science but also communicate effectively.
Miller» Emerging economies, including India, China, Brazil, and Eastern Europe, have become major centers for sourcing and targets
for top-line revenue growth. How do you see emerging market vendors fitting into your sourcing and manufacturing plans? For
example, will cost remain the major driver for sourcing in emerging markets?
Stuart» Cost, along with a proven ability to deliver, will ultimately drive business to emerging markets.
Griscti» Cost will always be an important consideration, but quality, sustainability, growth potential, and consistent performance
will also be critical factors.
Lynch» Cost is only one of several factors that influence outsourcing decisions today. The need to have a balanced and flexible
supply network is a critical driver as well. For products that require specialized processes, it may be prohibitive to develop
certain manufacturing processes internally. Balancing the supply network means retaining some internal capability but also
having the flexibility to outsource to meet business needs.