Miller» Are you confident that the major CMC service providers have the financial staying power to be long-term partners?
Stuart» No. This continues to be one of the greatest areas of concern, considering the potential value of the assets being developed
externally. Those companies that can demonstrate some level of financial stability can really leverage this as a position
of strength when bidding or negotiating development contracts.
Lynch» It comes down to doing upfront due diligence to make sure the service providers are qualified to be long-term providers.
Pfizer keeps a very close eye on the impact of global economic changes on some of these providers, and the potential to impact
their ability to meet our needs.
Miller» Do you see a group of preferred providers emerging?
Stuart» I think this [group] has already emerged to some extent with the larger, multiservice providers. I don't see [the group]
expanding much further and believe steady-state [providers] will include both larger, multiservice preferred providers as
well as niche providers.
Lynch» We have a large number of suppliers at Pfizer, and our level of outsourcing has grown significantly in the past few years.
Most of our outsourcing is now with US and European suppliers, with European suppliers accounting for about 70% of the growth
in recent years. The number of sites we have divested drives much of our outsourcing activity. After two major acquisitions
in the past nine years, we began a process of network optimization and were able to divest a number of sites. The divestiture
process usually results in trailing supply agreements with other companies to supply product to Pfizer. In Europe, this represents
a significant portion of the outsourcing we do today. Part of the evolution of our network will involve working with preferred
Miller» Over the years we have seen a variety of sourcing models emerge, including preferred providers and full-time equivalent (FTE)
arrangements. How do you see sourcing models emerging in the coming years? Do you see "one-stop shop" models gaining more
Stuart» Not at this time. It has not been proven that the one-stop shop approach is viable over the long term. Opportunities to bundle
like services will always be attractive, but in the end, excellent performance in a given area will win repeat business.
Griscti» I believe that the "one stop shop" is still the ideal, but I do not believe that any vendor has been successful in developing
it. There is too much specialization required in certain categories, particularly when it comes to technology, for one vendor
to be able to do everything well.
Lynch» Pfizer tends to focus on the specific strengths of individual providers. There is a legitimate concern about putting all
our eggs in one basket. However, we do evaluate all opportunities and, where it makes good business sense, we are prepared
to consolidate activities. Gaining experience and confidence from working with a supplier is a key element in this process.
Miller» Will global models develop—for example, a model in which providers are chosen to fulfill manufacturing, testing, or development
needs using a full global network of sites? Could a contract manufacturing organization (CMO) such as Lonza, with facilities
in the US, Europe, China, and India be advantaged?
Stuart» Possibly, but in order for this to be realized, the level of sophistication of integration across provider sites will need
to increase dramatically. We continue to see more "site-based" operations as the current norm, despite efforts by providers
to integrate their network.
Griscti» I think global models will be developed—some already exist. It's the next step down from the "one stop shop." If one vendor
can't do everything, there is logic in having them do everything they can reliably do well on a global basis.