35th Anniversary Special: New Models in Contract Services - Pharmaceutical Technology

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PharmTech Europe

35th Anniversary Special: New Models in Contract Services
Sponsor companies' increasing focus on strategic outsourcing has changed the rules of the game.


Pharmaceutical Technology
Volume 36, Issue 7, pp. 62-67, 73

Looking ahead

PharmTech: How will the contract service provider of 10 years from now differ from today's provider? Are there models from other industries that might be adapted?

Michael Kosko (Pfizer CentreSource): I see a number of areas where contract providers might modify their existing business model to be successful in the future:

  • Reach: Moving forward, contract service providers will have to expand their global footprints to fully support their customers across major and emerging markets.
  • Partnership arrangements: I anticipate the development of new partnership arrangements that are designed to meet the needs of both customers and suppliers on a longer-term basis.
  • Cost-effectiveness: Managing cost will continue to be a focal point for the pharma industry. As specialized medicines becomes more important, the ability to handle small volumes in a cost-effective manner will be critical.
  • Services: Suppliers will likely expand their service offerings to encompass responsibilities that are currently handled by the customers, in areas such as global regulatory file management.
  • Technology: The industry will look toward incorporating new and emerging technology to enable more highly consistent quality product while managing cost; broader adoption of continuous processing is one example.

Bhatia (DPT): The future contract service provider will be an extension of the pharma or biotech industry in the true sense, with a focus on approvals rather than task completion. Decision-making, regulatory strategy, and a global presence will be key prerequisites in selecting a contractor. The relationship will be more strategic rather than tactical with a significant monetary milestone focus on final approval from the agency (i.e., risk sharing).

Hanquez (Hospira): The biggest driver of the future change in outsourcing relationships is the ever-increasing regulatory scrutiny, and it will reshape the outsourcing competitive landscape. Certain providers will weather the storm by keeping one step ahead of changing regulatory expectations and by investing in equipment and facilities to meet what will become the 'new norm' with regard to pharma manufacturing. Many others will not. Those providers that come out on the winning side will find themselves much more aligned with the pharmaceutical industry, paving the way for the creation of stronger and broader relationships.

Weiler (SAFC): The expectation is that our industry can move into the type of relationships that one sees in other industries. An example could come from the auto industry, where you see that the key suppliers of automobiles are truly an extension of the branded automaker, and the question is whether this can be applied, through QbD and other methods, to a highly regulated pharma marketplace. I have confidence that we will continue to move in this direction, but it will not be easy as regulatory guidance, innovation and clinical attrition will be key differences to other industries.

Hennecke (Xcelience): The next big change in our industry may come from within, but it will more likely be adapted from a peek over the fence into another industry. There is a small chance that our own industry's Steve Jobs is out there now envisioning what none of us have yet imagined, but that will soon become obvious .

What do I see happening in our industry right now? There are so many changes afoot, but one I find particularly interesting is the increasing separation of new product development from existing operations– something our industry is gleaning from the high-tech industry. This separation lets each functional group focus on what it does best. Operational plants can apply lean Six Sigma concepts to streamline process flow and re-engineer facility design in a way that maximizes quality, productivity, and safety while new product-development sectors can harness their market knowledge and development strengths. The contract service provider of tomorrow will almost certainly be one best able to incorporate the voice of their customers into their service offering, but more than that, tomorrow's provider will challenge its customers to think about why they buy the way they do and to help them adjust their business models to better achieve their goals.

Basham (Metrics): We view the changes over the next 10 years will direct most CDMOs to become more global; that is multisite facility operations. However, different than today, we think that these sites will need to have offerings that encompass the whole of the development process. This does not include discovery and research, but a focus on delivering the development process, including analytical support. We think that the pharma industry has some differences in modeling that make it more difficult to use models from other industries. The key item from other industries will be oriented to in process quality and the extension of this into our industry.


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FDASIA was signed into law two years ago. Where has the most progress been made in implementation?
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Source: Pharmaceutical Technology,
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