Project Management and CMO–Sponsor Relations

Using basic project management tools and ideas in the transfer process saves time and money and ensures high success rates.
Aug 01, 2007
Volume 2007 Supplement, Issue 3

Pharmaceutical outsourcing is increasing. As companies turn more frequently to contract manufacturing organizations (CMOs) to achieve short and long-term production goals, there is an increased need for understanding project-management tools and how to apply them to the entire production-transfer process. There are three natural divisions to consider in this process: business development (project evaluation and setup), project planning and execution (day-to-day operations), and the quality component (quality assurance, quality control, and regulatory functions). Each of these areas requires thorough attention and proper perspective. Furthermore, transferring the production of pharmaceutics is a complex process, fraught with a myriad of details. Success occurs when considerable organization, preparation, communication, and compromise are used throughout the project.

Business development

Project management actually begins before outsourcing. Before a project is accepted by a CMO, the sponsor company must understand every aspect of the project. Knowing what services are required to compound, fill, test, package, and release the product within timeline requirements enables the sponsor to find a CMO who is well-matched to meet its needs.

From the outset, both the sponsor company and the CMO must know their associated risk tolerances and communicate them, although their definitions of risk tolerance may differ. A CMO typically defines risk tolerance as an evaluation of how something or someone will affect its facility, staff, or its regulatory status and the effect this impact has on its current and future clients. A careful and complete review of the project and sponsor-company needs by both parties allows for risk assessment and effective scheduling.

To ensure that sponsor company and CMO goals are in sync, all business pieces must be in place. It is essential to understand the business project life cycle or the business process flow of the sponsor company and CMO. The business project life cycle includes technical evaluation, agreement to do business, and formal agreements.

Most companies require a confidentiality agreement (CDA) be in place before information is exchanged. Each company's acceptable boundaries can be determined by asking questions such as, What state or states will the company accept for governing law? and Will the CDA apply to an individual product or will it be an open CDA? A three-way CDA is valuable when including an active pharmaceutical ingredient (API) manufacturer or third-party laboratory. Consider, also, the acceptable term or length of the CDA. This information speeds up the process and reduces the number of times documents are sent to legal departments.

Technical evaluation

Once a CDA is in place, a sponsor company usually submits a request for proposal, a request for information, or completes a project questionnaire. This process is referred to as the data-acquisition phase. These data enable a CMO to evaluate the projectscope. CMOs will have different requirements at this phase. They may request a teleconference, additional documents for evaluation, or a technical visit by the sponsor company to explain complex processes. The purpose is all the same—data evaluation. The goal is to gather as much information as possible to provide an accurate quotation to the sponsor company. Preparedness up front will save time and money because incomplete data or unknowns could lead to project-scope changes, adjustments to timelines, and increases in the cost and risk of the project.

Agreement to do business

Should the sponsor company and CMO come to an agreement on the project's scope, price, and timeline, they must also agree on the system that will be used to move them to the next step. Approaches to consider include verbal agreements (although not recommended), signed quotations, letters of intent, contracts, and quality-systems agreements. Knowing the options that are available up front allows the sponsor company and CMO to work together in a timely manner to set the appropriate document in place.

Formal agreements

Effective formal agreements take time and encompass the entire scope of the project. Project leaders must ensure they have a clear understanding of the formal agreements to avoid problems. Cancellation fees, payment terms, forecasts, and failed batch provisions are some examples of items that should be covered in the contract. Having a solid understanding of the signed formal documents allows project teams to focus on the technical day-to-day activities of project management.

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