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Agnes Shanley is senior editor of Pharmaceutical Technology.
As CMOs shed their old toll processing role, sponsors can expect the right questions, proactive communication, and a firm grasp of risk management and tech transfer from contract service providers.
Over the past five years, Big Pharma and Big Biotech have laid off thousands of specialists in manufacturing and technical operations. As a result, sponsor companies have fewer in-house resources for handling technical operations or managing contract manufacturing and contract development and manufacturing partners.
This challenging new environment offers contract partners a chance to play a much more strategic role in their clients’ development projects, and to take on more of the work that was once handled by internal tech ops departments. Focusing on these opportunities is Rottendorf GmbH, which has been working in oral solid-dosage form development for 87 years. The company set up Rottendorf Pharma, its US subsidiary, in 2011 and it is now one of the country’s top contract development and manufacturing organizations (CDMOs), manufacturing more than 600 products for more than 200 clients around the world.
Rottendorf’s new mantra is Total Process Ownership, as its executives see a need for CMOs to move from a traditionally passive role. Today, instead of merely manufacturing products to client’s stated specs, they must actively manage process and product development and risk, with their clients.
“In the end, all that customers want is a robust supply chain, with product that is on time, on spec, and deviation free,” says Stephan Fleck, CEO of Rottendorf Pharma GmbH in Germany. “However, achieving these goals requires a very good understanding of the manufacturing process for that specific product.”
In an interview with Pharmaceutical Technology, Fleck and Gordon Haines, CEO of US-based Rottendorf Pharma discuss industry trends and the company’s strategy.
Total ownershipPharmTech: What made you decide to set up a US business, and how did the Total Process Ownership motto evolve?
Fleck: The turning point came in 2009, when I took over leadership of the company. Both Gordon [Haines] and I had been on the other side of the table, Gordon, with Procter and Gamble, and me with Bayer, and, years before that, with GE. We had a good idea of what we would expect if we were on the client side. This led to our establishing the US company.
We think that next-gen CMOs are more tech ops companies than classical toll operators. They need to demonstrate competency on all levels.
This requires being a really good pharma company, and being very strong in pharmaceutical technology, in modern manufacturing methods, and in Lean Six Sigma type operations. That way, you’re not simply manufacturing a product, but mastering what is needed to develop and make it. We’re focusing on that approach, and that’s also why we built a development center about three years ago. Today, we find that more US companies see the value of this strategy.
Transferring techPharmTech: How do you optimize technology transfer? That seems to be an area where many sponsors, and their contract partners, stumble.
Fleck: We’ve put a lot of effort into defining the transfer process. You can’t just copy a product. You have to design and define a new process based on customer requirements, but adapted to your equipment. The most important thing is doing gap analysis and linking it to risk assessment to define the true process manufacturing parameters and maintain them. This is also what regulatory authorities are increasingly coming to expect.
We have our scientists work in development for a while, then move over to the tech transfer department, so their skills are available when the new product comes to us.
PharmTech: All this assumes that clients are giving you the information that you need. In many tech-transfer projects, intentionally or unintentionally, critical information is not shared, leading to problems. Do you find that sponsors trust you, or do they withhold crucial information?
Haines: As we talk with customers, we’re very proactive about addressing the need to communicate, up front. We tell them that they need to tell us what they already know, if we are to maintain schedules and goals.
Fleck: We have had more than one customer doing a transfer that did not give us all the information we needed. It’s understandable, especially when you work with a CMO for the first time. You may not yet trust them.
In addition, there is some information about manufacturing that is necessary for understanding the product and process, but isn’t always documented in detail.
But, in order to become a strategic contract partner, you need to understand the manufacturing even better than the customer does. That is why real product experts are needed during the transfer phase, to ask the questions that need to be asked. In turn, this promotes customer trust.
We make a very clear risk assessment at end of tech transfer, in which we note areas where more investigation is needed, where there might be increased risk. Then we show customers the various options for mitigating that risk.
When they get this information, customers tend to become more open. Without establishing confidence and trust, both parties dance around each other. That’s when you go into commercial manufacturing and have issues. This is why transfer is so important, and why it requires such a strong scientific base.
PharmTech: You have mentioned that the company has a unique structure. Can you explain?
Fleck: The founder of this company set it up so that it would not end up as a pawn in the merger and acquisition game. The company is a normal GbmH convertible to an Inc., but it is owned by charitable trust, the Rottendorf Trust, which holds 99.4% of its shares. However, the trust has only 4% voting rights. Each of three minority shareholders holds 32% of voting rights. All profits stay within the company, where they can be used for growth and additional investment. In addition, the firm cannot be sold and is completely independent. The stability and agility that this structure promotes is very attractive to our customers.
Continental contracting strategiesPharmTech: Do you see a difference between the way that sponsor companies in United States and Europe deal with contract partners?
Fleck: US companies are a bit more modern about this. They are more open, and can trust more. European customers tend to want to do everything themselves. It seems to me that more US-company leaders understand that you can’t have a full tech ops department inside your company and then also utilize toll processors.
At this point, we see that US companies tend to be looking more for strategic partnerships and for collaboration. Some even give us access to internal IT so that we are treated like an in-house site. Most Europeans companies still outsource on a case-by-case basis. In general, we would like to start work with clients earlier in the development cycle.
Haines: Also, small and virtual companies are often an ideal match because they don’t even have big bench or tech ops capabilities. Working with a partner that can take them all the way to market allows them to keep ownership of product themselves.
Rottendorf doesn’t make any products with our own name or brand so we never compete with customers. We also bring an in-depth knowledge of what different coatings and formulations can do for a product.
PharmTech: Looking at your overall contract business, what percentage would you see is made up of strategic partnerships and what percentage of transactional business?
Haines: At this point, I’d say it’s 50/50, because nonstrategic business is still out there. However, we’ve come to realize that nonstrategic business can become strategic over time, after successful projects.
If you solve problems proactively and show that capability a few times, you build confidence and trust. In the end, it’s about competence, not machine hours.
Managing riskPharmTech: We’ve been hearing more about risk sharing in business contracts. Is that the norm today?
Fleck: We have companies in development stage that come to us and say, ‘We have a great idea, but we don’t know whether this will work or not.’ In these cases, sometimes we will do the development for free, as an entrepreneurial investment. If it succeeds, then we share the profits.
Unfortunately, some customers with established products may have a specific mindset. They come to us with instructions, we follow them, and then the product doesn’t meet final specs. Even though we did everything according to spec, customers say ‘It’s your problem.’ Good tech transfer and strong risk assessment can prevent these situations from happening. There must also be a clear understanding of who pays for what, up front.
Some people still don’t realize that, if you don’t really understand the product, you’ll face these problems over and over again.
PharmTech: Are you instructing your customers in risk
Fleck: Yes and no. There are different kinds of customers: those who like to put blankets over things and those who are proactive, who want to do pharmaceutical QbD and risk assessments with us. We also have some strategic partners who want to improve, but aren’t demanding these approaches. But, as we’ve seen, problems will come up in commercial stage anyway if they aren’t dealt with before.
Tech trendsPharmTech: Are you seeing increased customer interest in continuous manufacturing?
Fleck: Many customers talk about and ask for it. We have technologies available to do it, for example, hot-melt extrusion and nanotechnologies. A lot of development work is going on but nothing commercial.
Haines: One problem is that there still isn’t a lot of guidance from US and regulatory agencies on this. The technology may be on the horizon but groundwork has to be laid before it can be used.
PharmTech: How important is analytical method development and validation?
Fleck: Method development, analytical method transfer, and development can be even more critical to a project’s success than the manufacturing process. We are beefing up significantly on our method transfer and development group. Knowledge on the customer side is not always that profound in these areas, so we need to master methods and demonstrate understanding to meet stricter requirements from regulatory authorities. We believe that this is key requirement for CDMO and CMO success in the future.
CMOs, sponsors, and communicationPharmTech: Generally, what are the biggest challenges that CMOs have in working with customers today? Are there specific questions that clients need to ask, and best practices for day-to-day communications?
Haines: Any issues that come up wind up being 90–95% communications related. We focus on modern manufacturing approaches, so, at every step in our processes, we have documented processes and procedures that allow us to make sure that we don’t miss big important pockets of information. You need to have good procedures in place to make sure you get everything you need.
CMOs must be willing to question their customers. We are not afraid to ask clients questions about their formulation, and whether they had thought about this or that potential problem or issue.
We also need to prevent the negative risk sharing that comes from accepting a product with less-than-robust batch manufacturing instructions. Because if you do, you’re soon into the conversation of ‘You accepted it and now you have to deliver. Oh, yes, and now you have bad product.’
Fleck: For me, best practices boil down to two things: Asking the right questions based on a thoughtful, standardized approach using modern tools such as gap analysis, FMEA and risk assessment; and, having a deep understanding of pharmaceutical technology.
Once, we had a customer transferring a big and important product. We had a lot of questions. They didn’t tell us that the product would have a tablet-sticking problem, for instance. We found that out, using a systematic, standardized approach.
You have to remember that, often, the people involved in a tech transfer did not develop the product. In this case, they had been in position for a year, and the product had been developed five years ago.
We had to ask the right questions, and the customer had to be ready to listen openly. Then we combine the approach with standardized tools and we both gained the understanding. We take a very proactive approach. If a customer doesn’t know that there might be a problem, why should he or she dig for additional understanding?
Haines: Another part of what a customer might ask is how the CMO is structured for a transfer process. Do they have a single point of contact, are there regular communications and structured communication?
We think that each customer needs one main contact person. We also sit down and agree on a regular communications plan, structured meetings, and develop and commit to team approach schedule. Both customer and contract partner agree to the schedule and the assumptions upon which it is based. If assumptions change, then the team agrees on change.
Qualifying qualityPharmTech: Where do Lean Six Sigma (LSS) and Operational Excellence figure in all this?
Fleck: All project leaders in our transfer and development group are trained in LSS tools. All are at least green belt and working on black belt certification.
PharmTech: How do you staff your projects?
Haines: We have a multidisciplinary team with a project manager who is the point of contact. He or she draws from a pool of experts across the company to build the team. Standard players would include an analytical methods person, a process person, a commercial manufacturing person, a quality person, a QC person, and a project manager. Then, various and sundry experts can float in and out of the teams.
A team leader brings all experts on the team together. This person is the ‘go to’ person with accountability and authority. In addition, we require that the team leader has to be at least a green belt in Lean Six Sigma.
PharmTech: Are scientists also trained in LSS?
Fleck: This training goes down to the operator level. We have 200 white belts and 80 green belts. We drive Lean Six Sigma and Operational Excellence thinking throughout the organization. You can’t just do it at the head.
Everyone at our company is in contact with LSS and Opex, and even the operators who handle the equipment know what QbD is. For four years, we have worked with a company in Switzerland, which trains our staff in operational excellence concepts. You can’t do this as a six-month project.
Article DetailsPartnership Strategies in OutsourcingSupplement to Pharmaceutical Technology
Vol. 39, (2) Supplement
Citation: When referring to this article, please cite it as A. Shanley, “Tech Ops for Hire,” supplement to Pharmaceutical Technology39 (2) 2015.