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CMOs/CDMOs that are easy to work with, have demonstrated performance track records, and plan for the future are preferred.
Global government regulatory agencies are paying increasing attention to the contract manufacturing space, with increased inspections particularly of overseas contract manufacturing/contract development and manufacturing organizations (CMOs/CDMOs) supplying the US market. At the same time, most pharmaceutical companies are focusing on supply chain diversity as a risk management/mitigation strategy. The increasing complexity of APIs and drug delivery technologies is also leading sponsor firms to seek service providers with demonstrated expertise in complex chemistry, high-potency API production, and small-volume manufacturing. Manufacturers of APIs are crucial links in the pharmaceutical industry supply chain. Selecting the right API supplier has become essential for the success of any new drug development or commercialization project.
Before the selection of API suppliers begins, it is important to conduct an internal needs assessment in order to understand the expertise needed to support a company’s entire API portfolio, according to Janel Firestein, life-sciences lead at Clarkston Consulting. “Understanding the technologies your project requires is a good first step,” agrees Eric W. Smart, president of Fountainhead Pharmaceutical Consulting. “If there are special capabilities required, for example the ability to handle a potent compound or perhaps energetic reactions, it is best to seek out companies that specialize in that technology,” he says.
In addition to having the right technical capabilities and resources to support production needs both today and in the future based on the pharma company’s organizational strategy, the right supplier will be able to demonstrate compliance, flexibility, and costs for any existing, established APIs it produces, as well as have a proven track record for hitting regulatory milestones successfully, according to Firestein. She adds that the ideal CMO/CDMO will also have the ability to partner in support of other portfolio and pipeline projects, have innovative technical capabilities in early-phase formulation development, and have developed a roadmap that shows commitment to keeping their facility compliant and efficient.
Smart uses web searches, but also seeks advice and recommendations from people he trusts. “Just because a company lists a capability online, doesn’t necessarily mean they are good at it or easy to work with,” he says. He also finds it useful to create a fairly detailed request for proposal (RFP) that includes the project objectives, quantity, timeline, process description, etc. “The more detailed you can make the RFP, the more consistent the resulting proposals will be (if you get that far with a particular supplier), and the easier it will be to compare multiple proposals,” Smart explains. Compliance history should be gauged through review of recent inspections and their outcomes.
The selection process, according to Firestein, should include a self-evaluation questionnaire, interviews, an onsite evaluation, and a thorough review of any supporting documentation. With regard to on-site audits, Smart usually advocates waiting until a supplier has been chosen, because it is a time-consuming process for both the supplier and the pharma company. Proposal acceptance can be made contingent upon a successful audit.
The criteria by which API suppliers should be judged can vary depending on the requirements of each project. For instance, Smart notes that if difficult or specialized chemistry is involved, finding a supplier with these capabilities should be the focus. If the chemistry/technology requirements are of a more general nature, then he recommends focusing on compliance and whether the supplier appears to communicate well and will be easy to work with. “While it can be hard to assess in advance of beginning work, matching a pharma company’s project management expectations with the CMO’s way of doing things is important,” he observes.
Firestein points to six key considerations, including manufacturing quality, capacity, culture/compatibility, cost (accuracy of the cost estimate, approach to cost-containment), data integrity, and facilities (protocols, location of raw material receiving, sampling, testing, etc.). Product quality can be gauged by comparing the CMO’s/CDMO’s regulatory history against industry standards. The percentage of clients that are repeat customers also gives an indication of client satisfaction, according to Firestein. The number and types of molecules a company has produced-and at what scale-gives an indication of manufacturing sophistication and supply chain diversity.
Data integrity is increasingly important due to the greater emphasis being placed by FDA on this performance aspect, according to Firestein. “Data integrity issues will inevitably create regulatory challenges, but there are also impacts to communication and integration,” she notes.
Smaller sponsor firms should also assess the CMO’s/CDMO’s roster of active clients and consider asking potential suppliers how smaller projects are not orphaned as resources are allocated to bigger-budgeted projects.
“Ultimately, pharmaceutical companies should be looking for CMOs/CDMOs that will treat their molecules as though they were their own,” Firestein asserts. Smart adds that while geographic proximity, price, and the like can sometimes play important roles, in his experience they take a back seat to technical competence and the ease with which the sponsor can work with the supplier.
To an extent, the same criteria should be continuously met throughout the lifecycle of the sponsor/supplier relationship, according to Firestein. “There should be a partnership scorecard established and shared on both sides of the relationship that measures key performance criteria (e.g., on time delivery, number of deviations, batches right-first-time, etc.). It may also include volumes that need to be tracked each year, such as consumption for Drug Enforcement Administration controlled substance licenses,” she observes.
Evaluation of CMO/CDMO performance should be ongoing, with the pharmaceutical company providing honest and timely feedback throughout a project, according to Smart. “Suppliers may not always like what they hear, but they should appreciate it because it is not in anyone’s interest for clients to be unhappy. If feedback isn’t provided, particularly when it is negative, it is hard for a supplier to improve its performance,” he says.
Changing suppliers is usually difficult, because institutional knowledge tends to be lost in the process. Sticking with one supplier all the way through clinical trials and into commercial production is not always possible, but is a good goal, according to Smart. “Even if a project doesn’t go smoothly, a supplier will usually learn important lessons every time a given product is manufactured,” he notes.
Due to the costs and timelines required to onboard a new CMO/CDMO, Firestein adds that establishing a long-term partnership is advantageous. “We advise our clients to catalogue partners’ capabilities, determine partnership goals, regularly review partner results, and continuously evaluate opportunities to invest to extend the value of the partnership. These partnerships are especially beneficial in building out multi-year contractual minimums, where you can agree to dollar minimums across multiple APIs with the ability to rebalance needs as demand fluctuates.”
While switching is difficult, in some cases a project outgrows a supplier’s capacity. In fact, some CMOs/CDMOs aim to serve only clinical needs, while others only work on commercial products. “Shifting from a clinically-focused CMO to a commercial supplier is a pretty easy decision when its necessary. If it is a decision being made because of poor performance, that can be more difficult,” Smart says.
Clarkston Consulting clients have switched in the past due to supply or quality issues with their current CMOs/CDMOs. Others have made a change after reevaluating their supplier bases, making the decision to move from tactical to more strategic relationships with a select group of preferred partners, according to Firestein. “When pharmaceutical companies perform a risk assessment of their entire supply chain for a given product, they often discover that the risk profile is too great for their CMO/CDMO. In addition, as government agencies continue to tighten regulations across the globe, more and more CMOs/CDMOs are finding it difficult to meet the more stringent regulations, so we’re seeing more audit findings (i.e., 483s), which creates risk for pharmaceutical companies and often causes them to pursue new partners,” she observes.
When sponsors do choose to make a change, it is important to get a good technology transfer package put together and, if possible, the assistance of the previous supplier, according to Smart. The practicality of achieving this goal often depends, however, on the circumstances surrounding the need for the change.
CMOs/CDMOs can take steps to make themselves attractive to potential clients. First, according to Firestein, they can differentiate around a core competency in the increasingly consolidated industry, whether through quality, flexibility, or a proprietary expertise. Demonstration of a commitment to the future of their facilities is also important. “Suppliers should make it clear how they will remain compliant and efficient while leveraging industry best practices and new technologies,” she says. CMOs/CDMOs can also prove their dedication by acting as extensions of their clients’ strategic imperatives and showing that their organizations will be aligned through good times and challenges.
For suppliers looking to establish new relationships, the sales team plays an important role in conveying what it would be like to work with them, according to Smart. “Some CMOs/CDMOs never really get a chance at a new project if their business functions aren’t easy to work with,” he observes. Smart also believes it is important for CMOs/CDMOs to get key technical personnel involved during the early phases of the sales process in order to provide prospective clients a good window into their organizations. “Being perceived as a company that is easy to work with and responsive to client needs is, all other things being equal, a key factor in the selection process,” he concludes.
Vol. 42, No. 4
When referring to this article, please cite it as C. Challener, "Unlocking the Best Solution for API Sourcing" Pharmaceutical Technology 42 (4) 2018.