1. technology and computing

Business of Contract Manufacturing 101
Saving Time & Money – Now & in the Future
by Optimizing CMO / Sponsor Relationships
IQPC 7th Contract Manufacturing for Pharmaceuticals
November 27, 2007
Paul Woitach
Managing Partner
Pharmaceutical Advisors LLC
316 Wall Street, 2nd Floor
Princeton, NJ 08540
609-688-1330
pwoitach@pharmadvisors.com
1
Approach and Format
• Provide a Toolkit Framework
– Phase / Stage appropriate considerations
– Consider Inputs & Outputs
– Templates / checklists
• Socratic Approach
– The key questions to help you know what you don’t know
– Every case is different – knowing the questions can be more
helpful that generic answers
• Business Perspective
– Highly technical issues but…these are business decisions!
• Follow-Up & Feedback
– Customize discussion for your issues
– Follow-Up Debrief
2
Contributing Advisors
• From Our Advisors Development & Commercialization Team
– James Behling
• Chemical Development, Searle
– Thomas Crawford, PhD
• Chemical Development, Pfizer, Pharm Dev, Millennium
– Suggy Chrai, PhD
• Formulation, Drug Product, BMS, Liposome Co, Mova
– David Dresback, PhD
• Pharm Sciences, Pfizer
– Gary Elliott, PhD
• Product Development, Salmedix
– Kent Iverson
• Biologics Development & Mfg, Coulter, Corixa, Immunex, Genentech
– Dennis Johnson
• Quality, Eli Lilly
– John McEntire, PhD
• Analytical & Operations, Bioreliance
3
How Was This Developed
• Small & Large Company Sponsor perspectives
– Sourcing, Manufacturing Strategy & Vendor
Management projects
• CMOs & CROs Perspective
– Operational, Commercial and Technical
improvement
• Individual white papers
• Client projects
• Years of experience and leadership
4
Advisors Functional Focus
Integrating Research, Development, Engineering
and Commercialization Expertise
Rapid,
Interactive
Expert Panels
Resolve Issues
Build Skills
Chemistry, Formulation
Drug Delivery
Safety & Efficacy
ADME
Practical
Quality
Systems &
Regulatory
Integrated
Development
View
Linking
Regulatory,
CMC, Tox, Clinical
Portfolio
Decisions,
Due Diligence
& Valuation
Operational
Input to
Capital Plans
Scale-up &
Sourcing
Decisions
Supporting
Development, Operations, Strategy and Portfolio Management
5
Program Outline
Build-in Risk Management and Efficiency
1. Ensuring you have an Outsourcing Strategy
–
Link to overall strategy and internal resource
considerations
2. Understanding Yourself and Your Requirements
–
–
Critical considerations often missed during early
development
Project-Specific Clinical, Safety & Other requirements
3. RFPs & Contracting
–
Approaches to reduce your costs and maximize your
leverage
4. Risk Mitigation to Avoid delays & Cost and enable
speed and success
–
Tips & Best Practices
6
What Makes This Challenging?
•
•
•
•
•
You need to get it right the first time
– Potential for manufacturer’s leverage
– High “switching costs”
Very different than working with a captive facility
– Less timing flexibility as captive facilities allow setting internal priorities as desired
whether fully utilized or underutilized
– CMO’s focus on capacity as selling time in a schedule
– CMO’s less able to accommodate schedule changes
– The CMO’s revenues are the client’s expenses
Increased cost associated with changes to plan
– Scope change may create overtime hours and/or premium/penalty pricing
Potential mis-aligned incentives / conflicts of interest:
– CMO’s benefit if a questionable lot is released
– CMO’s may not suffer if a program fails in the clinic
– Some CMO’s and/or their other clients may be competitors to the sponsor
– Competition with respect to Intellectual Property and/or control of information
– Dual-focus CMO’s may exit the contract manufacturing business if their own drug
development programs are successful
Allure of the trap of believing that there is a" Partnership”
– A CMO or CRO relationship is not a “partnership”
– Risk and reward to each of the parties is not usually proportional
– Risk / Reward are not necessarily triggered by the same events
7
Framework for Proactively Managing
Outsourcing Risk & Timelines
1.
Understanding All Your Requirements
A.
Company Strategic Context
i.
ii.
iii.
B.
Link to company strategy
Management support and awareness
Realistic expectations and appropriate internal resources
Integrated Development Planning
i.
ii.
Integrated Development Plans
The right inputs to sourcing decisions
2.
Selection
A.
Well Planned Sourcing & Selection Process
i.
ii.
iii.
Understanding of potential risks in a CMO relationship and have strategies & tactics
to mitigate
Diligent CMO assessment & selection
Contract Structure & Negotiation that balances rewards & leverage
3.
Execution
A.
Program & Relationship Management
i.
ii.
iii.
Planning & maintenance of detailed project plans
Proactive and Relentless Relationship Management
“Partner-like” good-will, mutual respect & professional interaction
8
Structured Process for Success
Integrated
Development
Plans
Strategic
Context
Boundaries
Clinical &
Safety
Program
Requirements
Resources
Drug Substance
& Drug Product
Project
Requirements
Screening
RFP
& Selection
Timing
Regulatory and
other
Internal
issues
Negotiation
Contracting
& Scope
Strategic
Skills
Approval &
Regulatory
Requirements
&
Vendor
ID
Company
Needs
Investment
Strategy
Relationship
& Project
Management
Sourcing
& Selection
Process
Long list of
candidates
Action Plan &
Short
list
Key
Indicators
of Success
Finalists and
selected
CMO
Kick-off &
Tech
Transfer
Proactive
Management
Leverage
and
Alignment
9
So What Does This Have to Do With
Strategy?
Remember - Output is More than Material !
• CMC Outsourcing delivers
– Material
– Technology
– Registration Enabling Information
• Make sure that you consider
– What you should do now
– What you can do now
– What you do not want to do now
Unfortunately, most companies enter contract manufacturing
relationships without being able to consider and plan for all
that’s needed
10
Best Outsourcing Programs Consider
Current and Future Technical Requirements
Examples of Technical Considerations
•
Final Form
•
Interim and preferred synthesis technology
•
Interim and preferred drug product formulation
•
Anticipated synthetic or formulation changes
•
•
•
•
•
•
•
•
•
•
–
–
–
–
Changes to purity profile, how to qualify new impurities depending on stage of development
How API salt or particle size or formulation can change bioavailability & how to address in clinics
Process Development & Optimization needs
Trade off between speed and process learning
How and when to achieve reproducibility of bulk form & quality
Speed and process learning and technical risks vs. new/improved technology
Need for Demonstration of manufacturing including robustness & scalability
Analytical Technology
–
Raws, Intermediates and in process controls, Methods for DS and DP
Process safety & reaction engineering
Preferred Salt, polymorph, solvate – what & when
cGMP needs & timing
–
Clinical and safety demands, GLP requirements and GMP material needs
–
Dosage form development demands
Documents and information needed – Regulatory & Tech Transfer
Sourcing strategies & ability to manage distance
Vendor management & staffing
Need a Strategic Context !
11
Ensuring an Appropriate Outsourcing Strategy
Context – Link to overall strategy and internal
resource considerations
12
Strategic Context
13
Corporate Requirements
Why You Need Internal Clarity Early
How Strategy choices influence your flexibility
• Company and Program Requirements
•
–
Boundaries for choices
–
Senior Management Commitment and Involvement
•
•
•
•
•
•
What to outsource impacts types of Vendors
Strategic skills and activities to not outsource influences types of Vendors and Scope of activities
When to build internal capability influences the types of Vendors, skills you need and knowledge
transfer needed
Links to development plans & priorities affects the Workscope
Realistic expectations & lead-times affects all outsourcing choices AND cost
Cash burn constraints affects choices and timing
Program and Project Requirements
–
When to outsource
–
How to manage it
–
Risk investments
•
•
Impact on development plan re: trade-offs cost & time
Impact on cash burn
•
•
Skills needed to effectively outsource >>>Resources cost & time
Level of resources needed >>>Resources cost & time
•
Investments in non-clinical activities that must be made before a key decision point is reached.
These are required to keep program in continuous development mode.
14
Program & Project Inputs to Consider
• Development Strategy
• Approval Strategy
• Investment Strategy
• Development Plan beyond IND
• Technological Difficulty
• Unique technology needs
• Is it possible to leverage common vendors
15
Broader Program or Considerations
Program Specific Considerations
Development
Strategy
•To Approval
•To POC
•To IND
•Other
Approval
Strategy
•Fast Track /
Accelerated
•Standard
•Staged
Investment
Strategy
•Invest at-risk early to
move faster later
•Postpone Investment
in technology & info
Tactics
Post-IND
•Need for material –
small or large
•Need for non-GMP &
GMP
•Lead Times
Program AND Project Specific Considerations
Technical Difficulty
•Skills
•Timing
•Risk
•Implications for
Safety & Clinical
Unique Technology Needs
•Handling ( potent, energetic, low-dose )
•Is technology suitable for use or is more
development required?
•IP - Any freedom to operate issues
•Need to access IP to succeed?
Leverage Vendors
•Multiple projects
•Common
Technologies
–Need for know-how or technology to remove
IP?
–Proprietary catalysts etc?
16
Development Strategy Alternatives
-Different Approaches to Managing Risk
Alternatives
When
Developing to
Efficacy in Man
When
Developing to
Commercial
Launch
Development Implications
•Work to “Get into man”
•Worry less about restarts
•Delay process optimization, scale up tasks
•Consider minimizing early formulation development
efforts
•Minimize analytical method validation
•Design stability programs on a cost per pull point basis to
allow discontinuation and cost recovery
•Work to “Deliver the First Pill Sold”
•Minimize restarts
•Don’t delay process optimization
•Don’t delay dosage form optimization
•Be more willing to incur process development & validation
cost earlier if efforts reduce risk long term
•May accelerate scale-up & move to commercial vendor
earlier if efficacy risks are reduced
17
Outsourcing Implications of
Development Strategy Alternatives
Alternatives
Implications
To Registration
•Consideration of Commercial Supply
•Different development vendors vs. scale-up vs. commercial?
•Process data for scale-up
•Rate of investment in technology knowledge vs. scale-up
•Final process definition
•Knowledge transfer
•Ability of vendor to develop a process that will be transferred to
other vendors
•Raw material strategies
To POC / Human
Efficacy Data
•Potentially less need for investment in process data
•Ability of vendor to develop a process that will be transferred to
other vendors
•Ability of vendor to tech transfer
•Some need for analytical validation and stability indicating
methods
Other
•Varying need for analytical characterization, technology
development
•Potentially less need for investment in process data
18
Outsourcing Implications of
Approval Strategy Alternatives
Alternatives
Implications
Fast-Track /
Accelerated
•Consideration of Commercial Supply
•Process data for scale-up
•Rate of investment in technology knowledge vs. scale-up
•Final process
•Knowledge transfer
•Limited tech-transfers
•Concurrent activities
•More at-risk investment
•Higher API cost in clinic
•Earlier attention to formulation
•Supply more critical
•Additional internal management
•Plan for analytical bottleneck
•Potential for pre NDA process validation
•Earlier planning for commercial supplier & materials
Standard Approval
•Increased ability to postpone investment in technology
19
Outsourcing Implications of
Investment Strategy Alternatives
Alternatives
Implications
Invest-at-Risk to
ensure
commercializable
technology
•Increased initial cash burn rate
•Increases initial in-house demand for vendor management
•May need to repeat analytical tasks if API salt form or formulation,
or DS/DP mfg process changes
•Plan DS synthesis to enable targeted changes without effecting
entire synthesis – choose earlier what to lock down
Develop DS & DP
suitable for
exposure in humans
to efficacy
Delay investment in
technology and
information until
efficacy data
available
•Reduces initial cash burn rate
•Reduces initial in-house demand for vendor management
•May allow non-robust processes to be used for Phase III CTM mfg
but may delay registration
•Increase risk of DS/DP process changes and hence attributes
during or after efficacy trials
•Increases risk of need for clinical bridging studies should DP
attributes change during clinical development
Invest in Inventory
•Ability to campaign
•Ability to realize batch-size cost benefits earlier
•Ability to do multiple sourcing earlier
20
Outsourcing Implications of
Development Plan Alternatives
Alternatives
Implications
Need for small
quantity quickly
•Requires suitable technology in place to deliver multi-kg
•Documentation less regulated but still critical
•Wider variety of facility choices
•May increase eventual need for tech transfer
•non-GMP material can be used for animal safety studies and drug
development work. Key issue is whether or not it makes sense to
prepare non-GMP material after initial lot.
Need for large
quantity quickly
•Increases opportunity/need to ID Phase III/commercial vendor
early
•Increases importance for early vendor compliance assessment
•Increases importance of early vendor commercial assessment
Need for non- GMP or
GMP
•Can significantly increase speed and reduce cost of API mfg if
non-GMP material can be used for toxicology and formulation
development
•May increase risk of impurity profile changing between toxicology
and CTM batches leading to bridging tox need
21
Outsourcing Implications of the
Level of Technology Difficulty
Alternatives
Implications
Simple
•Internal skills still needed
•Analytical skills required same as complex
•Wider choice of vendors & scale
•Shorter timeline
•Lower cost
Complex
•Variety of technical internal skills needed
•Potentially more limited choice of vendors or for multiple vendors
•Longer timelines
•Greater effort needed to manage impurity profile for CTM material.
•Challenge of scale up increases, increasing time & technology risk
•Increased need for process safety management
•Compounded if BOTH DS & DP have difficult technology
Developed
•Vendor choice more purely technology / hardware & work
processes driven
•Faster mfg process development timeline
Undeveloped
•Vendor choice depends on development AND technology capability
•Implications for Safety and Clinical results
•Slower mfg process development timeline
22
Outsourcing Implications of
Unique Technology Needs
Alternatives
Implications
High Potency / Exposure
Management
•More limited vendor choices
•More costly API
•If volume is low, single vendor for development & commercial
High Chemical Reactivity i.e.
•Is new technology required?
•More limited vendor choices
•More costly API
•Greater scale up challenges
Exo-Endothermic, High Pressure
Hydrogenation Processes
Biologics
•Expression systems IP
•Scale & yield
•Product by process (hard to characterize equivalence)
Need for multiple dosage
forms
•Timing of formulation work
•Timing of / flexibility in salt selection
•Early experimentation
•Increased risk of need to show bioequivalence through additional PK, bridging
tox or clinical studies
Novel Drug substance
Technology/Issues – i.e.
Not Scalable
•Early design of experiments
•Vendor capabilities
•Need for new chemistry / route ID capability
Novel Physical
Pharmacy/Dosage Form
Issues
•Timing of formulation work
•Flexibility in salt selection
•Tox & clinical plan
•GRAS issues with regulatory agencies
Other
•Different development & commercial vendors / more tech transfers?
•Need for and control of new IP to solve development problems
23
Leverage with Vendors
Alternatives
Implications
Multiple Projects
•Ability of vendor to learn common platform and enable speed
•Potential convergent synthesis of APIs
•Location of facilities
•Other functions to consolidate at vendor (analytical development,
sourcing, process safety mgmt.)
•Contracting and quality system costs
•Overall leverage potential and >15-20 FTEs per year
•Allows priorities to be set within context of more than one project
•Ability for speed over data generation or visa versa
•Risk for approval may be reduced on follow-on projects
•Vendor changes
•Risk of overtax vendors technical capability & sub-optimization
Level of
investment in
internal resources
•More efficient use of internal resources
•Ability to manage
•Knowledge transfer
•Cost & time
•Still must do technology audit for each vendor
24
Need for Integration Across Functions
Current
Trials
Clinical
DS
DP
Process Safety &
Crystallization Analysis
Pre-Formulation
Outcome &
Resultant Risks
Tox
QA
ANA
Future
Trials
Control of Impurities
Vendor
Selection /
Location
Outcome to Enable
Clinical Studies
Scalable Process
Development
of dosage form
Risk of need
for Bridging
studies
QA System
& SOPs
Baseline
System to
Manage CMOs
Data Package
For filings
Time
25
Often Not Considered Until Too Late…
Don’t Forget - Integration of DS & DP plans
– DP can not be finalized if DS form is not finalized
– DS form can not be finalized until DP requirements are understood
Timing for finalization of DS form and final DP must be
linked and planned backwards
– Goal would be to have final DS form and DP formulation for use in
all phase 3 studies but variations to this will be fact-driven
– If DP vendor is conducting salt selection work, DS vendor then
depends on DP vendor to begin production!
Critical but often ignored because of the serial nature of
the need for each in the clinic
26
Integration of DS & DP Plans
•
•
Early
–
–
–
–
–
–
Analytical methods & Characterization, Management of Impurities
Physical Chemical characterization as well as Analytical characterization
Salt Selection
Pre-Formulation
Chemistry supply to support Drug Product development
Avoid delay because DS or DP vendor has to wait for the other
–
Understanding and fixing Bioavability issues early
•
•
Will raws be available to make what you need when you need it
Can be a bigger issue than commonly appreciated
•
•
•
DP Timeline
Impact on Quantity of API needed
Avoids need for bridging clinical trials/PK/tox
Later
–
–
Feedback between DS & DP Development
Avoid scope changes & unrealistic demand to make up for lost time
–
–
Timing of Polymorph studies vs. risk
Will raws be available to make what you need when you need it
•
Delays, Erosion of vendor relationship
Don’t Rely on Vendors to Integrate For You
27
But…The Reality
1. In a fast-moving and lean company, many of these
issues can be beyond planning scope
2. Outsourcing challenges are typically underestimated in clinical stage companies
–
–
–
–
Clinical progress drives the company anyway
Lack of experience
Assumption that it’s easy
Perception that it usually works out in the end
3. All of these issues must be within planning scope
but smaller companies do not typically have all of
the skills or experience internal to their
organization, nor should they!
28
Symptoms of the Planning Problem
Dangerous Assumptions We Hear…
• “We don’t need to think about that because we’re
going to license out in Phase II…”
• “Our licensing partner will worry about that…”
• “Let’s just get GMP material for everything…”
• “We’re going to use GLP material…”
• “We’ll get a consultant to write the CMC section when
the time comes…”
• “We’re starting to work on our Quality Manual…”
• “It’s too early to be thinking about a Quality
Agreement – it’s just development work…”
29
Senior Management View of the Timeline
Nomination
PhI
PhII
PhIII
NDA/MAA
Approval
Preclinical
Phase I
License?
Phase II
Phase II
Phase III
Launch
API
Drug Product
API Activities
DP Activities
30
The View You Will See
Nomination
PhI
PhII
PhIII
Evolving
NDA/MAA
Approval
API
API/DP
Launch
& Drug Product
Enabling Technology &
Supply Manufacturer
Demand
API/DP
Technology/Supplies
RM
API
DP
PhIII Supplies
DP Technology
API Technology
RM
RM
RM
Raw Materials
API Activities
API
DP Activities
API
DP
DP
ICH Stability
Enabling
API
DP
Launch
Planning
DP Stability PAIn Planning
ICH DP Stability
Planning
Demand
31
It Pays to Engage Senior Management
Ensure Clarity on
• Boundaries for choices
– What to outsource
– Strategic skills and activities to not outsource
– When to build internal capability
• Senior Management Commitment and Involvement
– Links to development plans & priorities
– Realistic expectations & lead-times
– Cash burn constraints
• When to outsource
– Impact on development plan
– Impact on cash burn
• How to manage it
– Skills needed to effectively outsource
– Level of resources needed
32
Understanding Your Requirements
A Key to Managing Risk
Critical considerations
often missed during early development
33
Requirements - The Good News
• If you’ve done the work in the previous
section well, defining Technical requirements
should be easy
• But don’t forget to consider some of the
execution requirements essential to success…
34
In Addition to the Technical Output…
• Define
– Processes you need
– What decisions to make and when
– Data you will need
• To make decisions before outsourcing
• To acquire as an output of outsourced activity
– Timelines
• Your timeline
• Related timelines
– Ways to ensure and incorporate innovation
• Internally
• Within the vendor
35
Remember - Output is More than Material
• CMC delivers
– Material
– Technology
– Registration Enabling Information
• Make sure that you consider
– What you should do now
– What you can do now
– What you do not want to do now
36
Early Definition of Info Needs
•
•
Remember, you are buying chemistry, product AND information
Don’t lose site of info needed for PAI, Technology Transfers,
Registration
– Know what information you need to build on your process and when
•
•
Establish a documentation system for all contractors
Specify what you want and how you want it documented
•
Helps you plan whether the resources will be available to get all the
analytical work done that you will need
Enable building a Development Report as you go to avoid going back
Demonstrate professionalism and competence to contractors and your
regulatory team
•
•
– Beyond just batch tickets
– Development reports with raw data archiving
Lower Costs and Avoid Rework / Wasted Effort
37
Process Data & Understanding
•
•
•
•
•
•
Affects ability to manage in an outsourced environment
Enables informed decisions on key trade-offs
– Speed of Phase I supply required
• Costlier, slower scale-up & process development
– Early investment in analytics & technology is possible
• Slower initial supply
– Do you know enough to bet on doing all DP work under GMP or should you be doing
some work with non-GMP material?
• Requires Technology info, Supply & Demand info
Scale and Quantity definition for your vendor so they can help you
– When to seek multiple runs at given scale
– When to race to scale-up
– How to apply simulation technologies
– How to determine ROI
– Inputs needed to make these decisions
– Do you know when you need to lock the process for ICH? (ICH stability studies are
registration enabling stability studies done for defined times at specified conditions)
Failure Mode & Effects Analysis (FMEA)
Ability to learn from failures
Analytical needs, timing, resource consumption
All affect vendor selection, vendor ability to deliver and the robustness of your
process and data package
38
Development Reports
• Consider as a deliverable, a requirement for
the contractor to deliver detailed
development, analytical, and production
report
– What was tried, results, and evolution of the
procedure, linked to notebook records and
preliminary reports.
– You then have a good record of what works and
doesn't work
– How the synthesis and analytical procedures
evolved into a manufacturing process and quality
control test methods.
39
RFPs & Contracting
Approaches to reduce your costs and
maximize your leverage
40
Sourcing & Selection Process
Step
Actions & Issues
1
Outsourcing
Strategy
Corporate
Requirements
Program
Requirements
2
Integrated
Development Plans
Clinical
Drug Substance
Drug Product
Drug Safety
3
Program & Project
Requirements
Development
considerations
Clinical Regulatory
& filing strategy
Commercial
considerations
Project requirements
Establish selection
criteria
4
Vendor ID & Initial
Screen
Long List &
Pre-screen / Initial
“paper” screen
Reduce to short list
4-10
Request for info
(RFI) on areas of
interest
Detailed Phone
screen
5
Request for
Proposal (RFP)
Candidates for RFP
Execute CDA
Finalize RFP
Issue RFP &
Quality Agreement
Receive Proposals
Share desired T&C’s
6
Screen & Selection
Assemble and
Analyze responses
Phone interviews
Summarize Ratings
against criteria
Narrow down to top
2-3 potential suppliers
7
Final Selection
Remote / Paper
Quality Audit
Initial site visit
Criteria for QA Audit
Detailed business
evaluation
Tech Trans Package
Prelim. negotiation
8
Final Negotiations
& Contracting
Contingency Plans
Identify Quality
Agreement issues
Finalize Workscope
Finalize price
Confirm Team
QA Audi & Sign-off
Quality Agreement
Sign-Off
PO/Final sign off
9
Kick-off Tech
Transfer
41
Begin to Identify Vendors
• Create Long List
–
–
–
–
Capabilities
Capacity
Location
Reputation
• Information Resources
– Sourcing Consultants
– Trade-Shows & Conferences
• AAPS, Informex, Interphex, Chemspec, CPhI, Contract
Pharma, IQPC, etc.
42
Build a “Living” List of Preferred Vendors
• Document and refresh findings on candidates
as you generate long lists and screen down to
short lists
–
–
–
–
Lack of fit today may not apply to the next project
Reduce search time later
Decide what you will share and what stays internal
Compile for various functions i.e. DS & DP etc.
• This knowledge often “walks out the door” when
employees or key consultants move on
43
Summary of Initial Critical Screening
• The initial screening of candidates is largely document review
and telephone interview
– Limited travel and time investment if you have good access to
prospects
• The more detailed screening involves travel and much more
time
• Contract negotiations should be with no less than two
candidates in parallel until a contract has been executed with
the selected vendor
– Maintain both leverage and a contingency option
– Ideally a general business agreement (master service agreement in
place with 1-3 CMOs for each discipline that allow more rapid
initiation of projects if there is enough work for this type of
strategy.
• Be certain to plan appropriate lead-time for contract
negotiation, as this activity can take several months or more
44
Construct The RFP
•
•
•
•
Workscope
Requirements
Terms & Conditions
Quality Agreement
45
Keep in Mind The Other Side of the Desk
• Vendors Need
– To understand required scope
• Size of project and resource utilization
– To understand their risk
•
•
•
•
Taking on a project with more scope that visible
Appropriate level of “hand holding”
Impediments to meeting timeline
Fit with their skills and schedule
– “Ifs” and “thens” are needed in their proposed scope, if they are
uncomfortable with the perceived risk
• Where go-no-go steps help them manage risk
– Transparency / Ability to put project in overall program context
• Vendor does not need to know the therapeutic target or precisely the
development timeline but some knowledge is helpful
• Gives insight to the vendor to help them help you
Cocktail Napkin TIPS Cost Your Money and Time!
46
Cost of Poorly Defined RFPs
• Poorly defined RFPs and Technical Packages
–
–
–
–
–
–
–
Add cost
Add time
Risks processing proposals for unneeded work
Risk selection of the wrong vendor
Risk re-work
Risk un-necessary work
Reduce vendor choices in the future
47
RFP Package
• The RFP should be structured to
– Enable objective and complete comparison of the candidates
– Expedite the development of a contract
• The RFP and CMO response should be complete
enough to provide the basis for Workscope, pricing
and terms of the contract.
• The Quality Agreement (CMO’s, or response to yours)
enable assessment of vendor Quality policies and
practices and operating basis
– Sometimes challenging to accomplish early but push for it
• Draft Quality Agreement or Key Quality points
48
RFP Contents – DP & DS
•
•
•
•
Brief description of your company (optional)
Brief description of the product (along with Material Safety Data Sheet
and handling instructions)
Overall project objectives and timeline
Detailed scope for vendor’s portion of the project:
•
Requests for information, including:
•
RFP response instructions (due date for submission of response, name
and address of person to whom the responses should be directed, etc.)
–
–
–
–
–
Process description with flow chart and bill of materials
In-process and product test methods and target specifications
What will be delivered to vendor and by when
What the vendor is expected to deliver back and when
Desired pricing structure (i.e., fixed price versus time and materials, mass
unit price versus batch price, etc.)
– Financial status of the company and description of pharmaceutical
development and commercialization programs, if any.
– Confirmation of absence of conflicts of interest
– References
– Manufacturing success rate
49
Tech Transfer Package – DP & DS
• Package Elements
–
–
–
–
–
–
–
Technology
Raw Material specs & vendors
Unit Operations as practiced
Mass Balance as complete as possible
General safety and environmental
Analytical Requirements
Proposed specs for API
–
–
–
–
Help them understand their risk
Typically big ROI – can avoid cost/risk premiums
Reduces “ifs” and “thens” in their proposed scope
Avoids excessive go-no-go steps
• Useful for make vs. buy decisions
• Gives vendor an adequate view
Enable Efficient & Credible Interaction and Decisions
50
The Quality Agreement
• The Quality Agreement is a contract which
describes the roles and responsibilities of the
sponsor and the CMO in terms of compliance
with regulatory guidelines
• Successful companies approach Quality
Agreements in a phase appropriate fashion,
considering that CMOs have many clients.
51
Quality Agreement Contents
• Client’s right to audit (frequency, scope, notification,
trigger points, etc.)
• Product release procedure:
– Specifications, raw material testing and release, etc.
– CMO’s release to client (documentation)
– Client’s final release (required documents and disclosures)
• Change control (limits of CMO’s obligations and
Client’s rights)
• Other notifications and interactions with regulatory
agencies (limits of the parties obligations and rights)
• Product recall (Limits of the parties obligations and
rights)
• Investigations (Limits of parties obligations and
rights)
52
Avoid Inadequate
Quality Agreement Specificity
Examples of Inadequate Quality Agreement Specificity:
• Raw Materials
– Change in impurity provide because vendor switched RM supplier
• Communications of Deviations & Investigations
– Delayed investigation of unexplained variation cost $750K to fix
– Metabolic conditions ( low DO2) and RM changes altered fermentation
• In each the vendor was operating within its agreement
•
Documentation to support filings
– Inadequate documentation resulted in re-work
• Vendor was meeting specs agreed to
• Company had not thought through filing requirements
– Lack of site specific and product specific post-run data check lists
• Does not provide what you need
• Cost and delay of back and forth
• Taxes your scarce resources and busts timeline
Not Spelling Things Out Can Create Big Risks Later
53
But…Avoid Excessive
Quality Agreement Specificity
Examples of Excessive Quality Agreement Specificity
• Issuing the quality agreement too early
– Risk too much quality and cost built in
– Leave some flexibility in how supplier achieves what you
need to be cost effective
• Using the same quality agreement for
– Development agreements
– CTM supply agreements
– Commercial supply agreements
Strike the Right Balance
54
Quality Agreement Balance
• Define WHAT you need but allow the vendor to
propose HOW
– Avoid unnecessary rigor and scope
– Allow for vendors systems
• Consider how Quality Agreements differ for CTM,
development work and for commercial supply
• Careful about applying consultant templates
• QA audit team resource level
– Operational AND Quality considerations
– Consider ability to manage ongoing
– What some can manage, others can not
One of the Key Elements You Should Control
55
Screening & Selection – Common Pitfalls
• Incomplete criteria
• Inconsistent application of criteria
• In screening companies, sponsors often fail to
put vendor capabilities in the broader
context.
56
Vendor Capabilities in a Broader Context
• The vendor can scale up on time but…
– Will the way they scale-up processes be easily transferable to
another facility?
– Or are they best at scaling up for their equipment?
– Does their scale-up plan favor use of their technology
• To what stage can development vendor support your needs?
– Do you know when you need to lock the process for ICH?
– If needed, do you know when you need to confirm and qualify a
commercial CMO?
• Less Tech transfers can be better but know the trade-offs
– Will there end up being internal tech transfers?
Very Few One Stop Shops
Work Back from Launch and know what you need, when
57
Response to Flexibility Expectations
• The best vendors don’t have much flexibility
– Be wary vendors offering too much flexibility!
• Important to understand how they will act when things go
wrong
– Only certainty is that things will go wrong
– Plan with contracting and scheduling lead times
• Add 3- 6 months more or contractor identification and selection
• Build in scheduling lead-times for when problems occur
• Build in iterations for to-be-demonstrated technology
• Understand where there’s leverage and where the vendor’s
situation can affect you
– Need to consider the vendor in context of your future needs
beyond just this project
Only way to maintain leverage is to understand
your future plans
58
Criteria
• Business
–
–
–
–
Business Strategy / Strength
Financial health & stability
Conflicts of interest
Response to RFP & negotiating style
• Technical
–
–
–
–
–
–
–
–
–
Capacity / Scale
Overall Capability
Project Specific Technical Capability
Experience
Proprietary Technology / Tech Transfer
Regulatory History
Location
Cost
Other
59
Examples of Elements of the Criteria
•
•
•
Capacity / Scale
– Must have sufficient capacity to supply immediate need
– Larger scale needed? Y/N
– Commercial capacity and experience needed/ Y/N
Overall Capability
– Route finding & ID
– Process design
– Clinical supply
– Commercial supply
– Process development
– Method development
– Stability testing
– Release testing
– Tech Transfer ( in and out)
– Should have experience with updating the CMC part of an IND and/ support of
materials to be prepared for client pre-IND meetings
– Must be responsive and quality driven
Project Specific Technical Capability
– candidate’s experience with similar projects
– facilities and equipment
– quality of staff for this project
– Unique technical deliverables and their “transportability”
– Response to RFP and scientific approach
60
Examples of Elements of the Criteria (cont.)
•
•
•
•
•
Quality
– If required, must operate to cGMP,and been favorably inspected by FDA/ EMEA
– Regulatory history ( Understand 483s, consent decrees if any, and resolution)
– Must have appropriate Quality unit
– Understand ability to source of all raw materials
– Must have sufficient analytical resources
– Should have capabilities/FDA approval in import/export processes of material for
clinical trials/ commercialization between US and EU
– Should have an Approved Vendor Qualification Program
Location
– Proximity
– Multiple sites
– Internal tech transfer
Proprietary technology/tech transfer
– Does vendor propose to use proprietary technology and what is impact on royalty rate
burden or ability to transfer process or qualify back-up vendor
Cost
– Visible
– Additional
Other
– Must be adequately capitalized
– Must be able and willing to produce references
61
Business Area Evaluation
• The key issues to uncover and assess include:
–
–
–
–
financial stability
conflicts of interest
compatible business processes
acceptance of target financial terms
• The following data and interactions are useful in this
evaluation:
– SEC filings, credit reports, Annual Reports, analyst coverage
of the company, proprietary databases
– Response to Request for Proposal, contract negotiation
– Business/Quality/Regulatory/Technical profile.
62
Quality/Regulatory Evaluation
• The key issues to uncover and assess include:
– ability and willingness of vendor to agree and meet
regulatory requirements
– past or current conflicts with regulatory agencies
– willingness of CMO to agree to the terms of the Quality
Agreement
• The following data and interactions are useful in this
evaluation:
– a QA audit of the CMO’s operation
– response to the Quality Agreement
– FDA inspections, etc.
63
Technical Evaluation
• The key issues to uncover and assess include:
– Ability and willingness of vendor to meet the technical objectives of
the project (batch size, scale, minimal process changes, etc.)
– Willingness of vendor to adapt standard procedures to client needs
within reason
• Use caution when hearing “Our SOPs require that we must do it this
way”
• Understand that you are one of many clients
– Freedom to use IP and production technology to qualify secondary
vendors and/or to use in other projects
• The following data and interactions are useful in this evaluation:
– A list of, and/or data from, similar projects performed by the
vendor.
• Success in moving such similar projects to commercial approval or to
next step
– Equipment lists and information regarding the technical
qualifications of the vendor’s staff
– Information regarding the CMOs production success rate
64
Summary of Initial Critical Screening
• The initial screening of candidates is largely document review
and telephone interview
– Limited travel and time investment if you have good access to
prospects
• The more detailed screening involves travel and much more
time
• Contract negotiations should be with no less than two
candidates in parallel until a contract has been executed with
the selected vendor
– Maintain both leverage and a contingency option
– Ideally a general business agreement (master service agreement in
place with 1-3 CMOs for each discipline that allow more rapid
initiation of projects if there is enough work for this type of
strategy.
• Be certain to plan appropriate lead-time for contract
negotiation, as this activity can take several months or more
65
Decision Matrix
Weight
Vendor 1
Vendor 2
Vendor 3
Vendor 4
0
0
0
0
0
0
0
0
Summary
Capacity
Overall Capability
Project Specific Technical Assessment
Quality
Cost
Other
Unweighted
Weighted
66
Contracting and Negotiations
•
•
•
•
•
The contract structure is a critical determinant of the balance of
leverage in a contract manufacturing relationship.
Negotiation is part of relationship management, and should be
considered part of the selection process, not a formality
Behavior demonstrated during negotiation of challenging aspects of the
contract is a good indication of how the other party will behave during
challenging points in the relationship.
Successful negotiation often depends on
– a clear understanding of each organization’s situation and needs
– shared objectives
– consistent messages from one organization to the other across all points of
contact
– mutual agreement and compliance that “official” communication and
decision making will be conducted through agreed upon processes and
point(s) of contact
Goodwill and trust are critical to productivity of inter-organizational
relationships.
– Often contentious negotiations are not contained and impact the project
team members perceptions of the other party.
67
Contract Structure
• Contract structure is a common source of conflict and
delay
– Often do not anticipate the future needs as the
project progresses
• Contracts established to support early development &
supply cover activities through the production and
delivery of the first GMP lot(s).
• Future clinical supply cost is often not addressed, even
though it will be needed if the project is successful,
risking hold-up
– Contract manufacturing is a very challenging and
often “lumpy” business, hence expect CMOs to
seek short-run profit maximization
68
Plan to Maintain Leverage
•
Future issues can be avoided by anticipating needs and building them into
contract terms
– Provision for future supply and/or additional projects
• Consider separation of development/CTM from commercial contracts to
facilitate negotiations and simplify earlier contracts
– The right of the client to all IP and know how required to produce the
product
• Rights to process and analytical methods and technology
• The right of the client to transfer the production technology and qualify
other sites to produce the product
– Payment obligations that are triggered by acceptance of deliverables (i.e.,
reports, QA release, etc.)
– Pricing terms that establish a common motivation
• Fixed pricing on each segment of the project as its scope becomes well
defined (i.e., both parties are motivated to complete the work in a
timely fashion)
• Bonus payments for development and demonstration of specific process
yields, which in turn tie to lower unit pricing for product supply
– Terms which delineate the obligations of the parties in terms of
communication and interactions, including arbitration
69
Master Services Agreement Concept
• The future needs of a project cannot be fully
anticipated at the outset of a project
• A “Master Services Agreement”, provides
flexibility
– General terms of the relationship between the
parties
– Scope of Segments of the project(s) can be
described,
– Can provide a basis for amendments combine
refined or new scope and already agreed pricing
structures
70
Managing Contracting Risk
Examples & Tips
71
Managing Contracting Risk
Costs
• Costs
– Risk of surprise should decrease as project
progresses
– A step past which cost increases can not be
passed on except for unforeseen and unavoidable
technical issues is not unreasonable
72
Managing Contracting Risk
Scope Change Orders
• Have specificity on how you will manage the SCO process
• Ensure that risk is not transferred to you where not warranted
and to avoid 11th hour hold-up
• Approval should be obtained for any scope change
– Be specific in order to make sure that you are not paying for
avoidable technical or other avoidable errors
• Deviation investigation and reports should not constitute a
scope change
• If vendor signals the possibility of required revisions to scope, or
need for unplanned process development work, consider having
that work charged on a transparent time and materials basis
with the ability to review and cancel on 30 days notice.
73
Managing Contracting Risks
Timing
Timing
• Carrot
– Concessions or incentives as a reward for on-time
delivery OR early delivery only if you realize a
benefit as well
• Stick
– Penalty fees in general are a common practice and
not unreasonable to include
– Acceptable high-end penalty fees for late delivery
would likely not exceed 25%-30% of processing
fees in the worst case
74
Managing Contracting Risk
People
• You may want specific vendor team members
identified if there are people that you deem
critical to success of the project.
• This can also be addressed to a degree
through the responsibility matrix showing
decision rights and responsibilities for various
decisions and actions.
75
Managing Contracting Risk
Termination
•
•
•
If vendor is fairly busy, the opportunity cost of their capacity is high.
Want to avoid situation where it may be possible for them to bump you and
then use “best efforts” to catch-up in a later slot and not be penalized.
Vendor will seek to reduce their risk in the event of non-delivery and reduce
their risk in the event of cancellation by you.
–
–
–
–
Penalty fees in general are a common practice and not unreasonable to include.
Can explore balancing trade-offs in acceptance of some level of termination fee
responsibility as a quid-pro-quo for their accepting some equitable penalties for nondelivery based on things that they should be able to anticipate or control to help
ensure alignment of incentives.
It is usually advisable, to avoid forcing payment of fees from a vendor
Identify a win-win which maximizes the outcome for you that can gain back time
•
•
•
•
•
If something fails, it is almost always faster to recoup at contractor than to start process over
with someone else.
Have the contractor provide raw materials for another batch
Have contractor bump someone else in order to slot your work ahead.
If vendor actions resulted in loss of batch, the vendor could be required to redo the batch at
their cost.
If vendor–attributable delays resulted in a significant timeline impact and caused you to have
work done at a different vendor, Raw Materials could be provided at the original Vendor’s
expense or the finished material could be provided for the cost of materials alone without
charging you the processing fee.
76
Managing Contracting Risk
Quality Agreement - Manufacturing
• Manufacturing
– Depending on specific observations or concerns, some client
companies like to make clear about what will NOT be
manufactured, processed, packaged or stored in the same facilities
• beta lactam and cephalosporin antibiotics, certain potent hormones,
cytotoxic compounds, highly potent drugs, biological preparations or
non pharmaceutical chemicals
• “shall make Client aware of the presence of any potentially hazardous
products. Mutual agreement is required between the two parties as to
adequate storage. Any regulatory restrictions regarding storage of
different types of products shall be adhered to.”
• Documentation and Review of Manufacturing Records
– Include right to have batch records sent to you on request.
– This complete documentation must be readily accessible for review
and inspection by XXXX and/or regulatory authorities upon
request.
77
Managing Contracting Risk
Quality Agreement - Sub-Contractors
• Sub Contractors
• Proof of Acceptability should be mutually
agreed to.
• The analytical vendors should be audited by
the contractor.
• The contractor should maintain audit records.
• If the contractor is using a vendor that has
not been audited before by the vendor
consider being involved in that audit process.
78
Managing Contracting Risk
Quality Agreements Control of Materials & Testing
• Control of Raw Materials
– Confirm process for handling Client supplied
materials
• Specifications and Testing Methodology
– It is not uncommon for Specifications to include
procedure to ensure mutual consent of changes
• Testing of PRODUCT
– Consider reserving the right to inspect and/or test
all batches of the subject product(s) produced
prior to release and distribution.
– This is not advisable as a matter of course but you
may not want to give up the right to do so.
79
Managing Contracting Risk
Quality Agreement - Retention Samples
• Confirm number of years for delivered products and
number of years for critical raws.
• 5 & 1 could be OK for a one-off development project
• If you expect to continue in the clinic or to make
more, the time should be longer.
• Including that the samples will be sent to you or to a
3rd party on request and sent to you after the
defined period.
• Consider doubling the amounts shown, in case you
want to consider a tech transfer to another facility or
other needs.
80
Managing Contracting Risk
Quality Agreement - Complains and Investigations
•
Complaints Handling
•
Failure to Meet Specifications - Investigations
– Advisable to specify turnaround time to receive oral and written results of
investigation. 30 days usually not unreasonable.
– Would be fair to commit to rapid ( 1 day ) turnaround for providing
complaint files to contractor if needed during FDA inspection.
– 24 hour turnaround is typically acceptable.
– A "Significant Deviation" is any out-of-specification result and/or any
manufacturing, packaging, labeling or testing deviation that may affect the
quality, safety or efficacy of the product(s).
• Reprocessing should always be considered a significant deviation.
• All deviations should be investigated and fully documented
• This documentation will be retained as part of the batch documentation for the
batch affected.
– You may wish to reserve the right to request additional or more in-depth
investigation of the deviation by the vendor when deemed necessary.
– Require approval in writing (fax confirmation is acceptable) for any
deviation impacting compendial status or regulatory filing.
81
Managing Contracting Risk
Quality Agreement - Roles & Responsibility List
• Should be discussed in detail, given resources
client has in place to manage the vendor
• Suggest that rather than simply an “X”, the
categories be changed to a choice of
Draft/Approve, Approve, Final Approval, and
Perform/Approve, Support.
82
Managing Execution & the Relationship
Risk Mitigation to Avoid delays
Enable speed and success
83
Execution & Managing the Relationship
• Success enablers:
– Well considered specificity
– Realistic expectations of timing
– Adequate internal resources
• Experienced management
• Sufficient manpower for vendor guidance oversight
– The right resources at the vendor
– Proactive management & metrics
– Sound Quality Agreement
Many of these factors are set long before kickoff and Much of it you can control
84
Don’t Expect Vendors to be Critical
• Don’t forget that CMOs are a service business
– They focus on doing what customers ask
– Don’t expect them to stop you from making
mistakes
• How many vendors want to build bad reputation for
telling their clients what the client needs?
– Will they stop you from making process changes
that affect impurity profiles?
It’s Your Development Plan
85
Adequate Internal Resources
• On-site involvement early in the relationship
– More time on-site up front, less time fixing things later
– Proactive vs. Reactive
– In-person builds relationship & personal commitment
• Staff for geography, distance & cultural issues
• Central Project management and information flow
– Be easy to do business with
– Do not impede scientist-to-scientist interaction when needed
There’s ROI to the Investment –
It Takes Resources BUT…It Enables Alignment
Efficiency
86
Internal Capabilities Checklist
Need enough internal knowledge / experience to support planning and oversight
API
 Small Molecule
 Custom chemical sourcing (starting
materials, intermediates)
 Preclinical supply
 API GMP manufacturing, Phase 1,2
 API GMP manufacturing, Phase 3,
Commercial
 Technologies required
 Biologics
 Preclinical supply
 API CMP manufacturing, Phase 1,2
 API GMP manufacturing, Phase 3,
commercial
 Technologies required
Drug Product
 Preformulation issues
 Solid dosage forms
 Parenteral dosage forms
 Drug delivery technologies
 Supplies
 Labeling, packaging and
distribution
 Analytical





Analytical Development/Validation
Analytical Operations
Stability
Small Molecule
Biologics
 Supplier management (including
document control and metrics)
 Negotiations and contracting
 Legal
 Materials management
87
Managing & Metrics
• Don’t always assume the vendor is motivated
to deliver
– But don’t assume they are not, either
• You are one of many clients
– Understand how they get their bonus
• Are they motivated to help you achieve your goals?
• Are other priorities greater than you?
• Key issue is when things go wrong and
whether you will get all that’s required when
needed to meet YOUR timeline
88
Managing for When Things Go Wrong
• CMOs do not have unlimited surge capacity
– Ability to add FTEs is limited.
• Sponsors with problems often assume that
– RM will be available when required
– There will be no significant technological hurdles
or unplanned experimental failures,
– CMOs have resources, capacity and schedule
availability to meet all needs exactly when
required.
89
One of the Largest Bottlenecks
• Caused by Sponsor underestimation of the
analytical rigor required to complete a filing.
• Successful sponsors consider the relevant
issues related to these factors even when
planning early stage supplies.
• As things change, the make new expectations
clear and “inspect what they expect”.
• In doing so, they keep metrics simple.
90
Metrics
• Keep metrics simple
• Don’t confuse “speed” with “on-time”
• Understand how your demands change as
you progress
– Consider impact on the vendor
• Put in the effort to be a good client
91
Summary
Outsourcing Workshop
IQPC
November 27, 2007
92
Summary
Successful Companies:
• Use a simple framework to understand relevant requirements
– In the context of company strategies and functionally integrated
drug development plans.
• Execute a well thought out Sourcing & Selection Process that
considers risks and the balance between CMOs and Sponsors.
• Effectively execute the program and proactively and relentlessly
manage the relationship with the CMO for mutual success.
• Recognize that risks need to be anticipated to be mitigated
• Strive to know what they don’t know
• They move forward with realistic expectations and appropriate
internal resources.
• Recognize that their CMO is not a “partner” but they exercise
“partner-like” good-will, mutual respect and professional
interaction.
93
Supplemental Information
Outsourcing Workshop
IQPC
November 27, 2007
94
Sources of Problems
•
•
•
•
•
Different rewards or competition
Under-defined roles and responsibilities
Different expectations
Lack of capacity (especially in analytical labs)
Plans and communication that are unclear or
inconsistent
• Lack of follow through on either side
• Poor execution/lack of competence
95
Key Steps to Avoiding Problems
• Strive to identify the motivations of both parties:
– Maintain shared objectives Or negotiate to transition out of
relationship if it’s clear that you can’t get there
• Maintain a long term perspective and appreciation for what is
best for your company
– Be prepared to invest time and teaching with a vendor if your
choices are limited
• Evaluate your team’s performance and be prepared to make
changes when a team member is not constructive
• Create clear communication process
– Timing,
– Approach
– Participants
• Ensure that you get and give candid, factual information
• Create an agreed to escalation / mediation mechanism
• Approach the relationship with mutual respect and
professionalism
96
Keep in Mind That…
• A single individual can negatively impact an
entire relationship
• It is difficult for a single individual to
turnaround a relationship that is not working
• You shouldn’t immediately assume mal-intent
if things can possibly be attributed to other
causes
• A little paranoia made Andy Grove a rich man
97
Keys to Success
•
•
•
•
•
•
Sourcing Strategy and Integrated Planning Framework
Understanding of potential risks in a CMO relationship
Strategies and tactics to prospectively mitigate these risks
Realistic expectations and appropriate internal resourcing
Diligent CMO assessment & selection
Contract Structure and Negotiation which balances the rewards
and leverage
• Project Management – Planning and maintenance of a detailed
project plans
• Proactive and Relentless Relationship Management
– “partner-like” good-will, mutual respect and professional
interaction
98
Put First Things First
• Strategic Framework / Outsourcing Strategy
• Integrated Development Planning
• Program Requirements
–
–
–
–
Development considerations
Clinical considerations
Commercial considerations,
Regulatory & filing strategy
• Project Requirements & Target Vendor Definition
– Confirm understanding of requirements
– Establish selection criteria
99
Project and Relationship Management
•
•
•
•
•
•
•
•
Resources Resources Resources
Many pharmaceutical companies outsource not only to reduce capital investment
and lead time, but also to access skill sets that they do not have internally.
One issue that is often overlooked is the role that skill set/technical knowledge
needed internally to effectively establish, manage and maintain credibility within
a CMO relationship.
It is important to ensure that the collective team in a contract manufacturing
relationship brings sufficient c technical, Quality/regulatory and business
knowledge to be able to make an independent assessment of data and decisions
Team representatives also need to be collaborative and effective communicators
and managers.
Some companies are relatively tolerant of employees who are outspoken and
individualistic. In an inter-organizational relationship, divergent opinions
expressed by members of the client’s team can create misunderstanding on the
part of the CMO, or worse, can be exploited by the CMO to weaken the client’s
position during negotiations.
Efficient and effective plan management is crucial to the success of contract
manufacturing relationships.
Plan development and management should be the client’s responsibility because
the client’s needs and objectives are the driving forces behind the plan.
100
Support Processes & Activities
• Your documentation system should include a production
performance database which tracks production lot success,
delivery performance (early, on time, late), and causes for lot
failures and delays.
• Make the team managing the contract manufacturing activities a
sub team to the central Client Project Teams;
– Incorporate the high level objectives and activities of the sub team
into the global Project Plans,
– Include reports and updates from the sub team in the agenda of
each Project Team meeting.
• Initiate technical and validation assessment of each Client
product to identify technical and validation gaps
• Establish a prioritized plan for the mitigation of those gaps.
101
Tips - General
•
Think/act win-win and manage leverage
•
Early and effective Tech Transfer most important driver of
effectiveness
–
Win-lose will not create value in long run
–
Tech Transfer package communicates credibility that process is
reproducible
–
–
–
–
–
•
•
•
Show supplier we are reducing risk for them too
Facilitates comparison of suppliers’ capabilities
Minimize “if/then” clauses in proposal
Limits suppliers’ need to build in “fat”
“Yes” may not mean good to work with; weak suppliers agree to anything
Structure the contract around the technology package and what you want
out of it; then remove wiggle words
Critical Elements:
•
Technology, Raw material specs & suppliers, Unit opps as practiced, Mass
Balances as complete as possible, At a min calorimetry for safety, General
safety and environmental, Analytical requirements, Proposed specs for API
Solid project management critical; spend time on training
102
Always Keep a Mirror Close at Hand
Problem escalation and disputes
are often symptoms of
poor
Project Definition & Statement of Work
and / or tech transfer package
103
Tips - General II
•
Maintain external reference points
– “How do you know if you are paying too much and moving as fast
as your competitors?
– Don’t become a self referencing entity compare to External
standards.”
•
Be a good customer
– Contractors hate scope change as much as sponsors. Many
projects look very different at middle or end than the beginning.
•
Be flexible
– Allow for idiosyncrasies of contractors.
– The more you force standardization, the more everything becomes
an exception process for the contractor
– Balance good process, controls and flexibility for best development
outcome.
– Development is technology dependent – it’s never smooth but it’s
manageable!
104
Tips – Selection & Contracting
• Be flexible in pre-selection.
– Don’t rule out a supplier if you don’t initially get the pricing you are
expecting
• Probe for signs of the vendors capacity utilization level
• Assure that supplier has critical scientific mass to support
problem-solving when things go wrong
• Don’t limit it to quality issues audit – look for all issues –
operational, organizational etc.
• Negotiating with one supplier compromises too much leverage
• Negotiating with one supplier risks re-work if things hit a wall.
• Avoid “Authorizations to Proceed” in lieu of signed contract. If
you have a good process, no reason for work to begin without a
signed contract
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Tips - Documentation
• Clear Ownership and Management of Documentation and
Change Control of Documentation
– To make sure you get compound AND development info from
contractors,
• Have documentation system for all contractors,
• Specify what you want and way you want it documented (beyond just
batch tickets) so that each time experiment is done and results edited,
you can get change control notice so you know what‘s most current
• Structure to set up “evergreen” development report, set up info needed
for PAI.
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Tips – Relationship & Program Management
• Track and document to manage scope changes and
information flow
• Have hard and fast rules for your change order
process and how it works for both sides.
• Mirror project managers on both sides
– Scientist talking to scientist should not be impeded.
• More time and cost is wasted fixing problems than if
one invested time up front
– First time you work with a contractor, they won’t know what
you want and you’ll do best to hold their hand.
– People usually want to do a good job so your chances of
things going right are a lot higher if you do things in person
initially vs. fax or e-mail
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Tips - Metrics
•
•
•
Keep it simple
–
–
–
It’s typical that a supplier does not deliver all that’s expected
–
–
–
Agree on site specific and product specific checklists.
Amount of time wasted going back forth to get data and info that was not
provided at the end of run is usually huge.
Agree on what and how long after completion of lot
Don’t assume pride of workmanship will motivate to achieve goals
–
–
•
Biggest mistake on metrics is to start out measuring too much
If they aren’t truly important at the beginning people forget lose interest
because intuitively they know the ROI is not there.
Keep it simple and meaningful
Understand the vendor’s internal metrics and ensure they are aligned with
yours.
Always ask yourself “are they motivated to achieve our goals?”
• It’s ultimately money, time and deliverables
Think about the metrics and standards you measure against
–
If the vendor is below budget but high for what you should be paying
• Is that good or bad?
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Tips Metrics II
• Don’t wait for metrics to show you what you can figure
out up front in supplier selection and contracting
• Metrics must be stage of development appropriate
• What you mean by Speed Quality & Cost changes across
the development cycle – make sure you think it through
• Speed not important if it does not buy you anything. ON
TIME can be more important if you’ve planned well
• Quality is Go no-go, black and white
• Ease of doing business – can you work with my systems
or do I have to adjust for your systems
• If flexibility means easy to work with, that’s OK. But don’t
expect the best suppliers to have excess slack to
accommodate weakness on your side
• Failure rates should be same as in-house – supplier
attributable failures need to be called out
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Vendor Selection and Contracting
Take action earlier to support tight timelines
Long-List to
Short List
Request For
Proposal (RFP)
• Execute CDA
• Draft workscope
• Request for
Information (RFI)
on capability
areas of interest
• Share desired
Terms &
Conditions
(T&C’s) and
Quality
Agreement (QA)
• Remote / Paper
Quality Audit
• Initial site /
technical visit
• Begin business
evaluation
• Establish
selection criteria
• External Input
• Capacity
• Performanc
e
• Establish
selection criteria
• Tech Transfer
package
Pre-Selection
• Technical
Assessment
• Preliminary
Quality review
and criteria for
Quality Audit
• Preliminary
negotiation
• Price
• T&C’s
• Quality
Agreement
• Capacity
• Performance
Supplier
Preferences
• Summarize
Ratings against
criteria
• Narrow down to 23 potential
suppliers
• Review with
internal
stakeholders
Quality Audit
Negotiation &
Contracting
• Identify potential
issues related to
Quality
Agreement
• Finalize
workscope
document
• Before or in
parallel with
Contracting
• QA OK – Internal
• Finalize price
Contracting
Finalization
• QA Sign-off
• Quality
Agreement
• PO/Final sign
off
• Kick-off
• Recommendation
and approval of at
least 2
• Final negotiations
and initial
contracting
• Contingency Plan
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Less Obvious /
Often Overlooked Sources of Risk
•
•
•
•
•
•
•
•
•
Lack of integration of DS & DP plans
Not having considered a registration strategy
Failure to definition of information needs
Process data, understanding and analytical needs
Timing and Quality of Tech Transfer package you
prepare
Not knowing scale-up and Tech Transfer needs
Unrealistic flexibility expectations
Unrealistic level of internal resources really needed
Lack of contingency planning
111