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Contractor Do’s and Don’ts

How to handle bio-outsourcing

By: George F.

Pharmaceutical Consultant
Congratulations! Your CMO has just been awarded a project for a biopharmaceutical company. The project could be the production of a therapeutic substance itself (chemical or biological) or the finished dosage form. The product could be for clinical trials or could be a marketed product.

This article will help familiarize your firm with the workings of biopharmaceutical companies and their projects. You will probably find their ways different than those of large, ethical pharmaceutical companies (Big Pharma) or generic pharmaceutical companies. Although the following is not meant to be a comprehensive guide for biopharma projects, the guidance offered below will help your CMO complete the project successfully.

These lessons are based on many years of both good and bad experiences with CMOs servicing the biopharmaceutical industry. Some CMOs were not well prepared to work with a biopharma company; others were. A few bad experiences forced me to add “continually declining customer service” to life’s only other certainties: death and taxes. The ensuing “Do’s and Don’t’s” represent the most common and worst mistakes that CMOs have made in my past experiences.


Changes, Changes
Generally, the first difference to expect with a biopharma company is more changes. The reasons for this are twofold. First, biopharma therapeutic products often involve paradigm shifts from standard therapies. A check of a leading biopharma website (biospace.com) confirms this sentiment. For instance, there are couple of oral versions of insulin currently under development, as well as inhaled versions. A vaccine for prostate cancer is presently in clinical trials. These represent new concepts in dosing a therapeutic agent or treating a disease. During the approval process between clinical trials, it is highly probable that the FDA will have “more issues” with these therapies than, say, a new chemical entity for the treatment of hypertension. More issues will mean more changes. Therefore, a biopharma project is by nature not as well defined as outsourcing of an existing marketed dosage form.

Second, a biopharmaceutical firm usually does not have as well established a corporate system as those seen in Big Pharma or at generic houses. These types of companies represent mature market sectors with corporate life spans measured in decades. Many biopharma companies are not even 10 years old, and the industry is likely still expanding rapidly. Therefore, a Biopharm company’s corporate structure is still evolving. On the positive side, it will mean faster responses and approvals; there are less layers of management to go through. On the negative side, more changes can lead to cost overruns.


DO expect more changes than other projects—be flexible and understanding.
DO have a system in place to control changes to the project budget.


The Audit
Usually, during the later stages of the bidding process or immediately after contract award, the biopharma company (your client) will conduct an audit of your facility.

DO have all key people available during the audit.
DO have all manufacturing, laboratory and warehouse areas prepared and available for auditing.
DO take notes during the audit.
DO provide the auditors with the documentation they request during the audit, especially a “sanitized” copy of your most recent 483 and your response.

It is not standard practice to provide client auditors with documents such as SOPs or cleaning procedures. These are your proprietary documents and should be protected. Therefore the client should be allowed to review but not copy these documents during the audit. It is standard practice to furnish the auditors with indices or lists of such documents, e.g. an SOP index.

Obviously, the client will assess your firm’s capabilities during the audit. It is best to evaluate your staffing and capabilities prior to the start of the audit. If you are understaffed, look at hiring new people. It is also your chance to assess the client’s capabilities and limitations. This could lead to more business opportunities. For instance, if conversations with the auditors indicate that the client has limited staffing in its Regulatory Affairs department, you could offer the services of your Regulatory people to help support future FDA filings that the client expects to make.

In my experience, the CMO’s response during and after the audit sets the tone for future relationships. Not performing basic functions during the audit, such as taking notes, gives the impression that your firm does not care, even though the client’s audit report will summarize all findings. A slow or recalcitrant response to the audit report will indicate to the client probable trouble somewhere down the line.


DO respond quickly and cooperatively to the client’s audit report.
DO accept and correct client audit observations.
DON’T refuse to correct an observation. Instead, offer alternative solutions.

Accept audit observations even if correcting it means additional expenses. If you find an audit observation exceptionally objectionable or very expensive to correct, offer alternative solutions to the client. Offering an alternative for an audit observation correction may, in fact, impress the client more than correcting it the way they expected. It is possible that your alternative may be better and/or cheaper than what the client anticipated. Look for such solutions, as they will enhance your reputation with prospective customers.

Customer audits may be more rigorous and detailed than even an FDA audit. Biopharma employees will be extremely protective of their project. Usually, the success of the company is riding on it. This is why you will be audited in a very pedantic manner. Clients must be certain your company’s operations will not result in a 483 or other critical regulatory endangerments. Therefore, expect a prospective client to have more observations on seemingly smaller details. But, in the long run, if a client or prospective client’s audits help avoid a 483 for their work, then your company also avoids the citation. The exchange of knowledge that occurs during an audit may also assist your firm in avoiding a 483 for other projects in-house.

Also keep in mind the reason why a biopharma company outsources: it absolutely needs a CMO. Most biopharma companies do not have their own manufacturing facility because they are newer companies and not yet showing a profit. Unlike Big Pharma, which outsources to reduce cost, most biopharma companies must outsource. As a CMO, if you control all of a biopharma company’s clinical supplies manufacturing or, perhaps their only commercial product, I believe you can understand why their personnel would be so protective of their projects.


“Premanufacturing” Phase
I define the interval between the end of the audit and the start of manufacturing as the “Premanufacturing” phase of the project. Contract award will occur during this interval, if it was not awarded previously. The manufacturing and quality contracts may also be negotiated during the Premanufacturing phase. If the above are already in place, a lull may occur. It is important to put this lull to good use.

DO assign a qualified project manager during this time.

By qualified, I mean a person with a related technical degree and at least several years’ experience in pharmaceutical manufacturing or quality control. The assigned project manager is to be the primary contact person for the client. All client contact should flow through this person.

DON’T assign a clerk or secretary as a “project manager.”

The transfer of any analytical methods from the client should be started, if applicable. It is critical that their methods be transferred, at the latest, in time to release the product immediately after it is manufactured. Of course, it is preferable to have them in place before the start of production. It will be necessary to transfer any methods used in-process testing prior to the start of production.

DO begin the transfer and/or development of analytical methods as soon as possible after contract award.

DON’T delay in commenting on or signing off on client transfer protocols.

DO make certain adequate staff is available to

transfer the analytical methods.

A delay in the start of manufacturing most often occurs because of late transfer of analytical methods.

During Premanufacturing, request copies of the client’s raw material, excipient and product specifications. You will probably find that the client only has a specification for their product. Raw materials and/or excipient specifications will be poorly, if at all, defined. Usually, the client relies on the CMO for its expertise on specifications. Occasionally though, a client may have specifications or limited requirements for such ingredients.

DO adopt any client requirements to your raw material or excipient specifications.


Manufacturing
Now you have entered the manufacturing phase of the project.

DO expect a client presence at your site.
DO allow client personnel complete access to the manufacturing and laboratory areas to be utilized for the duration of their project.

If access is not granted to the laboratory and manufacturing areas, the client may believe you’re hiding something. If your company standards call for all visitors to be escorted, then have an escort available at all times for the client whenever he or she is on-site.

Make sure a private, comfortable office with a door is available for client use. The office should have at least a telephone and preferably a fax and computer with internet access.

DON’T put clients in cubicles.

DON’T use a lunchroom or offices of people absent or on vacation to house clients during their stay at your facility.

While on-site client employees may seem young or inexperienced because of the smaller size of their corporation, they may be privy to confidential and highly significant information. As large changes in a biopharma company’s stock price may occur after the results of clinical trials are known, it is important that a private office be available for their use. I call this “the care and feeding” of clients.

If you are fortunate and competitive enough to follow a drug development project from Phase I to Phase II and then Phase III, expect some staffing changes and improving level of expertise within the client’s organization. Approval of a therapeutic substance through the three phases of clinical trials will probably mean increasing stock price for your client’s corporation and a growing reputation in the biopharmaceutical industry.

The client will need to raise capital to fund the increasing costs as the therapeutic substance proceeds through development. It will do this by selling more stock, obtaining funding through private venture capital, or through partnerships with other corporations (oftentimes Big Pharma). Most likely, they will hire additional technical staff to supervise the increasing complexity as the project proceeds from Phase I through Phase III. Your organization may have less autonomy on the project as time progresses. It may appear that you are losing ownership. The client’s expertise will then drive development of the therapeutic substance or product.

DO be understanding and flexible during these transition periods. Remember the client owns the project and it is your company that is working for the client.

The more work your corporation performs for a particular client, the higher the likelihood of an error being made. Errors in manufacturing or release testing will eventually occur. Many times such errors can result in a “crisis situation,” delaying the clinical trial or placing a critical product on backorder.

DO report batch or laboratory errors promptly to the client.
DO accept accountability for your mistakes.
DON’T blame your client, their manufacturing process, or analytical methods for your errors if you have accepted them without comment.
DO issue investigation reports as quickly as possible.

While most clients realize that significant errors will eventually be made, it is important to get through the crisis as quickly as possible.

DO always take preventative actions to keep critical errors from recurring.

After a critical error has occurred, there is nothing like support and action from your upper management. Therefore:

DO provide clients access to your upper management.

It is important for a client to always feel that he or she has access to your upper management, even when a crisis is not occurring. However, it is especially significant to provide contact with upper management during the later part of the project. During this time, most of the work (and therefore most of the client’s cash flow) is over. As the project winds down, it is the best time for upper management to review the work with the customer. Such a review makes the client feel that he or she has not been forgotten and gives your firm a chance to re-examine the project and the lessons learned from it.

Upon review of the above, I was somewhat surprised that my observations were not more directly related to manufacturing. In other words, I didn’t have comments such as “DO be sure to issue Master Batch Records for client comments promptly” or “DO make certain that your SOPs are followed.” This possibly indicates that most CMOs are good at the actual “manufacturing” part of their jobs. It is the related areas where clients usually need to focus their attention.


After Project Completion
DO provide executed and audited batch records promptly after batch release.

As a suggestion, also provide raw material and/or excipient Certificates of Analysis (C of A) and laboratory data (including HPLC traces) along with the product C of A.

The end of a manufacturing project for a biopharma company may not be the end of your relationship. If the project went well, seek out more work from that customer.

DO stay in touch with clients.
DO keep clients, potential clients and former clients informed of the installation of new equipment or modifications to existing equipment that they might have interest in. E-mail is ideal for such a purpose.


Some Final Words for CMOs and Clients
Flexibility is the key for performing well on a biomanufacturing project. I have found that small- to medium-sized firms tend to be more flexible. I believe smaller size makes management intrinsically easier. Plus, in a smaller CMO, people may “wear many hats.” For instance, in a smaller firm that I worked with, one department handled both bulk dosage form manufacturing and packaging. In a bigger company, separate departments (with their attendant bureaucracies) would usually handle these functions. This “smaller company phenomena” tends to, in my opinion, make employees of such organizations more flexible.

Smaller firms are also usually privately held, many times by an individual or a family. Such management can lead to more accountability among employees because they know the owners personally. The owners often use this to their advantage by generously recognizing good employee performance.

This doesn’t mean that a large firm can’t do a good job on a biopharma project. They can. For a biopharma company, the best way to judge flexibility is by the CMO’s behavior during the formal GMP audit and its response to the audit. Therefore, view the GMP audit as part of the bidding process. Don’t award the project until after audit completion and receipt of an audit response.


Reference:
“Preparing Requests for Quotations for Commercial Pharmaceutical Manufacturing,” Pharmaceutical Technology Outsourcing Resources Supplement Vol. 25, No.8 p. 18-26 August 2001.

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