Kevin Cook is the chief executive officer of Sterling Pharma Solutions and is responsible for strategically ensuring compliance, growth and profitability for the UK-based contract development and manufacturing organization (CDMO). He has over 30 years’ experience in the pharmaceutical industry, having worked at a number of CDMOs before joining Sterling in 1993. In January 2014, Kevin was appointed as president and in 2016, he led the business through a management buy-out (MBO) to form Sterling Pharma Solutions, which is now the largest independent API CDMO in the UK. He spoke with Contract Pharma recently about building and maintaining successful partnerships with sponsors in the outsourcing space.

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Contract Pharma: How have outsourcing relationships evolved over the last ten years?
Kevin Cook: The key change across the API outsourcing space has been the notable shift from tactically outsourcing on a project basis to developing long-term strategic partnerships with contract providers. Often this is to access specialist expertise that pharmaceutical companies may not possess in-house, for example manufacturing potent APIs or processing highly hazardous chemistry or handling hazardous materials. Outsourcing to CDMOs that specialize in these areas can generate huge time and cost savings for sponsors.

Strategically outsourcing to experienced partners can also help to ensure compliance with increasingly stringent quality, safety and environmental standards. Over the last few years, API manufacturers in the east have come under scrutiny due to quality concerns and many pharmaceutical companies are choosing to move the manufacture of their products back to the west. The economic benefit of using an eastern supplier is also less beneficial due to the increased cost base of these emerging markets.

Finally, the shift from tactical to strategic outsourcing is driving the demand for service providers that can offer a range of capabilities, meaning full-service CDMOs are becoming a popular choice. The full-service model is being driven further by the growth in the emerging and virtual pharmaceutical sector as these companies have little or no in-house manufacturing capabilities.

CP: In your opinion, what does it take to maintain an effective sponsor—partner relationship?
Cook: It’s a given that ensuring continuous supply in a cost effective and timely manner will help to ensure a strong relationship between CDMOs and their customers. However, the true differentiator for contract partners is the ability to provide a flexible and tailored service and ultimately be easy to do business with. This is very easy to say and most companies in this space talk about the importance and value of these traits. However, this only comes with experience and the build-up of a company culture over many years of service delivery.

CP: What should pharmaceutical companies be considering when choosing an outsourced partner?
Cook: It’s important that your CDMO has the right capabilities and expertise to cater for your requirements, but companies should also look beyond the service offering when selecting and outsourcing partner. Beyond its equipment and chemistry capabilities, your CDMO should express a genuine interest in your business in order to fully understand the scope of the project. A comprehensive understanding of a customer’s key objectives is invaluable when overcoming any challenges during the development and manufacturing process. By selecting a contract partner who is willing to invest the time into developing a comprehensive understanding, you’ll be able to streamline project timelines and avoid costly mistakes.

CP: In which areas of drug development and manufacturing are you seeing the greatest demand for outsourcing?
Cook: The pharmaceutical landscape has changed quite extensively over the last decade. We have seen the number of virtual pharmaceutical companies, with little or no in-house manufacturing capacity, increase and many emerging pharmaceutical companies operating in the clinical development phase choosing to outsource their manufacturing requirements. This trend is driving the demand for contract service providers with scalable manufacturing capabilities, as well as encouraging companies to develop long-term partnerships with their CDMOs.

CP: How do you see the future of outsourcing and what will the impact be on current sponsor—partner relationships?
Cook: The wider picture is that the market will continue to grow, a recent report by Market.Biz on the global pharmaceutical contract manufacturing market suggested the sector will grow from around $60.91 billion in 2016 to an estimated $89.80 billion in 2022.

More specifically, consolidation has been a prominent trend in the pharmaceutical contract manufacturing industry and will remain so going forward. Bigger players are acquiring smaller, niche service providers in order to broaden their service offering. This consolidation across the CDMO landscape is seeing companies opt for a more strategic outsourcing model, using supply partners that can cater a broader range of requirements.

This shift towards strategic outsourcing is being further driven by the growth in the emerging and virtual pharma sectors, as well as an increasing number of big pharma companies choosing to significantly reduce their internal manufacturing in order to focus on their drug development and sales and marketing efforts. As a result, pharmaceutical companies are looking to develop long-term partnerships with CDMOs they can trust to meet their long-term requirements.