While the gradual shift towards virtual operations has been slowly marching onward since the invention of the Internet, it has become much more highly focused over the past two years since the pandemic caused this move to shift into high gear. The pharmaceutical industry in particular now finds itself in the midst of a move towards virtual global pharma, with many smaller pharma companies operating on a virtual basis, outsourcing main functions ranging from manufacturing to distribution and sales, and doing so on a global basis with an increasingly large network of contract manufacturing organizations (CMOs) in the U.S., and throughout the EU and Asia as well.

While launching operations with a CMO, or as is often the case multiple CMOs across multiple countries, foremost in mind is managing quality and building a comprehensive quality and compliance strategy. Managing quality in your own house may be straightforward, and even that is not without challenges—but how do you manage quality in someone else’s house? It can certainly be done, and it begins with the selection process and setting a range of selection requirements and minimum standards that each CMO must meet, in terms of quality, regulatory and compliance history. In so doing, the CMO’s past track record must be analyzed and a comprehensive audit performed, and candidates qualified before the RFQ is requested. This may involve the specific history of the plant, and any quality, regulatory or compliance issues they may have had in the past.

That initial review and quality audit should begin with a key checklist for quality, which would include things like the CMO’s regulatory history, history of agency approvals, a batch record review process and a history of manufacturing deviations and how they were handled.

Even with a stellar compliance record, there are other factors to take into account: is the product dosage form the CMO will be manufacturing for you, something they have experience with, and do they have the expertise that is specific to your request? Besides that, there’s the question of capacity, and how much priority you would expect the CMO to give your operation. What is their workload and their commitment to their other customers at the remote site, and is your operation large enough to warrant their undivided attention?

Even if your operation is smaller than what they are handling with other customers, there need not be compromises on quality, capacity or attention, and the first step to ensure that is to focus on building a high-quality relationship and ensure that you have a good relationship with a single point of contact communication structure. Getting the proper attention, and enforcing your quality standards, may be more challenging if you are a smaller customer, but with the proper relationship building and communications in place even the smallest company can have a highly successful relationship with a large CMO. To accompany the relationship building aspect of the partnership, the “small fish” issue can also be resolved with tactical items such as giving them a longer contract and/or a longer commitment on the production schedule, e.g., from 12 months to 24 months, which gives them more visibility into the future, therefore resulting in them valuing you more as a better customer despite your small size.

The initial contract can also be used as a tool to guarantee quality and should include items like a quality agreement, quality audits and periodic reviews. On the subject of the contract, of course it should be carefully worded and comprehensive. While a CMO will often have their own contract template, it will usually be written from their perspective, and a better option is to use your own template as the base agreement. Once the contract and quality and master agreements are agreed to and in place though, if a strong relationship exists, it will not be necessary to refer to those contracts often. If you have to refer to contract language on a frequent basis, you may have selected the wrong CMO or you may not have a strong enough relationship.

Quality also involves setting up a framework for successful management, with a lead person from each side managing the relationship on a single point of contact basis. This should also ideally involve setting up an automatic exchange of electronic quality data to avoid the errors and interpretations that are inherent to paper documents.

The past two years have changed the dynamic, not only accelerating CMO relationships and virtual global operations, but also changing the frequency of remote and virtual audits. The past two years have also given us proof that these virtual audits can work, and work well when structured properly. Together with communication, the right culture shared between you and the CMO, and the right set of quality parameters and expectations set out from the beginning, any organization of any size can have a highly successful virtual global operation with a network of CMOs. 

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Bill Connell is Principal, Supply Chain Practice Leader at Tunnell Consulting. He has more than 30 years of life sciences experience in the areas of supply chain strategy, planning and optimization, operational excellence, CMO selection/management and technology solutions such as ERP, product serialization and e-pedigree. His leadership skills and specialized insights have consistently delivered positive results, operational improvements and improved client profitability and performance. Bill can be reached at bill.connell@tunnellconsulting.com.