Pharmaceutical Processing: What specific qualities do pharmaceutical companies look for in a contract manufacturer?
David Downey, VP Commercial Operations, ALMAC: Ease of engagement is a key quality to any sponsor to contractor relationship. We at Almac are here to make our client’s lives as simple and straightforward as possible, with our level of repeat business testimony to this approach. Technical knowledge and process experience, with expectations and responsibilities clearly communicated and planned, are vital for both parties and will determine the success of any engagement.
Milton Boyer, President, OsoBio BioPharmaceutical Manufacturing: The specific quality is “fit.” Fit has many definitions and permutations as each company and/or project is unique. Quality is of paramount importance, but the CMO and Drug Sponsor need to have complimentary quality systems. Next would be capabilities, then speed or timing. Finally price, far too often, is the ultimate deciding factor.
Elliott Berger, VP Global Marketing & Strategy, Catalent
We believe that there are two principal drivers in the selection process. Firstly, whether the outsourcing partner can genuinely add value in terms of experience, expertise, capabilities and technologies. In Catalent’s case, we have invested $1B over the last five years and continue to invest $100MM in capital ever year to broaden our capabilities, enhance global capacity, add new drug delivery technologies and differentiate our offer.
Secondly, pharma companies are looking for quality and reliability from their outsourcing partner. Catalent has established a world-class manufacturing and supply network with rigorous cGMP, EHS, security and operational controls implemented throughout. We currently supply 70 billion doses and 240,000 shipments annually to over 80 countries and our inspection outcomes are three times better better than the industry average. Our quality systems and regulatory expertise ensure that we are accredited by over 30 global agencies.
Pharmaceutical Processing: Is there a trend towards specialization or diversification amongst contract manufacturers? Are sponsors looking for a “one stop shop” for all their needs?
Downey: Historically this has often been determined by the size of the sponsor. Smaller clients have less human resources to dedicate to managing multiple outsourcers, hence, the real value in utilizing a “one stop shop” provider. Previously larger clients have often had access to a wide range of their own internal resources so could more easily select and manage services from multiple providers. However presently the trend is toward strategic engagements, leveraging as many services as possible from one provider. The breadth of services within Almac lends itself to this trend.
Boyer: Yes. The M&A activity suggests several companies are building a broad range of services to offer within one portfolio. Examples are CML/AAI Pharma, Confab and DPT, Aenova and Haupt, etc.
Berger: The answer is both! Some companies are choosing to focus on specialization to really help provide valuable solutions to pharma partners for better products and better supply with expertise and technology. Others are putting together a broad array of services to capitalize on the consolidation of supplier bases by big pharma and consolidation in the pharma industry as a whole. We feel that Catalent is unique in its scale and ability to do both. We specialize in several major areas and are able to provide unique drug development, delivery technology and supply solutions at large scale in many different fields. These include complex oral dose form development, technology and supply, biologics development and clinical solutions, clinical supply services worldwide and other specialized areas. Catalent is also unique in the field in providing global regulatory services to our clients to support their product development and global commercialization needs. Clients are seeking a CMO that identify and solve problems to help ensure that client projects stay on track and on budget. This allows us to partner on large scale with nearly all top innovative biotechs and biopharmaceuticals, as well as generic companies.
Pharmaceutical Processing: Do you feel the pace of pharmaceutical outsourcing will continue at its current rate? Will it increase or decrease?
Downey: You only have to read the pharmaceutical headlines each day on how pharmaceutical companies are restructuring and that the emerging and biotech sectors are tightly controlling their fixed costs, to know the outsourcing trend will continue. Why build or maintain facilities when you can outsource to an expert service provider and have flexibility on how you manage your assets?
Boyer: All signs point toward continued growth in outsourcing for the foreseeable future.
Berger: We believe the rate will only increase, given the increasingly complex development challenges and the need for partnering and collaborative innovation to overcome them, pharma’s focus on drug development and marketing, international pressure for local sourcing and other contributory factors.
Pharmaceutical Processing: Has the globalization and consolidation of the pharmaceutical industry helped contract manufacturers get business they might not have in the past?
Downey: I don’t believe so. Consolidation will always provide opportunities for contract manufacturers but I don’t consider either it or globalization has radically impacted the “type” of outsourced requirement. That said globalization has opened markets up that previously were not internally serviced by contract manufacturers. Key drivers to increased outsourcing have come from the biopharma industry looking at and changing their business models.
Boyer: Absolutely. The M&A activity has created organizations that seemingly are more willing to outsource manufacturing.
Berger: In Catalent’s case, certainly, as it leverages our strengths in global manufacturing and development network that many of our customers or competitors do not have as well as in customers’ desire to do more business with a smaller number of reliable global partners with broad expertise.
Pharmaceutical Processing: Are you aware of any proposed FDA or international regulations that might affect the pharmaceutical contract manufacturing industry?
Downey: Specifically, serialization has the potential to significantly impact the whole pharmaceutical supply chain, from the patient right back to the manufacturer. Almac recognized this a number of years ago and built its own offline serialization solution in its UK operations. However with different countries likely specifying different requirements, the situation may become even more confused than it already is. Generally there are a number of guidance positions being outlined that could impact the industry such as ICH Q3 on metal impurities and the EMA’s guidance on the requirement/definition of dedicated facilities. Our philosophy at Almac is to plan for as many eventualities as possible and ensure a proactive approach is taken to make life simpler for our clients.
Boyer: The FDA’s recent Draft Guidance on CMO Quality Agreements is still being interpreted. While there is not a specific requirement for such quality agreements, the FDA has issued 483s and even warning letters where the responsibilities between CMO and Drug Sponsor were not clear and led to issues of non-compliance.
It is also unclear what the final requirements for serialization will be and at what level (for example, individual dose or bulk packaging) the CMO will be responsible. The industry does not appear to be ready for serialization at the dose level by 2015
Berger: Regulations are changing daily, affecting our industry in multiple ways in multiple markets. Recent GDUFA regulations in the US have made an impact, as have recent initiatives regarding Quality Agreements. Catalent has a dedicated Regulatory Services group, offering both regulatory strategy and operational excellence, working closely with over 30 global agencies for our clients.. This is essential as we write and publish over 120 regulatory submissions on our customers behalf globally every year. We also assist clients with over 20 meetings with the Health Authorities every year for innovative drugs, biologics, devices and combination products.
Pharmaceutical Processing: What do you see as the future of pharmaceutical manufacturing in the next 5 to 10 years?
Downey: That’s a big question. From a high level, generally dosages are lower, potency is higher and complexity of the active molecule has increased. This will require specialist knowledge and capabilities in processes involving, for example, protein manufacture; contained & controlled processing; proprietary catalyst technology etc.
Greater focus on targeted therapies/personalized medicines, with an increase in the use of companion diagnostic tests will impact the needs our clients expect CMOs to service. It is therefore essential we remain flexible and innovative to support these changing needs into the future.
Boyer: There will likely be a variety of models from completely virtual to traditional vertically integrated manufacturing. There are too many factors to answer in a few sentences, but all trends still suggest a bright future for outsourcing providers.
Berger: We believe that pharma companies will continue to look for partners that have differentiating technologies, expertise to solve development and regulatory challenges, and a reliable global supply chain that can enable them to bring better treatments to market faster.