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Workshop C: Tools for a Successful Outsourcing Program

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1 Workshop C: Tools for a Successful Outsourcing Program
Paul Woitach Managing Partner Pharmaceutical Advisors LLC 316 Wall Street, Research Park Princeton, NJ 08540 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

2 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
Workshop Approach Management perspective Not a development planning discussion per se Assume you know what to do BUT some insights Checklists and tools Tips and suggestions Assuming all can read so will speak to the key points rather than discuss every bullet Geared for first GMP but applicable to all stages and commercial Structured to leverage the experience of CMOs and Sponsors in the workshop Discussion, Debate & Reconciliation / Group hugs Help you to walk away with a robust package Using term CMO and Vendor interchangeably – can often apply to packaging, analytical etc. IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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Agenda Case study examples and tools for developing an outsourcing program, whether it’s a single compound or you need more structure to managing multiple programs Understanding how to find CMOs, contract with them, and maintain leverage and look after your interests in structuring the business and technical relationship How to be a good business client for speed and value Anticipate and handle specific problems with outsourcing Case Studies - Bumps in the road that others have had and what you can learn from them Tips on running programs with a limited internal budget and resources IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

4 If You Are Just Starting to Outsource…
Nomination PhI PhII PhIII NDA/MAA Approval Evolving API… & Drug Product… Demand API/DP Launch Enabling Technology & Supply Manufacturer API/DP Technology/Supplies RM API DP PhIII Supplies DP Technology API Technology RM API DP Launch Planning RM DP DP Stability API PAIn Planning RM API DP ICH Stability ICH DP Stability Planning Raw Materials API Activities DP Activities Enabling Demand IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

5 Lead Times and Need to Be Prepared
If you are starting to outsource manufacture of DS or DP Lead times can be 3-6 months to ID and secure CMOs for CTM or more Can be longer for commercial Many factors can add up / compound the issue Screening / ID CMOs true capabilities takes time CDAs can take time 2-4 weeks to prepare a good response to RFP Timing of scheduling site visits and audits depends on working around existing client schedules No two CMOs are exactly alike Sometimes technologies / unit opps are not ubiquitous or all in the same location The CMO you want may not be interested or feel comfortable with your project Negotiations & Contracting iterations Seasonal factors can stretch lead times further IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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Tools on The Checklist Descriptions and Tips IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

7 Tools - Outsourcing Checklist for Success
Item Comments Integrated Development Plan Core Enabler – Always changes but think it through before you start to write RFP The Right SOPs Core Enabler some before RFP, others in time for GMP Data Plan Core Enabler - think it through before you write RFP Resources to Manage Core Enabler - before you start to write RFP Process for Selection Core Enabler – now you have one Know Your Requirements Varies by project but aim to not change after the RFP Finding CMO Candidates Varies by Project Selection Criteria RFP Template Varies by Project – now you have one Contracting / Ts & Cs Be prepared to integrate your needs with CMO’s Quality Agreement IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

8 1. Integrated Development Plans
You’d be amazed at how infrequently we see them! Integrate DS & DP at the very least Tox and clinical timelines and quantities are important for your planning Create a strawman assumptions if you cant get answers Consider impact on today’s and tomorrow’s needs of Approval & Investment Strategy Development Plan beyond IND Factor in Lead times CMO selection & contracting Product release across CMOs and report turnaround times Experimental failures Not Doing it is a huge source of problems Beware of oversimplified plans / rules of thumb Make communication across functions happen! Even if its just with yourself! IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

9 Symptoms of a Planning Gap to be Filled
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 need a Quality Manual? But We’re virtual…” “It’s too early to be thinking about a Quality Agreement – it’s just development work…” IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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2. The Right SOPs Not a thick binder but a few enabling tools Leverage Contractors Quality System & SOPs Minimal core internal Policies and SOPs to enable running through contractors Can also invest proactively in your Quality Agreement Template and Roles & Responsibilities Matrix to reduce need for certain SOP detail Important to understand what you need in place before contracting and before GMP activity It’s still your product with your responsibilities IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

11 Pre-Outsourcing SOP Gap Analysis
Leveraging the Contractors SOPs in Your SOPs Area for Policies and/or Procedures Now Soon Later Approach Quality Unit Responsibilities SOP Modify existing or create new Auditing Batch Disposition Pol/SOP Buildings and Facilities Pol Use contractors’ SOPs Change Control Complaint Handling X Contractors - Approval of GXP Contractors & Consultants Corrective and Preventive Actions Deviations Documentation Creation, Mods & Control Equipment Labeling Control Laboratory Control Management & Employee Quality Responsibilities Materials Management & Purchasing Control Packaging, Labeling, Storage, Shipping and Distribution Production and Process Controls Qualification and Validation Recalls and Product Withdrawals Records and Records Retention Returned and Salvaged Goods Specifications Stability Training Example IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

12 Pre-Outsourcing SOP Gap Analysis
Leveraging Your Quality Agreement Area for Policies and/or Procedures Now Soon Later Approach Quality Unit Responsibilities SOP Modify existing or create new Auditing Batch Disposition Quality Agreement. Create SOP Buildings and Facilities Pol Use contractors’ SOPs Change Control Pol/ SOP Quality Agreement Complaint Handling X Contractors - Approval of GXP Contractors & Consultants Corrective and Preventive Actions Deviations Documentation Creation, Mods & Control Equipment Labeling Control Laboratory Control Management & Employee Quality Responsibilities Materials Management & Purchasing Control Packaging, Labeling, Storage, Shipping and Distribution Production and Process Controls Qualification and Validation Recalls and Product Withdrawals Records and Records Retention Returned and Salvaged Goods Specifications Stability Pol /SOP Training Example IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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3. Data Plan You are not just buying supply, you are buying Material Technology & Other IP Registration Enabling Information Understand data needed for submission, to make decisions and to achieve objectives with future partners or for your commercial objectives Where will it come from Who will write what In what form do you need Implications for your RFP / Requirements How will you file and access the info IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

14 Often Overlooked Data Consideration
Development Reports Deliverable of 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 process and analytical procedures evolved into a manufacturing process and quality control test methods Enable learning / problem solving & QBD for registration IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

15 4. Internal Resources -Small Molecule
Internal expertise needed: Medchem Process chemistry & API Manufacturing Dosage form Development Dosage form manufacturing Pharm Tox Legal Analytical Quality Packaging CTM logistics TPL Management Sourcing Regulatory Project Management IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

16 4. Internal Resources - Biologics
Internal expertise needed: Bulk - Cell line development & selection, Fermentation, DSP Dosage form Development Lyophilization Dosage form manufacturing Pharm Tox Legal Analytical Quality Packaging CTM logistics including cold chain TPL Management Sourcing Regulatory Project Management IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

17 5. Structured Process for Selection
Strategic Context Integrated Development Plans Sourcing & Selection Process Relationship & Project Management Kick-off & Tech Transfer Proactive Management Leverage and Alignment Company Needs Resources Timing Program Requirements Project Requirements Internal issues Long list of candidates Short list Finalists and selected CMO Boundaries Clinical & Safety Requirements & CMO ID Investment Strategy Action Plan & Key Indicators of Success Drug Substance & Drug Product Screening RFP & Selection Strategic Skills For those who like to view things left-to-right… Regulatory and other Negotiation Contracting & Scope Approval & Regulatory IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

18 Overall Sourcing & Selection Process Table
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 Project requirements Establish selection criteria 4 CMO 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 Possible Site Visits 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 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 Sign-Off PO/Final sign off 9 Kick-off Tech Transfer IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

19 6. Your Requirements – Some Variables
Program Specific Considerations Development Strategy Approval Strategy Investment Strategy Tactics Post-IND or Launch To Approval To POC To IND Other Fast Track / Accelerated Standard Staged Invest at-risk early to move faster later Postpone Investment in technology & info Need for material – small or large Need for non-GMP & GMP Lead Times COGS reduction Program AND Project Specific Considerations Technical Difficulty Technology Needs / Issues Approach to CMOs Skills internal Skills needed Timing Risk Handling ( potent, energetic, low-dose ) Is technology suitable for use or is more development required? IP - Any freedom to operate issues Need to access or remove IP to succeed? Chance for Multiple projects or one-off Common Technologies Unique technologies Location issues IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

20 Technical Package and Tech Transfer
Drug Substance Technology Raw Material specs & vendors Unit Operations as practiced PD History, if any Batch Manufacturing History Current IPCs at R&D stage, rationale and CPPs Storage requirements for raws, in process and final product Mass Balance as complete as possible EH&S info; Process Risks and Controls – incl waste streams, MSDS Analytical Requirements Dev Reports, Methods protocols, tech trans plans, & validation reports, if ready Proposed specs for API Batch size assumptions – CTM, Reg batch, validation batch, commercial and projected forecast Drug Product API and Excipient grades & suppliers Batch Mfg. History Specs for API and excipients incl micro Excipient functionality EH&S info, risks, incl waste streams, Detailed characterization PD History Report Current IPCs and rationale and CPPs MBR & , ancillary batch docs Storage for raws, wip & final product Dev. Reports, Methods protocols, tech trans plans, & validation reports, if ready Stability information (API, intermediates and final product) Cleaning procedures and tests: operator exposure, disposal etc. Packaging Batch size assumptions – CTM, Reg batch, validation batch, commercial and projected forecast IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

21 7. Finding CMO Candidates
Quickly Getting Some Material Made…It’s just kit & people right? Don’t assume one stop shops actually exist Tech transfer has to happen across scale anyway DP & DS are different disciplines Technical specialization needs Skills & Creativity across disciplines Service oriented culture Right business model, business size (to align with you) Capital structure / health Location Very few direct capability overlays in comparing CMOs And the golf course issue… Plan on 3-6 months for development and potentially longer for commercial IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

22 Tips for Making it Easier
Start with your requirements… For this project and the follow-on…if you are successful Create a Long List Capabilities & specialties Capacity Location Reputation Information Resources Your functional team members / consultants Peers Industry directories i.e. Contract Pharma Trade-Shows & Conferences AAPS, Informex, Interphex, Chemspec, CPhI, Contract Pharma, DCAT IQPC, etc. Create and maintain a “living list” IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

23 “Living” List of Potential Vendors is an Asset
Document and refresh findings on candidates 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. A strategic asset This knowledge often “walks out the door” when employees or key consultants move on IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

24 8. Criteria – Often Overlooked
Capacity / Scale Stage now vs. later needs and implications Overall Capability Tech Transfer ( in and out) Experience updating the CMC sections Understand ability to source of all raw materials Project Specific Technical Capability For development, unique technical deliverables and their “transportability” Response to RFP and scientific approach Quality Capabilities / FDA inspections or approvals Import / export processes of material for CTM & Commercial Strength of their Vendor Qualification Program Location Your capacity to manage distance and cultural issues Internal tech transfer capability across locations. Proprietary technology/tech transfer Does CMO propose to use proprietary technology and what is impact on royalty rate burden or ability to transfer process or qualify back-up CMO Other Adequately capitalized Must be able and willing to produce references IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

25 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
9. RFP Package The Package Workscope Technical and Timing Requirements Terms & Conditions Quality Agreement The RFP should be structured to Enable objective and complete comparison of the candidates Expedite the development of a contract Help CMO to understand required scope, potential for expansion / change and their risk Help CMO to understand their risk Avoid taking on a project with more scope that visible Understand potential impediments to meeting timeline Fit with their skills and schedule Both the RFP and CMO response should be complete enough to provide the basis for workscope, pricing and terms IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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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 CMO’s portion of the project: Process description with flow chart and bill of materials In-process and product test methods and target specifications What will be delivered to CMO and by when What the CMO 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.) Requests for information, including: Financial status of the company and description of pharmaceutical development and commercialization programs, if any. Confirmation of absence of conflicts of interest References, inspection history Manufacturing success rate RFP response instructions (due date for submission of response, name and address of person to whom the responses should be directed, etc.) IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

27 10. Contracting and Negotiations
The contract is critical to the balance of leverage in a 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. 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. Anticipate, understand and balance risks on both sides as they change from development to commercial stage activities Integration with Quality Agreement saves time and money and operationalizes the relationship quickly IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

28 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 Can be overkill for some one-offs BUT a balanced MSA can be executed rapidly and accelerate things later on IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

29 Business Checklist for Contracting
Item Tips Scope Clear Scope or if an MSA, clear description of what’s in a workorder Scope change process Clarity CMO Accountability Project management process / interactions Subcontracting Control of subcontracting Ownership of Materials Ownership of materials and responsibility when held at CMO Handling of data Timing, duration Ownership of IP Tech Transfer support Support tech transfer to another facility at sponsor sole discretion Exclusivity? For discussion if warranted De-barred personnel None Deliverables Commitment to timing, conformance to spec and not just CofA Rejection Rejection and recourse for missed deliverables Bumping Protect yourself - Prevention of / Mitigation for bumping Title Transfer and when and how title changes Facilities Commitment to provide facilities and capacity to complete obligations Facility change Lead-time on change of facility or right of refusal / first look Legalese Ins., Indemnification, Confidentiality are business decisions, don’t abdicate Effect of termination Cost controls and process on effect of termination. Fees on cancellation Conflict resolution Have a process - a 3rd party not always good Permits Responsibility for cost of permits, waste removal etc. IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

30 Other Business Agreement Elements
Future issues can be avoided by anticipating needs and building them into contract terms Provision for future supply and/or additional projects 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 Pricing to manage risk Payment obligations that are triggered by acceptance of deliverables (i.e., reports, QA release, etc.) 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 Dealing with risk of loss Ability to negotiate assumption of risk of batch failure increases with process maturity, validation Typically, fill-Finish and DP CMOs do not add enough value to take on risk of loss of API value IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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11. Quality Agreement Clearly articulate technical and regulatory roles and responsibilities Phase appropriate differences Integrated with Terms and Conditions, MSA or Supply Agreement Roles and Responsibilities matrix is more easily read and used by operating personnel than a legalese document IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

32 Issues & Responsibilities, Drafting, Review & Approval
Quality Agreement R&R Item Issues & Responsibilities, Drafting, Review & Approval Org and Personnel Be aligned on role of Quality Group and training Facilities Commitment to compliance, access control, prevention of cross contamination Equipment Qualification, cleaning logs & control Materials & packaging Spec setting, testing, retention, approval of suppliers Production Development, review and approval of MBR, BR, specs, deviations, reprocessing / rework, EM, retention, definition and handling of deviations Analytical Specs, methods, sampling, OOS / Investigations, Turnaround time, validation, Right to participate in investigations QC CofA, Product Disposition at various stages Label, Pkg, Ship & Storage Label text, layout, retention, retest dates, storage conditions, shipping, inspection. Consider if need is more than 5 years and receiving at end of the period. Stability Plan, reporting and approval Change Control Clarity on process QA Complaints, recalls, MSDS, Auditing, release Audits and Inspections Access to facility for Audits Reg Inspections Notifications, Communications, timing Reg Filings Initial, annual and ad hoc Expiry R&R IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

33 …and how to anticipate and proactively work to avoid issues
Being a Good Client …and how to anticipate and proactively work to avoid issues IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

34 Other Side of the Desk – The CMO
Contract manufacturing is a very challenging and often “lumpy” business Scarcity of capacity can sometimes drive price more than level of quality It costs real money to generate a proposal CMOs focus on doing what customers ask Don’t expect them to stop you from making mistakes - It’s Your Development Plan Will they stop you from making process changes that affect impurity profiles or bioavailability? Development Stage vs. Commercial Stage CMO needs Differences between US, EU, India and China IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

35 Challenges CMOs Face in Serving You
CMOs are a service business and you are one of many clients CMOs can be very service oriented but need to balance your project needs and changes with all those of all other clients CMOs do not always have resources, capacity and schedule availability to meet all needs exactly when required. CMOs do not have unlimited surge capacity Ability to add FTEs is limited Ability to go back when there are significant technical hurdles or unplanned failures may not be immediate Lead times impact on responsiveness may not be their doing RM not always available when required Flexibility is not always possible The best CMOs often don’t have much flexibility Clients that keep changing their mind create a ripple effect of cost Be wary CMOs offering too much flexibility! IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

36 Maximizing By Being a Good Client
Success enablers are often set before kick-off Provide Well considered specificity - “Cocktail Napkin” TIPS Cost Your Money and Time! Have realistic expectations of timing Apply adequate internal resources for CMO guidance, oversight and to cover distance & cultural issues Proactive management & metrics Planning - only certainty is that things will go wrong so plan accordingly Plan with contracting and scheduling lead times in mind Build in scheduling lead-times for when problems occur and iterations for to-be-demonstrated technology Execution On-site involvement early in the relationship and more time on-site up front, less time fixing things later Proactive vs. Reactive In-person builds relationship & personal commitment Clear project management and information flow BUT do not impede scientist-to-scientist interaction when needed Strive to be easy to do business with while being clear and firm on your requirements Understand how your changes impact the CMO IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

37 Issues Good Clients Can Anticipate & Avoid
Comments CMO “Performance” and commitment falls short Don’t always assume the CMO is motivated to deliver for you over an alternative Invest time and effort up front in contracting and relationship management Cost and delay of back and forth to get data Don't underestimate the analytical rigor required to complete a filing Plan ahead for site specific and product specific post-run data checklists Cost surprise on follow-on Consider separation of development / CTM to simplify earlier contracts but get ROM quotes based on assumptions CMO has some IP or know-how that is needed in the future Protect your right to all IP and know how required to produce your product Secure rights to process and analytical methods and technology The right to transfer the production technology and qualify other sites to produce the product Need for unplanned technical work on a previously per-batch cost project Consider having that work charged on a transparent time and materials basis with the ability to review and cancel on 30 days notice. IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

38 Issues Good Clients Can Anticipate & Avoid
Comments Delays in finalizing deliverables Consider Payment obligations that are triggered by acceptance of deliverables (i.e., reports, QA release, etc.) 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) Your time or cost constraints will be hard for CMO to meet Consider bonus payments for development and demonstration of specific process yields, which in turn tie to lower unit pricing for product supply Stalemate on issues such as responsibility for failed batch Include terms which delineate the obligations of the parties in terms of communication and interactions, including arbitration Cost increases when you feel there’s no scope-creep 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 Deviation and investigation report charges Should not constitute a scope change Clarify up front in Quality Agreement or contract IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

39 Issues Good Clients Can Anticipate & Avoid
Bumping or Failure If CMO is fairly busy, the opportunity cost of their capacity is high. Want to avoid ability to bump and then use “best efforts” to catch-up later and not be penalized Penalty fees in general are a common practice and not unreasonable to include Can trade-off some termination fee for equitable penalties for non-delivery based on things that they should to anticipate or control Bumping or Failure – if it DOES Happen Consider the Pragmatic approach to the reality Usually advisable to avoid forcing payment of fees from a CMO Identify a win-win which maximizes the outcome and gain back time Typically faster to recoup at contractor than to start over elsewhere Have the contractor provide raw materials for another batch Have contractor bump someone else in order to slot your work ahead If CMO actions resulted in failure, CMO could redo at their cost If results in significant timeline impact and work at a different CMO, consider RM at CMO’s expense or finished material for cost of materials alone without a processing fee IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

40 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
Metrics & Managing Keep metrics simple Understand how your demands change as you progress Consider impact on the CMO Put in the effort to be a good client It’s Your program – you need to lead the CMO Get on-site early Less investment needed avoiding vs. solving IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

41 Tips for Outsourcing with Limited Internal Budget
…And Tips to Help the Timeline IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

42 Keys to Managing to a Lean Budget
Have the right expertise on YOUR side of the desk Knowledgeable internal resources Invest in being prepared Specificity & minimize scope change, rework, risk ID Be proactive Get on-site early Convert fixed costs to variable where possible Right level of functional team members Complement your internal expertise Requires hard-to-find mix of hands-on AND strategic Need experience with outsourcing and current knowledge of CMO performance Seek to minimize your coordination costs of all the resources IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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FTE Effort Examples Function Effort Comments Medchem .25 Process Chem & Mfg. Higher during ID & Selection Form Dev. & Mfg. Pharm - Tox Peaks during on-sites and documents Legal Varies Can limit with good operational contracts Analytical Methods, data Quality Audits, release Packaging Special situations or efficient use of packaging vendors CTM logistics or TPL Depends on trial or Supply Chain complexity Sourcing Special situations Regulatory Strategy, documents ( Operational) Project Management <.1-.15 (Better team, less PM needed) IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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FTE Effort Examples Function Effort Comments Cell line Varies Fermentation Peaks during documentation DSP Lyophilization Form Dev. & Mfg. Higher during ID & Selection Pharm - Tox Peaks during on-sites and documents Legal Can limit with good operational contracts Analytical Methods, data Quality Audits, release Packaging Cold Chain, Special situations or efficient use of packaging vendors ( DP) CTM logistics or TPL Depends on trial or Supply Chain complexity Sourcing Special situations Regulatory Strategy, documents ( Operational) Project Management <.1-.15 (Better team, less PM needed) IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

45 Driving Down Internal FTEs
Leverage FTEs Make sure there’s operational regulatory experience in the functional team members, not just technical Can put PM responsibility into one of the functions until there is critical mass / portfolio need Supply is ongoing so CMC or CTM logistics can make sense Better the quality and the better integrated team, the less specialized PM you need Build and maintain internal tools Templates Vendor database IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

46 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
Hub and Spoke Can surround a limited internal core team / individual with internal functional experts Can serve as Advisors in the background or use the ring of Advisors to each run all the various functions Can have external Project Management Advisor as well Internal Core Team / PM API DP Tox Ana RA PKG CTM Source IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

47 Drive Down Total Resource Use
Can reduce overall and individual FTEs with the right cross–functional experience to take on informed, broader roles in adjacent functions PM effort can also be led by one of the functional team members Can enable success efficiently with an almost completely virtual “internal” team Resource Involvement API DP Tox Ana RA Pkg CTM Log Src PM CTM Log Source Logistics IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

48 Other Sources of Cost Reduction or Speed
A detailed well constructed RFP Have the tech transfer package ready to go Realistic expectations and requirements Take rework and risk out Compress Contracting Time and Get Started Do good pre-screen Get Ts & Cs and Quality Agreements across the table early Legal and purchasing review – especially with larger sponsors and CMOs is a bottleneck Can break up workscope to start under a PO Ask the CMO They can contribute ideas Production Can reduce # of batches i.e. no demo batch if comfortable with the technology and tox risks Submissions Sponsors routinely underestimate the analytical rigor and effort required for a filing – plan ahead IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

49 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
For Discussion … One stop shops Global outsourcing Centralized analytical Taking on risk IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

50 Bumps in the Road Others Have Had…
…and what you can learn from them IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

51 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
Case 1 What they Did What happened Prevention Sponsor with a project outside of their manufacturing know-how needed development from a US based CMO Worried about getting started quickly, sponsor signaled early in negotiations that the CMO was their first choicefor the project Sponsor took CMO recommendations without critical review and would defer to CMO rather than their consultants CMO was opportunistic on scope and pricing CMO made unilateral development decisions and forced a sub-optimal process which hurt yield be gave better throughput for the CMO. Some decisions led to a batch failure Once sponsor involved a consultant, the CMO would take direction only from the sponsor, despite sponsor directives to the contrary, creating mixed messages Treat CMO like a valued team member but don’t confuse with partnership and manage negotiations Adequately resource technical project oversight If a consultant, make sure internal lines of communication are clear Do not expect CMO to make technical decisions that are 100% aligned with sponsors best interest IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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Case 2 What they Did What happened Prevention Quality Agreement not specific enough on aspects such as Changes to raw material suppliers Process changes Sponsor saw changes in impurity profile that took significant resources and time to ID the root cause (new RM supplier) Sponsor saw changed metabolic conditions ( low DO2) and RM changes which altered fermentation. Took many weeks to solve and address In each the CMO was operating within its agreement Proactively ensure Quality Agreement is specific enough to address the uncertainties OK to use CMOs Quality Agreement, as long as all that you need is inserted IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

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Case 3 What they Did What happened Prevention Cash constrained and needing to show progress, Sponsor felt they could not afford to pay a CMO with development capabilities to take their cell culture process from literature and make it “CMO ready” Sponsor felt they could not afford the time for an academic lab to do so either Selected an emerging, low-cost CMO with limited development resources Resulted in timeline delays, failures and iterations Additional cost of having a fermentation consultant coach the CMO staff through follow-on iterations Do the work up front to have your process ready for the type of CMO you have selected IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

54 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
Summary and KSFs Not rocket science but not easy either A little planning & structure – it’s NOT bureaucracy, its your friend Honest understanding and documentation of yourself and your Requirements The right internal expertise in the right amounts at the right time. Does not mean big infrastructure Structured and forward looking RFPs & Contracting Be a good client and anticipate understand what can go wrong. Many more things can be prevented than actually are! IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

55 Supplemental Information
Development Decision Variables and Trade-Offs to Consider as You Plan Your Outsourcing IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

56 Development Implications
Development Strategy Alternatives -Different Approaches to Managing Risk Alternatives Development Implications When Developing to Efficacy in Man 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 Commercial Launch 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 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

57 Outsourcing Implications of Development Strategy Alternatives
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 tech transfer Some need for analytical validation and stability indicating methods Other Varying need for analytical characterization, technology development IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

58 Outsourcing Implications of Approval Strategy Alternatives
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 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

59 Outsourcing Implications of Investment Strategy Alternatives
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 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

60 Outsourcing Implications of Development Plan Alternatives
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 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

61 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 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

62 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. Exo-Endothermic, High Pressure Hydrogenation Processes Is new technology required? Greater scale up challenges 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 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 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech

63 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech
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 IQPC 12th Contract Manufacturing for Pharmaceuticals & Biotech


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