1 A Seminar On Pharmaceutical Outsourcing A Seminar On Pharmaceutical Outsourcing

2 Content 1. Outsourcing: Introduction & Process 2. Document Required 3. Contractor Selection Method & Criteria 4. General Guidelines 5. Types Of Outsourcing 6. Management Of Outsourcing 7. Benefits, Advantages & Disadvantages

3 Outsourcing What is Outsourcing? Outsourcing is a strategic decision to give a task or activity to an independent contractor who determines how best to do the task or activity. Outsourcing is a strategic decision to give a task or activity to an independent contractor who determines how best to do the task or activity. The firm and the independent contractor become partners and may establish a long-term relationship. The firm and the independent contractor become partners and may establish a long-term relationship. Examples of outsourced activities: Manufacturing, Analytical, maintenance, calibration, validation etc. Examples of outsourced activities: Manufacturing, Analytical, maintenance, calibration, validation etc.

4 Introduction Outsourcing is nothing but the process in which the contract giver can give the contract for various department of his company to the contract acceptor for definite period of time Outsourcing is nothing but the process in which the contract giver can give the contract for various department of his company to the contract acceptor for definite period of time Each Outsourcing contain three main items contract giver, contract acceptor and contract. Each Outsourcing contain three main items contract giver, contract acceptor and contract. In house production getting exhausted to other company for manufacturing of pharmaceutical product. In house production getting exhausted to other company for manufacturing of pharmaceutical product.

5 Process of outsourcing

6 Work System Design Insource the Work Outsource the Work The Decision to Outsource Contingent employees: consultants Independent Contractor

7 Document Required 1. SOP of outsourcing department 2. Contract Agreement

8 Contractor Selection Method  A good way to avoid most experience level, work quality, and project management problems is to select the right contract company for the job.  Two tools to help you do that are predefining contractor selection criteria and a strong request for proposals (RFP) process.

9 Contractor selection criteria Should be defined before the RFP process begins. Should be defined before the RFP process begins. Years of industry experience. Years of industry experience. Number of staff dedicated to the project. Number of staff dedicated to the project. Years of experience for all staff dedicated to the project. Years of experience for all staff dedicated to the project. Accuracy of proposed work estimate as compared to internal estimations. Accuracy of proposed work estimate as compared to internal estimations. Amount of detail in the submitted proposal. Amount of detail in the submitted proposal. Hourly billing rates and expenses. Hourly billing rates and expenses.

10 General Guidelines General Guidelines  Contract production and analysis must be correctly defined, agreed in order to avoid misunderstanding that could affect product quality.  There must be written contract between contract giver and contract acceptor which clearly establishes the duties of each party  The contract must clearly state the way in which the authorized person is releasing each batch of product for sale is his/her responsibility.

11 General Guidelines  The contract giver should bear the ultimate responsibility for ensuring that the product specification complies with relevant legal requirements, that the product manufactured meets its specification and specified quality is maintained during storage, transport and distribution.  All arrangements for contract manufacture and analysis including any proposed changes in technical or other arrangements should be in accordance with the marketing authorisation for the product concern.

12 General Guidelines  The contract should permit the contract giver to audit the facilities of the contract acceptor.  In case of contract analysis the final approval for release must be given by the authorised person

13 Types Of Outsourcing 1) Manufacturing And Packaging 2) Analytical 3) Maintenance 4) Calibration 5) Validation

14 1] Manufacturing And Packaging Outsourcing This relies on fallowing three items. This relies on fallowing three items. 1. Contract giver 2. Contract acceptor 3. Contract

15 A) Contract Giver  Responsible for assessing the competence of the contract acceptor.  Should assure himself that contract acceptor has adequate premises, equipments, and staff with sufficient knowledge and experience.  He should provide all the necessary information to contract acceptor to carry out the contracted operations correctly.

16 A) Contract Giver  Should ensure the contract acceptor is fully aware of any problems associated with the product.  Should ensure that all provided product and material by contract acceptor should comply with their standard specifications.

17 B) Contract Acceptor  Should must have adequate knowledge, premises, equipments and staff to fulfill the contract.  Should not pass any of the work entrusted to him under the contract without the contract giver approval to the third party.  Should refrain/avoid from any activity that may affect the quality of the product.

18 B) Contract Acceptor  Should must ensure that all materials delivered to him are suitable to their intended use.  If contract acceptor supplies materials, the contract giver should specify the quality required in the specifications/master document.

19 C) The Contract  The contract must specified respective responsibilities related to product between contract giver and acceptor.  Should specify the way in which authorised person releasing the batch for sale.  It should describe that who is responsible for purchasing, testing and releasing materials.

20 C) The Contract  It should describe handling of starting materials, intermediates, bulk and finished products.

21 2) Analytical Outsourcing Analysis & testing of material can be taken by contract. Analysis & testing of material can be taken by contract. The nature & extent of any contract analysis to be undertaken should be agreed upon & clearly defined in writing & procedures for testing samples should be clearly set out. The nature & extent of any contract analysis to be undertaken should be agreed upon & clearly defined in writing & procedures for testing samples should be clearly set out. It should be supplied with full specifications documents of the material to be tested. It should be supplied with full specifications documents of the material to be tested.

22 3) Maintenance Outsourcing 3) Maintenance Outsourcing Maintenance of various instruments and equipments in the industry can be given to the other company. Maintenance of various instruments and equipments in the industry can be given to the other company. This helps to maintain proper conditions of that instruments and equipments. This helps to maintain proper conditions of that instruments and equipments. Maintenance of other systems like lift, fire extinguisher, Alarm System etc. Maintenance of other systems like lift, fire extinguisher, Alarm System etc.

23 4) Calibration Outsourcing It Is Sometimes Inevitable & Sometimes Matter Of Choice. It Is Sometimes Inevitable & Sometimes Matter Of Choice. You Concern For Quality Compliance Is Well- Justified. You Concern For Quality Compliance Is Well- Justified. Identify Your Critical Quality Requirements Communicate With Your Vender. Identify Your Critical Quality Requirements Communicate With Your Vender. Get Applied Quality Controls To A Third Party. Get Applied Quality Controls To A Third Party.

24 5) Validation Outsourcing Pharmaceutical manufacturer have to always ensure precise dose uniformity. Pharmaceutical manufacturer have to always ensure precise dose uniformity. To accurately regulate this uniformity some processes have developed. To accurately regulate this uniformity some processes have developed. Validation outsourcing of each step from lead discovery to product launch. Validation outsourcing of each step from lead discovery to product launch. It helps to improve accuracy in precise dose uniformity. It helps to improve accuracy in precise dose uniformity.

25 Validation Outsourcing Validation Outsourcing Quality Control and Repeatability Quality Control and Repeatability Every piece of laboratory equipment used in the drug discovery and development process, from refrigerators and freezers to incubators and centrifuges, must be fully validated. Every piece of laboratory equipment used in the drug discovery and development process, from refrigerators and freezers to incubators and centrifuges, must be fully validated.

26 Management of outsourcing Is outsourcing a valid alternative? Is outsourcing a valid alternative? What are the expected benefits and cost savings? What are the expected benefits and cost savings? What functions should be considered for outsourcing? What functions should be considered for outsourcing? What terms need to be considered? What terms need to be considered? How will the relationship be managed? How will the relationship be managed? What steps are necessary to implement the process? What steps are necessary to implement the process? How will performance be measured? How will performance be measured? What is the required infrastructure What is the required infrastructure

27 Benefits Of Outsourcing Increase management awareness of outsourcing issues. Increase management awareness of outsourcing issues. Evaluate and document current performance levels. Evaluate and document current performance levels. Determine contract resource requirements. Determine contract resource requirements. Identify risks and benefits. Identify risks and benefits. Develop accurate pricing. Develop accurate pricing. Identify areas for improvement. Identify areas for improvement. Assist in contract negotiations. Assist in contract negotiations.

28 Advantages Reduces overall cost by about 30 to 35%. Reduces overall cost by about 30 to 35%. Improve manufacturing. Efficiencies. Improve manufacturing. Efficiencies. Reduces problems faced during the regulatory processes around the world. Reduces problems faced during the regulatory processes around the world. Minimize investments in capital-intensive facilities. Minimize investments in capital-intensive facilities. Improve net earnings and cash flow. Improve net earnings and cash flow. Divert resources to focus on other competencies like marketing. Divert resources to focus on other competencies like marketing.

29 Advantages Advantages Better quality people and knowledge may be applied to an activity or task by the outsourcing firm. Better quality people and knowledge may be applied to an activity or task by the outsourcing firm. Reduction in administrative costs may be possible when certain tasks are outsourced. Reduction in administrative costs may be possible when certain tasks are outsourced. Outsourcing certain activities and employees that do not fit with company culture may be used to preserve a strong culture or employee morale. Outsourcing certain activities and employees that do not fit with company culture may be used to preserve a strong culture or employee morale.

30 Disadvantages Disadvantages Outsourcing may lead to loss of control of certain activities which may be a problem on time sensitive projects. Outsourcing may lead to loss of control of certain activities which may be a problem on time sensitive projects. Outsourcing an activity may result in loss of the opportunity to gain knowledge and information that may have general application to other key processes and activities. Outsourcing an activity may result in loss of the opportunity to gain knowledge and information that may have general application to other key processes and activities.

31 Reference Pharmaceutical Quality Assurance By Manohar A. Potdar, Nirali Prakashan Page no Pharmaceutical Quality Assurance By Manohar A. Potdar, Nirali Prakashan Page no

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