By Kate Hammeke, VP of Market Research, Industry Standard Research (ISR)
There are many ways to think about outsourcing. Most drug sponsors have more than one motivation for engaging a CDMO/CMO and use a combination of outsourcing approaches or types of outsourcing relationships to accomplish their manufacturing needs. Whether it’s cost- or time-savings, access to technologies, skills, scientific expertise, or capacity, there are many reasons for hiring a CMO. At ISR, we look at outsourcing motivations from a variety of different angles. At the top level, we ascertain whether a drug sponsor has internal manufacturing capabilities and uses CMOs to supplement their own manufacturing, or if the drug sponsor uses CMOs because it lacks manufacturing facilities.
Among those with internal manufacturing capabilities, we investigated how experience and capacity influence CMO use. In our Development and Commercial Manufacturing Outsourcing Models market research, we ask survey respondents to pick the best fit among four reasons that manufacturing may be split between in-house and external resources for the drug substance(s)/drug product(s) for which they are familiar. The options provided are: 1) adequate experience and adequate capacity, 2) adequate experience but lack capacity, 3) lack experience but adequate capacity, 4) lack experience and lack capacity.
THE IMPORTANCE OF PRIMARY VERSUS SECONDARY SUPPLIER WHEN OUTSOURCING
The reason we look at outsourcing from these vantage points is that we have found key differences in sponsor behavior when it comes to their outsourcing approach, outsourcing satisfaction in general, CMO selection criteria, and CMO satisfaction levels that tie back to these motivations. The motivation behind engaging a CMO to be a primary supplier versus engaging a CMO to augment internal manufacturing capacity as a secondary supplier should play an important role in determining your company’s outsourcing approach. An example of why these outsourcing drivers should be considered when developing your company’s outsourcing strategy follows.
Let’s say your organization has internal manufacturing capabilities, but not enough available capacity. As a result, your company engages a CMO as a secondary supplier to augment the supply manufactured in-house. The needs your company has in a CMO are different from those of drug sponsors that outsource all manufacturing. It also means your CMO selection criteria are different. When a drug sponsor needs access to capacity as opposed to scientific know-how, our research shows timelines, a solid regulatory history, and reliable, on-time delivery are top decision factors.
But what if your company is a virtual biotech that does not have manufacturing facilities? A drug sponsor that engages a CMO as the primary supplier has different needs from that CMO than would a drug sponsor with internal manufacturing capabilities. This type of outsourcer (one with no manufacturing facilities) needs to hire out all manufacturing-related services to CMOs and to rely on CMOs for scientific expertise because they don’t have experience manufacturing the compound/ product themselves. So, while access to capacity factors into outsourcing approach and CMO selection criteria, it is not the primary factor or a top-five consideration. ISR’s research shows that among this type of outsourcer, CMO selection criteria are focused around scientific knowledge, experience level of staff, and right-first-time measurements. This company’s outsourcing approach should be directed by the absence of in-house manufacturing expertise, which lends itself to a more long-term, strategic engagement of CMOs.
So, before you start thinking about CMO selection criteria or which specific CMOs to consider for a project, think about why your company is outsourcing manufacturing. Those motivations should guide your company’s outsourcing approach and inform your CMO selection criteria, which together influence the CMOs your company should shortlist.
KATE HAMMEKE is VP of market research at Industry Standard Research.