By Kate Hammeke, VP of Market Research, Industry Standard Research (ISR)
This year’s CMO Leadership Awards resulted from feedback obtained through four contract manufacturing surveys — biologic API, biologic drug product, small molecule API, and small molecule drug product — conducted by Industry Standard Research. Participants were screened for decision-making influence and authority, as well as their areas of outsourcing expertise, and then directed to the surveys that matched their qualifications.
In the surveys, respondents relayed how well suppliers met their expectations across 23 CMO attributes and service activities that feed into the six main categories of awards: Quality, Reliability, Capabilities, Expertise, Compatibility, and, new in 2018, Service. The criteria for each of these awards comprise several performance metrics to ensure a robust analysis and understanding of how a CMO delivers its services to customers. The data is experience-based and provides valuable insight for the CMO selection process: how the CMO performed for its current and recent customers relative to their expectations. A total of 1,928 service encounters with more than 110 contract manufacturers were collected to form the industry averages for each award category. Individual CMO scores were then compared against the industry average in each category, as well as in each respondent group breakout, to identify CMOs that consistently exceed customer expectations.
Unfortunately, a CMO cannot focus on achieving excellence at one magic attribute or service capability and expect to win business on that basis alone. Consistent with research from prior years, the 2018 data shows that there is still a lack of consensus on which CMO attribute plays the greatest role in a successful sponsor-CMO relationship. ISR has found that the most important CMO attribute to a sponsor varies by outsourcing driver (no internal capacity versus augment internal capacity), by outsourcing phase (development versus commercial manufacturing), project type (small versus large molecule, API versus drug product), company size, region, and even the role and responsibility of a respondent within the company. With all of these factors involved, it is not surprising that the highest prioritized attribute tends to capture about 10 percent of respondents’ votes, and that more than a dozen different attributes are considered “most important” to some segment of the respondent population.
It’s more than just the absence of a “magic attribute” that leads to successful sponsor-CMO relationships; the data also shows that the attributes sponsors prioritize are different from the ones at which they believe CMOs excel. Using data from the four contract manufacturing surveys, ISR analyzed the common attributes between CMO selection criteria and CMO performance evaluations to see how well CMOs meet the most-critical sponsor needs. Figure 1 shows the top three CMO selection attributes as prioritized by sponsors for each type of project included in the research, as well as the attributes in which CMOs received the highest ratings (i.e., the attributes for which the industry average is the highest).
The data shows a stronger correlation between sponsors’ priorities and CMOs’ highest-rated capabilities for outsourced small molecule manufacturing than for outsourced biologic manufacturing. For small molecule API projects, the top three attributes sponsors desire when selecting a CMO are: a proven ability to manufacture small molecule API, a strong regulatory track record, and a tie between scientific knowledge and reliable, on-time delivery. CMOs received their highest scores in a proven ability to manufacture small molecule API, the experience level of staff, and a tie between scientific knowledge and timely project communications, showing alignment on two of the sponsors’ top criteria. With regards to small molecule drug product, sponsors prioritize the experience level of staff, having a track record of meeting quality performance metrics, and having the capacity to meet sponsor demands. Small molecule drug product CMOs garnered their highest ratings in being well-regarded in the industry, scientific knowledge, and having the capacity to meet sponsor demands, aligning on one of the top three sponsor selection criteria. The long history of developing, manufacturing, and outsourcing small molecule pharmaceuticals has certainly contributed to contract manufacturers successfully aligning their areas of expertise with sponsors’ top criteria.
Sponsors and CMOs matched on fewer metrics with regards to outsourced biologic manufacturing. Sponsors selecting CMOs for outsourcing biologic API manufacturing prioritize strong regulatory track record, having the capacity to meet sponsor demands, and a tie between scientific knowledge and a track record of meeting quality performance metrics. Biologic API CMOs received their performance ratings in scientific knowledge, ability to smoothly scale up and transfer technology, and timely project communications. CMOs matched on only one of the sponsors’ top selection criteria: scientific knowledge. There were no matches between contract manufacturers’ top scoring attributes and sponsors’ top selection criteria for outsourced biologic drug product manufacturing. Sponsors prioritized having the capacity to meet sponsor demands, track record of meeting quality performance metrics, and reliable, on-time delivery. CMOs received the highest performance ratings for being well-regarded within the industry, having a full range of manufacturing for the dosage forms we require, and a tie between meeting overall project timelines and complementary core competencies to in-house or other manufacturing contractors.
Both sponsors and CMOs can improve their understanding of how the relationship between selection priorities and performance strengths impacts the client- vendor relationship. Both entities can then use that understanding to have more successful relationships. CMOs should examine their internal capabilities in the areas sponsors have identified as priorities and strengthen any areas of potential weakness. By aligning their areas of manufacturing expertise with sponsors’ priorities, CMOs will create the foundation to win more business. Sponsors can use the information to reexamine their selection process — which should be done as a business grows and outsourcing needs change — to ensure the process and selection criteria are focused on the qualities that truly matter to the project and positively contribute to the CMO-sponsor relationship. This helps sponsors ensure their company is utilizing their suppliers’ strengths to the advantage of their businesses.
Survey Methodology: Industry Standard Research’s Contract Manufacturing Quality Benchmarking research is conducted annually via online surveys. For the 2018 CMO Awards data, more than 110 contract manufacturers were evaluated on 23 different performance metrics. Research participants were recruited from biopharmaceutical companies of all sizes and screened for decision-making influence and authority when it comes to working with contract manufacturing suppliers. Respondents only evaluate companies with which they have worked on an outsourced project within the past 18 months. This level of qualification ensures that quality ratings come from actual involvement with a business and that companies identified as leaders are backed by experiential data.