Outsourcing Success Requires Constant Evolution

By Kate Hammeke, VP of Market Research, Industry Standard Research (ISR) @ISRreports

2020 is the ninth year in which Life Science Leader magazine has published the CMO Leadership Awards. These awards result from a community effort, where industry peers have given feedback on their experiences working with contract manufacturers via four different surveys that capture drug substance and drug product CMO interactions for small and large molecule products on the market or in development. The research is conducted by Industry Standard Research, a full-service market research provider to the biopharmaceutical and biopharma services industries.

Industry peers invited to participate in the web-based quantitative research are screened for decision-making influence and job function and then routed to the surveys that match their credentials. This approach to data collection captures feedback on a detailed service level, results of which are available in ISR’s suite of CMO Quality Benchmarking reports. The service-level data are aggregated to a company level for the CMO Leadership Awards and used to recognize CMOs that consistently exceed customer expectations companywide.

Respondents complete a rigorous series of performance questions to evaluate contract manufacturers they have worked with in the past 18 months on 23 performance metrics.

The six main award categories — capabilities, compatibility, expertise, quality, reliability, and service — are each composed of four to six performance metrics. The goal of the research and awards is to help prospective buyers of CMO services understand how a contract manufacturer has delivered its services for recent customers relative to their expectations.

The 2020 awards are based on 2,088 unique service interactions between sponsors and CMOs and include more than 125 contract manufacturers. ISR aggregated and weighted these data to establish the industry averages for each award category. Individual CMO’s scores are then compared to the industry average in each category, as well as in each respondent group breakout, to identify winning CMOs.

Before asking sponsors to evaluate the contract manufacturers with whom they have recently worked, each survey asks participants about the CMO selection process at their organizations. ISR asks respondents to consider 28 different CMO characteristics and to select the five most important when choosing a manufacturing supplier as well as the single most important selection criterion. Among these characteristics are the 23 performance metrics, and other traits like cost, financial stability, and having a positive prior experience with the supplier. This information is useful to both established and beginner outsourcers. Rookies can learn from experienced outsourcers about which CMO characteristics have contributed to successful relationships. Knowledgeable outsourcers can optimize their outsourcing approaches through insights from peers who share common needs or goals.

In prior years, responses from this question revealed a lack of clarity on which traits truly matter when it comes to CMO selection, largely because no single attribute received significantly more votes than the others. Instead, a handful of CMO characteristics would tie for “most important,” making it difficult for suppliers to know where to focus their operational, business development, and marketing efforts in order to win more business. Again, this year, ISR analyzed the top handful of attributes identified as “most important” across the four surveys looking for patterns to help guide CMO selection. The good news is that respondents to the 2020 CMO Benchmarking surveys showed stronger concentrations around a few attributes, providing some clarity into which characteristics set a CMO apart from the rest.

THE MOST IMPORTANT SELECTION CRITERIA CHANGE

A key finding is that the two attributes identified as “most important” for CMO selection across all four manufacturing categories last year lost their all-category status [see figure below]. Reliable, on-time delivery and has capacity to meet our demands are still sought-after traits when choosing a CMO, but among biologic drug substance outsourcers, reliable, on-time delivery lost its status to scientific knowledge. Small molecule drug substance outsourcers prioritized track record for meeting quality performance metrics and the ability to smoothly scale-up manufacturing and transfer technology as most important selection attributes, which booted has capacity to meet our demands and scientific knowledge out of their top five selection attributes.

Meanwhile, outsourcers of biologic drug product identified the same five attributes that they did last year as most important when it comes to CMO selection. Small molecule drug product outsourcers also reprioritized their top five over the past year. Previously, scientific knowledge held a top-five position; however, this year it was trumped by the ability to smoothly scale-up manufacturing and transfer technology. Due to a tie, a full range of manufacturing for the dosage forms we require joins the top five, and has capacity to meet our demands hangs on with the same number of votes for being the most important selection criterion.

Fortunately for CMOs, the two traits with all-category status were replaced by one — strong regulatory track record. Regardless of outsourcing activity, respondents indicated it is essential to have a solid regulatory history in order to be in the consideration set. CMOs need both to possess regulatory excellence and to communicate it effectively to their prospective buying audience to take advantage of this insight into CMO selection.

Sponsors should know that the attribute strong regulatory track record corresponds to the Quality CMO Leadership Award. When reviewing the winning service providers of the 2020 CMO Leadership Awards on the next few pages, know that these contract manufacturers have been identified by your industry peers for continually exceeding their expectations.

KATE HAMMEKE is vice president, market research, at Industry Standard Research

Survey Methodology: Industry Standard Research’s Contract Manufacturing Quality Benchmarking research is conducted annually via online surveys. For the 2020 CMO Awards data, more than 125 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.