PDA Outsourcing / CMO Conference: A Review by Bob Beall

November 23, 2016

On November 3rd and 4th, I had the opportunity to meet with Pharmaceutical industry experts at the PDA Outsourcing / CMO conference in Washington, DC. It was a fantastic event with representatives from both industry and regulatory groups discussing the relationships between outsourcing companies and contract manufacturing sites.

I was able to share the framework for identifying the right contract manufacturer utilizing the five cornerstones of the relationship, which include Capability, Compliance, Customer Service, Cost, and Quality. The response was very positive, though I was only able to provide a small portion of the overall evaluation process that I utilize, which includes reviewing product requirements, site and company requirements, product forecasts, and designs. All of the representatives in the room felt that establishing a relationship between the outsourcing companies and the contract manufacturing sites was critical for the long term health of both groups of companies.

The examples of all five cornerstones allowed each company to evaluate what was truly important for them. Utilizing the weighted numeric value allowed each company to determine the best fit rather than just looking at cost or capability. For some products, the initial cost may be higher due to purchasing some capability, but the long range effect of dealing with a compliance issue or a stronger supply chain will offset those costs.

Overall, the process allows companies to see where they stack up in key markets with specific services. CMOs gain the advantage of identifying where they stack up in the overall market based on what outsourcing professionals consider the most important aspects. Outsourcing experts indicated a 40% growth in the CMO work, with significantly higher volumes for specialized dosage forms and lower growth and potential profit in the traditional product areas. The basis for this analysis is the drug product evolution.



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