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Outsourcing:Outsourcing:Pitfalls and Best PracticesPitfalls and Best Practices

IQPC Contract Manufacturing ForumIQPC Contract Manufacturing Forum

Paul WoitachPaul Woitach Pharmaceutical Advisors, LLCPharmaceutical Advisors, LLC316 Wall Street, Second Floor316 Wall Street, Second Floor

Princeton, NJ 08540Princeton, NJ 08540609.688.1330609.688.1330

pwoitach@PharmAdvisors.compwoitach@PharmAdvisors.comwww.PharmAdvisors.comwww.PharmAdvisors.com

May 24, 2006May 24, 2006

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Key Principles for SuccessKey Principles for Success

• Plan Backwards from Launch Plan Backwards from Launch • Integrated ViewIntegrated View• Think Tech Transfer EarlyThink Tech Transfer Early• Think Quality Agreements EarlyThink Quality Agreements Early• Structure and Manage Vendor Structure and Manage Vendor

Relationships Relationships • Staff appropriately for OutsourcingStaff appropriately for Outsourcing

That’s all motherhood and apple pie! That’s all motherhood and apple pie!

What’s actionable????What’s actionable????

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Can You Hear The Train Coming?Can You Hear The Train Coming?

• ““We don’t need to think about that because We don’t need to think about that because we’re going to license out in Phase II…”we’re going to license out in Phase II…”

• ““Our licensing partner will worry about Our licensing partner will worry about that…”that…”

• ““Let’s just get GMP material for Let’s just get GMP material for everything…”everything…”

• ““We’ll get a consultant to write the CMC We’ll get a consultant to write the CMC section when the time comes…”section when the time comes…”

• ““We’re starting to work on our Quality We’re starting to work on our Quality Manual…”Manual…”

• ““It’s too early to be thinking about a Quality It’s too early to be thinking about a Quality Agreement – it’s just development work…”Agreement – it’s just development work…”

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Management View of the TimelineManagement View of the Timeline

Nomination PhI PhII PhIII NDA/MAA Approval

License?

DP Activities

PreclinicalPreclinical

Phase IPhase I

Phase IIPhase II

Phase IIPhase II

Phase IIIPhase III

LaunchLaunch

APIAPI

API Activities

Drug ProductDrug Product

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A Truer PictureA Truer Picture

Nomination PhI PhII PhIII NDA/MAA Approval

LaunchAPI/DPEnabling Technology &Supply Manufacturer

API/DPTechnology/Supplies

RM API DP

PhIII Supplies

RM API DPLaunchPlanning

RM DP DP StabilityAPI PAIn Planning

RM API DP ICH Stability ICH DP StabilityPlanning

DP Technology

API Technology

Raw Materials API Activities DP Activities Enabling

EvolvingEvolving

APIAPI

& Drug Product& Drug Product

DemandDemand

Demand

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As You Plan CMO Relationships…As You Plan CMO Relationships…

You should be considering:You should be considering:• Final FormFinal Form• Synthesis technology Interim and preferred bond forming routeSynthesis technology Interim and preferred bond forming route• Analytical Technology Analytical Technology

– RawsRaws– Intermediates and in process controlsIntermediates and in process controls

• Process Development & OptimizationProcess Development & Optimization• Process safety & reaction engineeringProcess safety & reaction engineering• Preferred Salt, polymorph, solvate – what & whenPreferred Salt, polymorph, solvate – what & when• cGMP needs & timingcGMP needs & timing

– Clinical and safety demandsClinical and safety demands– Dosage form development demandsDosage form development demands

• Demonstration of manufacturing including robustness & scalabilityDemonstration of manufacturing including robustness & scalability• Trade off between speed and process learningTrade off between speed and process learning• Reproducibility of bulk form & qualityReproducibility of bulk form & quality• Documents – Regulatory & Tech TransferDocuments – Regulatory & Tech Transfer• Sourcing strategies & ability to manage distance Sourcing strategies & ability to manage distance • Vendor management & staffingVendor management & staffing

Most enter contract manufacturing relationships without adequate Most enter contract manufacturing relationships without adequate considerationconsideration

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Advisors Functional FocusAdvisors Functional Focus

Integrating Research, Development, Integrating Research, Development, Engineering and Commercialization Engineering and Commercialization

ExpertiseExpertise

Supporting Supporting Development, Operations, Strategy and Portfolio Development, Operations, Strategy and Portfolio

ManagementManagement

Rapid, Interactive

Expert Panels

Rapid, Interactive

Expert Panels

PracticalQuality

Systems & Regulatory

PracticalQuality

Systems & Regulatory

Resolve Issues

Build SkillsChemistry,

Formulation Drug Delivery

Safety & Efficacy ADME

Resolve Issues

Build SkillsChemistry,

Formulation Drug Delivery

Safety & Efficacy ADME

Integrated Development

ViewLinking

CMC, Tox, Clinical

Integrated Development

ViewLinking

CMC, Tox, Clinical

Portfolio Decisions,

Due Diligence& Valuation

Portfolio Decisions,

Due Diligence& Valuation

Scale-up & Sourcing Decisions

Scale-up & Sourcing Decisions

Operational Input to

Capital Plans

Operational Input to

Capital Plans

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Inverting the Consulting Model…Inverting the Consulting Model…

Proven DeliveryProven DeliveryInsight-DrivenInsight-Driven

Customized ResourcingCustomized ResourcingIntegrated, Experienced Functional PerspectiveIntegrated, Experienced Functional Perspective

Hands-On Problem-Solvers Hands-On Problem-Solvers Cost-effective, Flexible, IndependentCost-effective, Flexible, Independent

Industry ExpertsIndustry Experts

ExperiencedExperiencedConsultant Consultant ManagersManagers

Unique ClientUnique ClientSituationSituation

Unique ClientUnique ClientSituationSituation

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Objective & ApproachObjective & Approach

• Meeting ObjectivesMeeting Objectives– Provide useful tips & tools to help you Provide useful tips & tools to help you

anticipate and succeedanticipate and succeed– Capitalize on our experienceCapitalize on our experience

• ApproachApproach– Best & Worst practices fall into two Best & Worst practices fall into two

groupingsgroupings1.1. Planning & Requirements DefinitionPlanning & Requirements Definition2.2. Staffing, Execution & Managing the RelationshipStaffing, Execution & Managing the Relationship

– Checklist approachChecklist approach– ExamplesExamples

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Planning & Requirements DefinitionPlanning & Requirements Definition

• Registration strategyRegistration strategy• Integration of DS & DP plansIntegration of DS & DP plans• Timing and Quality of tech transfer Timing and Quality of tech transfer

packagepackage• Early definition of information needs Early definition of information needs • Integrated understanding of scale-up Integrated understanding of scale-up

AND Tech Transfer capabilityAND Tech Transfer capability• Unrealistic flexibility expectationsUnrealistic flexibility expectations• Contingency planningContingency planning

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Execution & Managing the Execution & Managing the RelationshipRelationship

• Adequate resourcesAdequate resources• Managing & metricsManaging & metrics• Expecting vendors to be critical and Expecting vendors to be critical and

help you avoid mistakeshelp you avoid mistakes• Quality Agreement timing & specificityQuality Agreement timing & specificity• Process data & understandingProcess data & understanding

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Tech Transfer PackageTech Transfer Package

• Package ElementsPackage Elements– TechnologyTechnology– Raw Material specs & vendorsRaw Material specs & vendors– Unit Operations as practicedUnit Operations as practiced– Mass Balance as complete as possibleMass Balance as complete as possible– General safety and environmentalGeneral safety and environmental– Analytical RequirementsAnalytical Requirements– Proposed specs for APIProposed specs for API

• Useful for make vs. buy decisionsUseful for make vs. buy decisions• Gives vendor an adequate viewGives vendor an adequate view

– Help them understand Help them understand theirtheir risk risk– Typically big ROI – can avoid cost/risk premiumsTypically big ROI – can avoid cost/risk premiums– Reduces “ifs” and “thens” in their proposed scopeReduces “ifs” and “thens” in their proposed scope– Avoids excessive go-no-go stepsAvoids excessive go-no-go steps

Enable Efficient & Credible Interaction and DecisionsEnable Efficient & Credible Interaction and Decisions

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Early Definition of Info NeedsEarly Definition of Info Needs

• Buying chemistry AND informationBuying chemistry AND information• To PAI, RegistrationTo PAI, Registration• Establish a documentation system for all Establish a documentation system for all

contractorscontractors• Specify what you want and how you want it Specify what you want and how you want it

documenteddocumented– Beyond just batch ticketsBeyond just batch tickets

• Will the resources be Will the resources be availableavailable to get all the to get all the analytical work done that you will need? analytical work done that you will need?

• Build a Development Report as you goBuild a Development Report as you go• Demonstrate professionalism and competence to Demonstrate professionalism and competence to

contractors and your regulatory teamcontractors and your regulatory team

Lower Costs and Avoid Rework / Wasted Lower Costs and Avoid Rework / Wasted EffortEffort

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Scale-up & Tech Transfer CapabilityScale-up & Tech Transfer Capability

• Can scale up on time but…Can scale up on time but…– Will the way they scale-up processes be easily Will the way they scale-up processes be easily

transferable to another facility?transferable to another facility?– Or are they best at scaling up for their equipment?Or are they best at scaling up for their equipment?– Does their scale-up plan favor use of their technologyDoes their scale-up plan favor use of their technology– To what stage can development vendor support your To what stage can development vendor support your

needs?needs?– Do you know when you need to lock the process for ICH?Do you know when you need to lock the process for ICH?– If needed, do you know when you need to confirm and If needed, do you know when you need to confirm and

qualify a commercial CMO?qualify a commercial CMO?– Less Tech transfers can be better but know the trade-offsLess Tech transfers can be better but know the trade-offs

Very Few One Stop Shops Very Few One Stop Shops Work Back from Launch and know what you need, whenWork Back from Launch and know what you need, when

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Registration StrategyRegistration Strategy

• Selection of Registered Starting MaterialSelection of Registered Starting Material– True requirements for strict optimization, True requirements for strict optimization,

process validation and rigorous analytical process validation and rigorous analytical controlcontrol

– Flexibility in commercial scale decisionsFlexibility in commercial scale decisions• Impact on out licensing value Impact on out licensing value

– Future filing and sourcing flexibilityFuture filing and sourcing flexibility

• Impact on cost & time for sponsorImpact on cost & time for sponsor

• What stability position should you plan What stability position should you plan for? for?

Earlier Decisions Provide Critical Enabling DirectionEarlier Decisions Provide Critical Enabling Direction

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Process Data & UnderstandingProcess Data & Understanding

• Affects ability to manage in an outsourced environmentAffects ability to manage in an outsourced environment• Enables informed decisions on key trade-offs Enables informed decisions on key trade-offs

– Speed of Phase I supplySpeed of Phase I supply• Costlier, slower scale-up & process developmentCostlier, slower scale-up & process development

– Early investment in analytics & technologyEarly investment in analytics & technology• Slower initial supplySlower initial supply

– Do you know enough to bet on all doing DP work under GMP to speed time Do you know enough to bet on all doing DP work under GMP to speed time into man?into man?

• Technology infoTechnology info• Supply & demand infoSupply & demand info

• Scale and Quantity definition for your vendor so they can help youScale and Quantity definition for your vendor so they can help you– When to seek multiple runs at given scaleWhen to seek multiple runs at given scale– When to race to scale-upWhen to race to scale-up– How to apply simulation technologiesHow to apply simulation technologies– How to determine ROIHow to determine ROI– Inputs needed to make these decisionsInputs needed to make these decisions– Do you know when you need to lock the process for ICH?Do you know when you need to lock the process for ICH?

• FMEAFMEA• Ability to learn from failuresAbility to learn from failures

All affect vendor selection, vendor ability to deliver and the All affect vendor selection, vendor ability to deliver and the robustness of your process and data packagerobustness of your process and data package

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Unrealistic Flexibility ExpectationsUnrealistic Flexibility Expectations

• The best vendors don’t have much flexibilityThe best vendors don’t have much flexibility– Be wary of too much!Be wary of too much!

• Contracting and scheduling lead timesContracting and scheduling lead times– Hedge rules of thumb & big pharma perspectivesHedge rules of thumb & big pharma perspectives

• 3- 6 months for contractor identification and selection3- 6 months for contractor identification and selection• Build in scheduling lead-times for when problems occurBuild in scheduling lead-times for when problems occur• Build in iterations for to-be-demonstrated technologyBuild in iterations for to-be-demonstrated technology• Only certainty is that things will go wrongOnly certainty is that things will go wrong

• Understand where there’s leverage and where Understand where there’s leverage and where vendor’s situation can affect youvendor’s situation can affect you

Realistic Timelines and RisksRealistic Timelines and Risks

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Adequate ResourcesAdequate Resources

• On-site involvement early in relationshipOn-site involvement early in relationship– More time on-site up front, less time fixing things laterMore time on-site up front, less time fixing things later– Proactive vs. ReactiveProactive vs. Reactive– In-person builds relationship & personal commitmentIn-person builds relationship & personal commitment

• Over / under importance of geography & distanceOver / under importance of geography & distance• Central Project management and information flowCentral Project management and information flow

– Be easy to do business withBe easy to do business with– Do not impede scientist-to-scientist interaction when Do not impede scientist-to-scientist interaction when

neededneeded

It Takes Resources BUT…It Enables Alignment It Takes Resources BUT…It Enables Alignment EfficiencyEfficiency

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Integration of DS & DP PlansIntegration of DS & DP Plans

• EarlyEarly– Analytical methods - DS, DP or other activityAnalytical methods - DS, DP or other activity

• Salt Selection – DP activitySalt Selection – DP activity• Chemistry supply – DS ActivityChemistry supply – DS Activity• Avoid delay because DS or DP vendor has to waitAvoid delay because DS or DP vendor has to wait

– Will raws be available to make what you need when you need itWill raws be available to make what you need when you need it– Understand Bioavability earlyUnderstand Bioavability early

• DP TimelineDP Timeline• Quantity of APIQuantity of API

• LaterLater– Feedback between DS & DP DevelopmentFeedback between DS & DP Development– Avoid scope changes & unrealistic demand to make up for lost Avoid scope changes & unrealistic demand to make up for lost

timetime• DelaysDelays• Erosion of vendor relationshipErosion of vendor relationship

– Timing of Polymorph study vs. riskTiming of Polymorph study vs. risk– Will raws be available to make what you need when you need itWill raws be available to make what you need when you need it

Don’t Rely on Vendors to Integrate For YouDon’t Rely on Vendors to Integrate For You

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Managing & MetricsManaging & Metrics

• Don’t assume vendor is motivated to deliver Don’t assume vendor is motivated to deliver You are one of many clientsYou are one of many clients– Understand how they get their bonusUnderstand how they get their bonus

• Are they motivates to help you achieve your goals?Are they motivates to help you achieve your goals?

• Keep it simpleKeep it simple• Don’t confuse “speed” with “on-time”Don’t confuse “speed” with “on-time”• Understand how your demands change as you Understand how your demands change as you

progressprogress• Put in the effort to be a good clientPut in the effort to be a good client

Inspect What You ExpectInspect What You Expect

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Expecting Vendors to be CriticalExpecting Vendors to be Critical

• CMOs are a service businessCMOs are a service business– Focus on doing what customers ask them to Focus on doing what customers ask them to

dodo– Don’t expect them to stop you from making Don’t expect them to stop you from making

mistakesmistakes• How many vendors get a bad reputation for telling How many vendors get a bad reputation for telling

their clients what the client needs?their clients what the client needs?

– Will they stop you from making process Will they stop you from making process changes that affect impurity profiles? changes that affect impurity profiles?

It’s Your Development PlanIt’s Your Development Plan

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Quality Agreements IQuality Agreements I

Inadequate SpecificityInadequate Specificity• Raw MaterialsRaw Materials

– Change in impurity provide because vendor switched RM supplierChange in impurity provide because vendor switched RM supplier• Communications of Deviations & InvestigationsCommunications of Deviations & Investigations

– Delayed investigation of unexplained variation cost $750K to fixDelayed investigation of unexplained variation cost $750K to fix– Metabolic conditions ( low DO2) and RM changes altered Metabolic conditions ( low DO2) and RM changes altered

fermentationfermentation– Vendor was operating within its agreementVendor was operating within its agreement

• Documentation to support filingsDocumentation to support filings– Inadequate documentation resulted in re-workInadequate documentation resulted in re-work

• Vendor was meeting specs agreed toVendor was meeting specs agreed to• Company had not thought through filing requirementsCompany had not thought through filing requirements

– Site specific and product specific post-run data check listsSite specific and product specific post-run data check lists– Get what you needGet what you need– Avoid cost and delay of back and forthAvoid cost and delay of back and forth– Taxes your scarce resources and busts timelineTaxes your scarce resources and busts timeline

Not Spelling Things Out Can Create Big Risks LaterNot Spelling Things Out Can Create Big Risks Later

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Quality Agreements IIQuality Agreements II

Too much specificityToo much specificity• Define WHAT you need but allow the vendor to Define WHAT you need but allow the vendor to

propose HOWpropose HOW– Avoid unnecessary rigor and scopeAvoid unnecessary rigor and scope– Allow for vendors systemsAllow for vendors systems

• Consider how Quality Agreements differ for Consider how Quality Agreements differ for development work and for supplydevelopment work and for supply

• Careful about applying consultant templatesCareful about applying consultant templates

• QA audit Team QA audit Team – Operational AND Quality considerationsOperational AND Quality considerations– Consider ability to manage ongoingConsider ability to manage ongoing– What some can manage, others can notWhat some can manage, others can not

One of the Key Elements You Should One of the Key Elements You Should ControlControl

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Eliminating a BottleneckEliminating a Bottleneck

• Summarize Ratings against criteria

• Narrow down to 2-3 potential suppliers

• Review with internal stakeholders

• Recommendation and approval of at least 2

• Final negotiations and initial contracting

• Contingency Plan

Supplier Preferences

Long-List to Short List

• Execute CDA

• Request for Information (RFI) on capability areas of interest

• Remote / Paper Quality Audit

• Initial site / technical visit

• Begin business evaluation

• Establish selection criteria

• External Input• Capacity• Performance

Request For Proposal (RFP)

• Draft workscope

• Share desired Terms & Conditions (T&C’s) and Quality Agreement (QA)

• Establish selection criteria

• Tech Transfer package

Pre-Selection

• Technical Assessment

• Preliminary Quality review and criteria for Quality Audit

• Preliminary negotiation

• Price• T&C’s• Quality

Agreement

• Capacity

• Performance

Quality Audit

• Identify potential issues related to Quality Agreement

• Before or in parallel with Contracting

• QA Sign-off

• Quality Agreement

• PO/Final sign off

• Kick-off

ContractingFinalization

Negotiation &Contracting

• Finalize workscope document

• Finalize price

• QA OK – Internal

Taking action earlier to support tight timelines

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SummarySummary

• Plan Backwards from Launch Plan Backwards from Launch • Integrated ViewIntegrated View• Think Tech Transfer EarlyThink Tech Transfer Early• Think Quality Agreements EarlyThink Quality Agreements Early• Structure and Manage Vendor Relationships Structure and Manage Vendor Relationships • Staff appropriately for OutsourcingStaff appropriately for Outsourcing

Thank you!Thank you!Questions?Questions?

Paul Woitach, Pharmaceutical Advisors, LLCPaul Woitach, Pharmaceutical Advisors, LLC609.688.1330609.688.1330

pwoitach@PharmAdvisors.compwoitach@PharmAdvisors.comwww.PharmAdvisors.comwww.PharmAdvisors.com