Outsourcing Manufacturing and Analytical Needs in the Biopharmaceutical Industry

Expanding biopharmaceutical pipelines and therapeutic modalities are feeding a boom in outsourcing key elements of development and manufacturing projects. The rapid growth of the industry as well as of emerging therapeutic areas (e.g., antibody–drug conjugates, biosimilars) challenge sponsors and contractors alike to meet industry needs.

The authors in this featured report explore increasing complexities of devising long-term business strategies, the importance of choosing between long-term partnerships or one-time/transaction-based projects; the assurance that adequate business support and technical capabilities exist on both sides of the relationships; and the criticality of navigating the uncertainties of working with different quality organizations.

Most of these considerations always have been an element of biopharmaceutical outsourcing, whether to contract research, manufacturing, or the newer types of development and manufacturing organizations (CROs, CMOs, CDMOs). But despite a history of outsourcing in the biopharmaceutical industry, the decisions appear to be more complex these days as new product classes enter the pipelines and as companies in regions new to biotechnology manufacturing seek to devise their own approaches to quality systems and regulations.

A Conversation About Outsourcing Trends
In preparing for this report, I spoke with Jeff Staecker, principal consultant at BioPhia, about his view of current outsourcing trends. Those identified in our discussion can set the stage for the articles that follow. Issues that affect decisions to outsource include cost, converging quality systems, change management, and staff training/expertise (including statistical capabilities).

Montgomery: Cost is always a factor in outsourcing. How does a sponsor weigh the costs of short-term and long-term contract relationships?

Staecker: Use of contractors allows sponsors to expand their manufacturing and testing capacities rapidly, including expanding the geographical footprint for production and testing of materials. Establishing a contract facility requires time and significant capital, and most contract organizations try to begin with a limited footprint and an ability to expand. By necessity, they need to take on the risk of certain start-up costs, but there frequently is a need to share risk. For example, expansion of a facility or purchase of a facility is frequently accompanied by a long-term contract. Not all drugs make it to market, and future production can be compromised by the introduction of newer and better drugs.

Because sponsors need to register contract laboratories in their worldwide regulatory submissions, it is in the interest of both sponsors and contractors to establish business relationships that include long-term success of contract sites. Establishing this win–win strategic alliance is an ongoing challenge to balance short-term costs with long-term costs and associated risks.

Montgomery: Differences and changing worldwide quality expectations seem to be both easing and complicating agreements between sponsors and contractors. How can a quality agreement help reduce cost and risk?

Staecker: The first need is to minimize exceptions when designing a quality agreement. A contract organization must balance meeting client-specific desires with the need to use quality approaches with minimal exceptions for clients. Making exceptions to common contractor practices raises cost, and asking individuals to execute procedures outside of normal practices increases both cost and risk. As difficult as it is to prevent human error and have a good training program when managing your own product, imagine when individuals have to deal with many possible exceptions that increase time and cost, and require extra training.

The possibility for errors increases, too, when QC analysts have to work with the differing demands of multiple quality agreements, as people move from project to project, and as different clients require attention to differing criteria. When faced with bits and pieces of multiple quality systems, all participants can benefit from close attention to integrating business with technical (and statistical) needs at the formation of a relationship.

A related challenge is the issue of ownership of quality and compliance between sponsors and contractors. Although regulatory agencies have clearly defined an expectation of sponsor oversight, contract organizations are still audited and cited (e.g., FDA form 483s), and compliance issues have led to the closing of at least one contract site. How to define baseline quality and compliance expectations for contract organizations is an ongoing question. It can be complicated when newer product classes are outsourced — such as when a contractor more familiar with drug GMPs (good manufacturing practices) takes on work for a combination product under device GMPs. The quality agreement in such a case can define what’s needed at the contractor to address device GMPs. But can a contractor rely on the sponsor, or does it need to develop device GMP expertise outside without a client’s input (adding cost/complexity for a contractor)?

Montgomery: How do sponsors work with contractors to ensure quality and confidentiality?

Staecker: Sponsor oversight includes a quality audit before use, periodic audits, and (frequently) a “person in the plant” during some or all manufacturing runs. In addition, practices vary in terms of sponsor involvement in SOP changes, deviations, investigations, and report generation such as method and process validations.

An issue that complicates sponsor oversight is the need for sponsor-to-sponsor confidentiality: When does a quality issue for one sponsor affect another, and how can that information be shared? Sponsors and contractors have a strong desire to keep information confidential, and contractors usually resist a sponsor’s desire to share information with other companies. A good example of this is in fill–finish operations. When a problem occurs during filling or lyophilization, should the sponsor that will use the facility next be involved in the investigation to have control over managing potential risk to its product? If a contractor’s QC lab observes potential issues with an instrument used for all sponsors, when does the contractor need to notify all sponsors? What if that problem might have existed for a period of time?

Innumerable issues such as these arise. Some larger companies can leverage greater involvement, but smaller companies rarely have insight beyond the contract operations specific to them.

Montgomery: What are current practices for managing testing and manufacturing changes, especially when a sponsor may be working with multiple contractors in different geographies?

Staecker: Contractors, particularly CMOs, do face challenges managing change. For example, a CMO will have a quality group that qualifies suppliers and provides oversight over vendors. That group will create a quality agreement to define a system regarding notification/approval of vendor changes. The requirement to include sponsors on decisions is normally part of that quality agreement. But short of a sponsor being involved in every change, by necessity the quality agreement needs to define changes requiring sponsor approval through more general categorization. This categorization is particularly difficult for sponsors licensed in multiple geographies when a specific country may need notification and/or preapproval of changes not required through most of the world.

Examples of common changes include

As an example, the regulators in Health Canada want to be informed of certain changes, but not all. When quality might be at risk, contractors and sponsors work closely together. But when a company is manufacturing for 100 geographies, those contractors usually don’t know what needs to be in each annual report. Once you get a biopharmaceutical on the market with a significant customer base, you want to push into as many markets as possible. This is usually a minimum of 60–70 geographies — sometimes significantly more.

Montgomery: How can contract organizations make a good business case for staying current with new technologies?

Staecker: This is an often overlooked challenge in outsourcing. CMOs often develop platform processes and associated analytical methods, and contract testing labs frequently have standard analytical methods. Those platforms almost always are restricted to a particular type of protein (e.g., monoclonal antibodies or antibody–drug conjugates). It is difficult for contract organizations to develop and implement the most current technologies because of the technical complexities that come with moving advances forward when multiple sponsors are involved. It is possible that the issues of technical advancement will be highlighted in coming years as sponsors address challenges in ongoing process validation/verification and incorporate analytical methods into their ALCM (analytical lifecycle management) systems.

Another example of the challenge for contractors staying on the cutting edge is the use of statisticians in manufacturing or for method validations. Contract organizations usually don’t have statisticians available for such work, leaving it to clients to drive such activities. But a client may be unaware of this and lack the funds or awareness to drive such activities. Statistics are being increasingly leveraged for process validation/continuous process monitoring, designing/interpreting design-of-experiments (DoE) studies, use in method transfers, and in the design of method validations. Application of statistics is just one example of the struggle to apply new approaches in a contract world in which small companies struggle more than large biopharmaceutical companies.

Who, What, When, Where, and How?
The articles that follow in this report address the above topics in greater detail. Mike Merges of Catalent presents a new model for assessing what to outsource. Cassidy Cantin and Kristi Sarno of Latham Biopharma talk about special issues that arise during outsourcing biosimilar development, and Allan Davidson of Piramal outlines issues specific to approaching antibody–drug conjugate work. Christopher Talpas of Therapure concludes this report by looking at new approaches to technology transfer.

Jeffrey Staecker is principal consultant at BioPhia Consulting and resides in the greater Boston area, [email protected]. S. Anne Montgomery is cofounder and editor in chief of BioProcess International, [email protected].