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CMOs, Pharma and Outsourcing: Perception vs. Reality

By Raymond Forslund, Senior Director, Project Management, Laurus Synthesis Inc.

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Raymond Forslund, Senior Director, Project Management, Laurus Synthesis Inc.

Although scientists at pharmaceutical companies and scientists at contract manufacturing organizations (CMOs) share a common goal, to make a positive impact on the lives of patients, misconceptions sometimes stand in the way of their true collaboration. Both sides tend to misread or underestimate the other’s motives and competencies: they would benefit from a better understanding of their misconceptions. 

There’s a general assumption that pharmaceutical companies have generous sums of money at their disposal – a common thought among CMOs and pharmaceutical scientists as well. Little emphasis is placed on the high financial investment in research and development at pharmaceutical companies of all sizes, of which outsourcing is only a small part. In a similar way, pharmaceutical companies would be shocked at the high cost of doing business faced by CMOs. While the CMO and the pharma company may believe that the other is “raking it in”, that perception is far from the reality. In the outsourcing world, low profits are a reality that the CMO must settle for in order to be competitive.

The high level of competence that CMO scientists bring to the table is also underrated, as is the arduous task of assembling pharmaceutical professionals with impressive credentials and a high level of experience. Many falsely believe that scientists turn to a CMO position because they cannot find work at a pharmaceutical company when in fact, this simply is not the case.  Many CMO scientists turn to this part of the pharmaceutical discovery and development industry because they appreciate the number and variety of active programs and proposals that will regularly come their way. In most cases, this is a far larger number than they would experience if they worked at a pharma company where the focus on individual therapeutic specialty areas can limit a wider breadth of experience. As a scientist who has had both pharmaceutical and CMO experience, I can attest to the fact that over a period of ten years, I was involved in about ten different programs where I “knew” the chemistry.  Today, as part of a CMO team, it is not unusual for me to see a large number of programs in a month, expanding my knowledge base and heightening my scientific expertise. Many of the scientists who establish CMO companies have resumes that would meet the most stringent qualification requirements of the industry’s foremost pharmaceutical companies. I have observed, first-hand, the ability to lead demonstrated by CMO management time and time again. Their ability to quickly grasp the challenges of projects that involve different chemistries is impressive.

As part of a dynamic CMO team, I also acknowledge the fact that the advantage of internal collaboration that exists at pharmaceutical companies is far more attainable than what usually exists between the pharma company and the CMO. The opportunity for impromptu meetings and easy accessibility at one location is a decided plus. The addition of CMO support makes collaboration more challenging but not impossible, especially when considered at the beginning of a project, when the pharma company brings the internal and external collaborative team together. The goal is to present a true vision of the project, attempting to show each party how and where their responsibilities apply. It’s easier to see how this understanding continues when collaboration is all under one roof; it’s much more difficult when you are somewhat out of the loop (as the CMO team members often are). And it is perhaps harder still for the pharma sponsor to understand that the CMO really needs to know everything about the project, not only at the onset, but also at every step of ongoing development as the project evolves. This knowledge is mandatory if the CMO is going to bring passion and excellence to its work.

In the final analysis, it’s all about the level of communication at project initiation and during its life cycle. Personal meetings between the pharma company and the CMO are important, at the very least during that initial meeting. Teleconferences and emails just don’t seem to foster meaningful communication and unity. The most important thing to remember is that open communication is a two-way street; neither side can expect success if they withhold information that is critical to the project.

Talking it through also overcomes some of the negative attitudes that come into play when the CMO is judged by the location of its resources. Many have a built-in preference for U.S. or European facilities as opposed to capabilities in China or India. It’s wise to remember that competencies and quality systems are only as good as the people who oversee them and only as strong as the company culture demands, regardless of location. In this regard, personal dialogue from both the eastern and western perspectives can be a good indicator of where the cultural emphasis lies and how effectively the business relationship will evolve.

Communication is also an important factor in evaluating potential partners, from both the pharma and CMO sides. Thorough evaluation is critical before you begin a collaborative process. Much depends on the stage of the program when the relationship commences. At the preclinical and IND toxicology phases, a look at the scientific leadership of the CMO is important, gauging their flexibility and the fluidity of their approach can speak volumes about potential success. A tell-all for the pharmaceutical company’s appropriate selection of a CMO may be the CMO’s response to how they set the retest for the first batch. Alternately, from the CMO’s perspective, a careful appraisal of what’s behind what they are being asked to do is a good indicator of performance expectation and may also suggest the challenges they are likely to encounter.

Although sometimes difficult to establish, a word of mouth recommendation is helpful in choosing a CMO. It should be remembered that while it is difficult to build a reputation for excellence, just one unpleasant occurrence can destroy a company’s good name. That’s why it’s so important that an open and honest relationship be nurtured between the pharma company and the CMO, not only for the CMO but for the pharma company as well.  It’s the only way to avoid obstacles and to resolve difficulties that may inadvertently occur. Recognition of the CMO as a true partner who takes pride in the work he/she does can nurture a climate of trust which in turn can lead to better collaboration. Talking about misconceptions early on in the process is a good idea, and addressing them as they surface clears the way to the best outcome for both parties.

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