Quality Agreement Dictates Price in Manufacturing Relationships

The survey was undertaken as part of the GPCM (Global Pharmaceutical Contract Manufacturing) Event held in London, UK this week involving delegates from a number of pharma firms, small and big discussing practices in selecting a third-party manufacturer.

The most important criteria - selected by 80% of the attendants - was ensuring any potential CMO (contract manufacturing organization) was accredited and adhered to GMP.

Equal first on the list was the assurance that the company has suitable technology and scientific capabilities.

Price only came in third, being selected by less than half – 45% - of delegates and, according to Chairman of the meeting Jim Browne (ex-Director of External Supply at GlaxoSmithKline), showed evidence that budget played second fiddle to “the bigger more important figures.”​

This was further backed-up by Lidia Stappaveccia, Technical VP of Italian CMO Orofino, who also spoke at the conference. In an order of client priority she confirmed quality came out on top. This was followed by assurance of supply, service, innovation and finally cost.

However, Stappaveccia did admit that for some customers enquiring with Orofino cost is, sadly, “sometimes the first.”​

But the factor that actually establishes the cost, she continued to say, is the Quality Agreement itself, based on the actual technical capabilities and manufacturing process, and thus price cannot be a primary criteria for a firm looking for a manufacturer as it is a consequence of the quality offered by the CMO itself. 

Furthermore, Browne added that for a CMO “GMP has to be a certain standard and there has to be a certain number of technical capabilities otherwise you are not on the list.​

“The bigger issues are just starting points before cost becomes a more important factor.”​

The next important criteria, according to the survey, was a history of working together, followed by the CMO’s reputation, collating 30 an 15% respectively.

Communication Challenges​

Delegates were also asked what the biggest challenge was in the management of a third-party relationship.

At 65%, the issue of building trust was deemed the biggest challenge, though communication problems came in a close second.

Further discussion revealed both pharma firms and CMOs themselves had suffered from communication issues, covering a wide range from language barriers and poor telecommunication lines, to a complicated personnel network within large pharma issuing conflicting orders to the manufacturing partner.