Dispatches from the GPCM Conference, London, UK
For big pharma, ten is the magic number of CMOs says ex-GSK Director
Whilst the formation of strategic partnerships between pharma and contract research organisations (CROs) is a well established trend, on the manufacturing side third-parties are often deemed more as operational service providers, proving disposable with short-term contracts, the Chair of this year’s GPCM Conference in London Jim Browne said yesterday.
Browne, director of JTB Consulting, told delegates in his previous role as Director of External Supply at GlaxoSmithKline the Pharma Giant had hundreds of contractors globally, which was an “unacceptable” amount to manage efficiently.
With a continuing trend to outsource manufacturing, “most Big Pharma companies have the desire to move to strategic partners,” he said. “You don’t want to be managing a global network of over 400 contractors, you would ideally want to be managing a network of ten big contractors who have multiple sites.”
Using central contracts, these strategic CMOs can provide facilities, dose forms and products from a number of different locations, he continued, rather than the typical short-term contracts that are either renegotiated on price every three years or lead to pharma using a new CMO.
“That’s where I think most big pharma companies would like to go. You have people with whom you are aligned, who have similar values, and who will be mutually beneficial in terms of the long-term picture.”
One of the largest CMOs, DPx (formed through the merger of Patheon and Royal DSM’s pharmaceutical product business), told this publication in March strategic partnerships would be an important areas in the CMO industry going forward.
The firm has also attributed strategic alliances to the turnaround of a UK plant which won a long-term contract to make Pacira’s analgesic drug Exparel in April.
Comparisons with Food Industry
Browne’s comments reflected those of Steve Hills, the European Contract Manufacturing Director for global giant PepsiCo who, in a rare cross-industry talk, spoke of the similarities between the food/beverage and pharma industry regarding use of third parties.
PepsiCo currently has three suppliers it classes as strategic partners in Europe, but Hills said the firm is “on a journey to develop more from both [the firm’s] existing base of suppliers and from others coming aboard in the next few years.”
However, though PepsiCo and pharma may follow similar strategies, timelines differ.
Hills said the beverage firm is sometimes able to shift production to a new supplier is as little as seven days whereas - according to Browne's earlier comment - transferring a pharma product to a new manufacturer usually takes a minimum of 18 months due to regulatory demands.
One pharma company who has taken an alternative route is Valeant, with Senior Director of GMP and QA Compliance Robert Sparadoski speaking recently at another industry event of its management of over 800 CMOs.
However, whilst the firm describes itself as a “virtual company,” having no manufacturing facilities of its own and relying entirely on third parties, it seems to be a unique concept in the industry with delegates yesterday in concurrence that pharma should be reducing its external partners.