CDMOs Bring Speed And Cost Savings To The Table

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A round table discussion with Anil Kane, Executive Director and Global Head of Formulation Sciences, Patheon; Robert Fry, Chief Economist, Robert Fry Economics, LLC; Paul Nelson Vice President of Supply Chain and R&D, Amring Pharmaceuticals; Doug Johnson, President, OCAM Solutions, Inc.

As drug developers face the ever-pressing need to get molecules to market as efficiently as possible, firms large and small are increasingly turning to CDMOs for help. The CDMO industry is evolving to meet this need, spurring some larger providers to offer forward-thinking services in the form of end-to-end supply chain models for pharmaceutical and biopharmaceutical clients.

At a panel discussion held at CPhI North America 2017 in Philadelphia, four industry experts discussed how working with a single-source CDMO partner can accelerate time to market, add cost savings, and improve a formulation’s chances of achieving regulatory success.

Speed And The Single-Source Model

According to Anil Kane, executive director and global head of formulation sciences at Patheon, speed is essential in drug development. Patients need their medications, and competitors are vying to get their products to market first. Working with even more compressed timelines are firms racing toward commercialization with life-saving therapies that have fast-track status. Likewise, small biopharmas deal with incredible time pressure as they function in a market-driven environment.

Unfortunately, a multi-vendor approach often adds more time and effort than many firms would like. Drug developers need to negotiate numerous vendor contracts, complete technology transfers, conduct revalidation, and complete other time-consuming tasks.

Compare this approach to a single-source vendor option, which has the unique ability for both drug substance and drug product teams to collaborate from development through commercialization, representing a major shift in the drug development world. Aligned services in end-to-end supply chains include the development and optimization of drug substances and products; the manufacture of supplies in batch through commercial sizes; clinical and commercial packaging; supply chain management; and more.

Because cross-team collaboration allows for real-time feedback about both the drug substance and drug product, one can move efficiently from an API to a drug product with fewer errors. Potential problem areas (like poor solubility, bioavailability, or process-ability) can be worked out before the process is scaled up. If formulation problems are caught in early development phases and work is completed to understand the molecule and its characteristics, developers will benefit from more robust process development that avoids costly and time-consuming “re-dos” during scale-up.

Other timesavings that surface when all aspects of a project lie with the same vendor are those associated with external technology transfers, vendor qualification, negotiations, and follow-up. All these activities are eliminated on the client end. According to one CDMO, its trademarked single-vendor network “eliminates 8–12 weeks of development time for small molecules and 14–20 weeks for large.”i

While the single-source CDMO option may well be a forward-thinking approach in the world of pharmaceuticals and biopharmaceuticals, there is a strong precedent for it in other manufacturing sectors. For instance, Robert Fry, chief economist at Robert Fry Economics, LLC, explained that Toyota’s lean manufacturing model limited the number of suppliers it worked with so that the carmaker could produce new models much faster than its competitors.

Breaking Down Barriers: Communication In A Single-Source Model

A single vendor offers access to a network of experts across several disciplines who can share knowledge about a project as a molecule moves from phase to phase, thus helping to ensure it stays on a path toward commercial success.

Paul Nelson, vice president of supply chain and R&D at Amring Pharmaceuticals, offered an example of how having such knowledge through a single vendor could have benefited a recent R&D project he worked on. Several molecules in his pipeline had development work completed in India while the manufacturing activities were conducted in France. The project came to a halt after the first pilot batches were made poorly. An investigation was launched to determine the source of the problem, probing the possibility of a development issue, tech transfer problem, manufacturing issue, or something else. The time-consuming process caused a significant delay.

If the development and initial manufacturing work had both been done by a single vendor, the problem may not have occurred. But if it had, the open channels of communications that a single provider offers would have made identifying the root cause of the issue much  easier.

Doug Johnson, president of OCAM Solutions, Inc., adds that communication in a single-vendor network helped fix a major problem his client had with an API. Had the client used multiple vendors, resolving the issue would have required breaking a commitment with one manufacturer and starting a new contract with another vendor. Rather, the single-source vendor was responsible for figuring out how to remedy the problem with the API because it was their work to begin with.

A single vendor with involvement in a project from soup to nuts has a unique opportunity to help their client by integrating information that is generated from all points along the project continuum. “A single vendor can leverage expertise typically stashed in silos across different stages of the process, from API development to formulation and the supply chain,” noted Kane. For example, in the Patheon OneSource model, a single program manager oversees all activities, and bridges various teams and sites performing the work. Having a program man- ager so close to the client and the operations brings efficiency and speed to the process.

Nelson agreed that this type of program management strategy can be key to a project’s success. Decisions on sourcing of API development and subsequent manufacturing are usually made before an application for regulatory approval is filed. Many companies do not have the coordination needed to determine where final commercialization will be done at the time they are getting ready to file. A program manager can facilitate good coordination and look at the value stream that cuts across all business units and functions.

Due Diligence: Selecting The Right Partner

When helping pharma clients evaluate single-source vendors, Johnson said he looks for four must-have characteristics: capability, flexibility, stability, and caring.

  • A variety of capabilities are essential for helping to improve a process and elevate a compound from early-stage work through commercialization. When trying to make a good match between what a client is looking for in an outsourcing partner and the CDMO’s capabilities, Nelson added that the process is as much an art as it is a science. Several CDMOs may all have similar equipment, but what really differentiates them are the dedication and knowledge of the individuals working on the projects. Is that know-how and capability embedded in the organization? In some cases, clients have been burned by the claim that an outsourcing partner had competencies in areas it did not.
  • Without fail, unexpected twists and turns will surface during drug development. A CDMO’s flexibility is critical, especially in early phases. Firms should have the dexterity to address unanticipated problems quickly and adjust.
  • The vendor cannot simply provide a service; they must have a track record of providing services well. CDMOs ted to acquire other companies with expertise in a specific area. A single-source vendor must also be reliable and stable—fiscally and in terms of longevity, all while putting out high-quality work.
  • Larger CDMOs may be working on hundreds of projects simultaneously, but a good partner also ensures every client receives the attention it deserves.

If a client pays more to have these four elements in a single provider, Johnson said it is money well spent in exchange for time saved and a better end product.

Streamlining From The Start: One Vendor, One Contract A key advantage of the single-vendor network is that clients will only have one contract. Having to negotiate contracts and legal agreements with multiple vendors requires a lot of time and energy — even if just two suppliers are involved. Nelson said he has seen contract negotiations between two vendors working on the same project take as long as 18 months to finalize. This, of course, takes time away from doing more valuable tasks, thus the single-source provider is far more efficient in this respect.

When negotiating a contract with a single supplier, it is critical to get the language right. From the stance of an economist, Fry said incentives must be balanced such that both parties benefit from doing the right thing. It is crucial to consider all contingencies and to cover all the bases. For example, is the client protected if the price of raw material sharply increased?

Nelson noted that risk management is also important when looking at an end-to-end supply chain. There is economic risk, the change of a supply interruption, and even location risk, for instance, if the vendor is in a hurricane zone. All types of risk must be examined to build the best risk-management strategy.


Like any new technology, some pharmaceutical companies are still hesitant to adopt the single-vendor sourcing model, especially small, emerging firms. While some companies are taking a watch-and-wait approach to see how the single- vendor concept pans out, those that are already embracing   it  are  reaping  the  benefits of  efficiency and expertise.


i  Patheon OneSource™,, accessed June 1,  2017.

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