Biopharmaceutical Contract Manufacturing: Contractor Selection by Market Segment - When a biopharmaceutical company pursues an outsourcing strategy, the choice of a contractor is a critical and strate

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Biopharmaceutical Contract Manufacturing: Contractor Selection by Market Segment
When a biopharmaceutical company pursues an outsourcing strategy, the choice of a contractor is a critical and strategic decision.


BioPharm International Supplements


"In my experience, if you ask a contractor if they can do something they say 'yes' a lot even if they have never done it before or don't have the equipment. There are often gaps in a contractor's capabilities. We look to see if they have done a product similar to ours. We are not interested in being a beta test site for a contractor. We want to talk with former customers and see if they were happy with the contractor's work. Cost is generally a non-issue for us. All of the contractors tend to be similar in cost, or at least within a two-fold range. Just as no two people are the same, no two contractors are the same. I have never done an evaluation and said that 'two contractors are exactly the same, let's flip a coin.' If they were similar in our four top criteria then we would look at availability and cost."

"Experience is the most important because if it is a new or inexperienced contractor, they're going to go through the growing pains with you and we don't want that."

"The experience of having delivered multiple products, having a good track record, is what we look for. We know from our own experience that this helps, particularly in early phase development. If all criteria fit, it would probably be a gut-level feeling. When you meet people you form a gut-level feeling of how comfortable you are with them, and it is worth listening to this. Price would be next on the list. It isn't at the top because, based on our own experience, it is more important to have the project done well and delivered in a reasonable timeline."

Reputation

The reputation of the contractor goes hand-in-hand with its level of experience. The manufacturing directors evaluate the reputation of the contractor for producing a quality product and to solve unforeseen problems as they arise. Contractors having experienced staff, who can provide the requisite technical knowledge to solve a problem, are preferred. Reputation also includes the experiences that other biotechnology companies have had in dealing with the contractor on a quality and commercial level. Reputation is especially important because the directors usually find potential contractors through networking, word-of-mouth, and personal history. As mentioned by one director from a pharmaceutial/biotech company:

"Networking is by far more important than anything else. We really rely on references about who did a good job."

Quality and Regulatory History

The other two top-ranked characteristics mentioned to a lesser extent are quality and regulatory history. It is interesting to note that none of the directors at the small firms mentioned price as a top criterion when choosing a contract manufacturer for their project. However, price does become an important criterion for choosing a contractor after other essential characteristics are satisfactory.


Figure 2. In this study, the selection criteria were ranked as high, medium, or low based on their importance. For example, quality, along with experience and reputation, are the most important characteristics sought by directors of larger firms.
The essential characteristics sought from a contractor by the directors at large firms are slightly different than those mentioned by those at small firms. An overview of the essential characteristics sought by large firms from a contractor is shown in Figure 2. While the contractor's experience and reputation is an important consideration, the contactor's quality and quality systems are equally important for the directors at large firms. Regulatory history, however, is not a top criterion for evaluating a potential contractor.


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