Survey Examines Trends in the Outsourcing Relationship

The BioPlan Associates 8th annual survey identifies key outsourcing concerns of sponsor companies and contractors.
Oct 01, 2011
Volume 24, Issue 10

Eric S. Langer
As outsourcing and offshoring become part of mainstream operations, biotherapeutic developers are more effectively modeling and assessing the value delivered by their outsourcing partners. As such, they are expecting increasingly more value and efficiency from their partners' services. Companies are more aggressively incorporating outsourcing as a manufacturing strategy, rather than as an ad hoc method of adding flex capacity or to simply eliminate overhead costs associated with lower-value production activities. As a result, choosing the ideal CMO is taking on greater importance.

Survey methodology
With this in mind, BioPlan Associates researched key problems of the CMO–client relationship that may be inhibiting productivity. In this year's 8th Annual Report and Survey of Biopharmaceutical Manufacturing Capacity and Production, we identified 20 problem areas and discovered that nearly 95% of biodevelopers are concerned with their CMO's timeliness (see also, the sidebar on "Survey methodology")(1).


Figure 1: Critical attributes (ranked as "very important" and "important") of a CMO as identified by biopharmaceutical manufacturers when considering outsourcing (2011). (ALL FIGURES ARE COURTESY OF THE AUTHOR)
The BioPlan survey, which received responses from 352 global biomanufacturers, asked respondents to identify the critical issues they face when considering outsourcing biopharmaceutical manufacturing to a CMO (see Figure 1). Respondents said their number-one concern is that the CMO "stick to a schedule," with 93.2% of respondents indicating this attribute as "important" or "very important." The concern surrounding this attribute may reflect the difficulties in managing complex projects in an environment where timeliness is crucial. In biologics, manufacturing delays can affect an entire drug-development program.

When analyzing the "very important" responses to the survey, only the "comply with my company's quality standards" choice (59.1% of respondents) beat out scheduling problems. In other words, while scheduling issues are generally "important" to almost all biomanufacturers, quality standard compliance is "very important" to more than half.

Continuing to sort by "very important," the next critical attribute, according to respondents, was "protect intellectual property," which approximately 57% chose. Biomanufacturers expect that their product-specific manufacturing operations will be kept proprietary, and this concern may be the result of the increased focus on outsourcing of operations to new destinations. Even so according to Dr. Wolfgang Noe, a senior consultant at BioProcess Technology Consultants, this expectation should not be a large concern because any CMO that violates IP practice is not likely to be in business long (1).

Following IP concerns, survey respondents in the "very important" factor area said a CMO's ability to "effectively handle cross-contamination issues" and to "stick to a schedule" were next on their list of critical factors. This trend aligns with the 2010 survey results in which sponsors demand greater levels of professionalism, performance, and effectiveness in both managerial and technical areas from their outsourcing vendors (2).

Figure 2: Critical attributes (ranked as "very important") of a CMO as identified by biopharmaceutical manufacturers when considering outsourcing (2006–2011).
Contrary to anecdotal commentary from both CMOs and sponsors, the importance of a CMO's location showed up as being relatively unimportant (2.3% of 2011 respondents say the factor is "very important," as opposed to 10.4% who said so in 2006) (see Figure 2). This decrease may be a function of the industry's increasing globalization, particularly with respect to manufacturing clusters appearing in Asia. These clusters in aggregate, according to BioPlan's Top 1000 Global Biopharmaceutical Manufacturing Index, rival those of Europe in terms of number of facilities, if not in overall concentration of manufacturing (3). The lack of concern shown for location also reflects the offshoring of greater numbers of successful production projects and the degree of outsourcing-management expertise that sponsors are acquiring.

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