Technology Transfer: How to Make It a Competitive Advantage

Published on: 
BioPharm International, BioPharm International-11-01-2006, Volume 19, Issue 11

If a company wants to reduce costs, it should consider outsourcing some manufacturing and analytical testing to low-cost sites.

To survive in the increasingly competitive pharmaceutical industry, many players are boosting their in-licensing activities, consolidating manufacturing networks, and outsourcing production to less costly third-party manufacturers. These strategic initiatives require effective technology transfer—smoothly moving technical knowledge, processes, and analytical requirements between the different parties involved. Technology transfer also affects companies' ongoing operations—from research through commercial production. It underlies all key development and manufacturing activities needed to successfully bring a product to market (Figure 1).

Despite the strategic role that technology transfer plays in today's industry, it often does not get the attention it deserves. Many organizations manage transfers as isolated, nonstrategic events involving little more than a procedural exchange of process documents between sending and receiving parties. But without repeatable, scalable processes, companies are forced to reinvent the wheel each time technology changes hands. This leads to a variety of inefficiencies, such as suboptimal allocation of resources, extended cycle times, higher development costs, and quality and compliance issues.

Figure 1. Technology transfer from research through commercial production

Companies should treat technology transfer as a key lever of their operational strategy and establish a comprehensive approach to ensure ongoing best practices. Generally, companies that have mastered technology transfer manage it proactively as a core competency of strategic importance. By integrating their processes and technologies from early development through commercial production, these firms are well ahead of the pack in cycle time, cost, and quality performance. Some best-in-class companies, for example, have reduced transfer cycle times by at least 20% to 30% through eliminating redundant activities. Cost reductions have ranged from 50% to 70% with improved alignment of processes and elimination of redundant activities. Quality improvements have resulted in fewer compliance problems identified during health authority inspections: fewer questions regarding chemistry and manufacturing control elements, fewer inspection days, and fewer FDA-483 observations. Moreover, validation runs for API, formulation, and analytical methods have been successful on their first attempt—eliminating the need for repeated runs to validate the processes.

Quick Recap

Some companies still regard technology transfer as a merely tactical procedure. To start changing this corporate mindset, it is necessary to build a clear consensus on the value of technology transfer: Can it help expand global reach? Can it increase knowledge and utilization of new technologies and process capabilities? Does it provide access to additional manufacturing capacity and low-cost manufacturing options outside an existing network? By explicitly articulating the broad value proposition, management can elevate the importance of technology transfer in the organization and establish a corporate-wide approach to technology transfer.

Figure 2. An integrated approach to technology transfer

One approach for implementing a successful technology transfer is to integrate strategy, organization, and processes both within and across organizations (Figure 2). The key building blocks of this approach include:

  • Well-defined product development and transfer strategy

  • Proactive decision-making through executive sponsorship of projects

  • Standard performance measures for functions, processes, and teams

  • Leading-edge process guide-lines, project management tools, and document templates

  • High-performance, cross-functional teams.


A comprehensive technology-transfer strategy has two primary purposes. First, it aligns technology transfer with broader corporate strategies and ongoing business operations for managing product life cycles. Second, it guides where investments should be made to ensure adequate process and organizational capabilities to support future product development efforts.

Like any good strategy, technology transfer should be customer-focused. This helps to align the requirements of the receiving site, such as timing objectives for scale-up and transfer, with the sending site's processes and capabilities. Customer orientation also helps ensure alignment of regulatory requirements and filing strategies.

To enhance the efficiency of transfers and minimize the risk of late-stage site changes, the two parties should be well matched to begin with. Successful companies strategically select sites to match their product's technology, process, and capacity requirements early in the development process. If a company wants to reduce costs, it should consider outsourcing some aspects of manufacturing and analytical testing to suitable low-cost sites. If it is transferring products that require novel equipment and technologies, it should consider early transfer of processes and methods to eliminate the risks of post-filing lot failures. And if a company anticipates that the demand for the product will increase significantly, it should choose manufacturing sites with upside capacity to avoid more transfers in the future.

Figure 3. Overview of technology transfer stages

Consider the example of a generics pharmaceutical company that wished to cut costs by consolidating its manufacturing base, transferring production to lower-cost locations, and improving its capacity utilization. After evaluating its options, the company decided to transfer its US manufacturing operations to two European sites. The challenge was formidable: how to transition the manufacturing of some 40 molecules—roughly half of the company's entire production volume—across the Atlantic to sites with different operational practices and culture, and little familiarity with FDA regulations? Neither the US facility nor its European counterparts had much experience managing complex transfers or expanded supply chains.

To meet this challenge, the company adopted a holistic approach. First, its board of directors established cost-savings objectives for the transfer. A steering committee, consisting of senior executives from the sending and receiving sites, was formed to determine the operating budget, resource requirements, capital investment, and timeline for realizing the cost savings. The committee helped frame the overall operational strategy, including transfer sequencing, risk mitigation, and process changes.

The transfer sequencing and prioritization strategy called for an early transfer of high-volume, high-cost products to cut costs early and ensure dual capacity at sending and receiving sites to prevent supply disruptions. To reduce the probability of unexpected technical problems down the line, the steering committee formulated a risk-mitigation strategy focused on transferring the most challenging drug potencies of a product first. The less-complicated potencies could then be transferred faster by leveraging process synergies and lessons learned from earlier transfers. In addition, the project transfer teams established guidelines to capture significant process improvements following the initial transfer. This approach was designed to ensure that no major process changes were made during the transfer, allowing the company to file a significant number of products with CBE-30 status. This status helped to accelerate the health authorities' review process and, ultimately, had the potential to reduce the time for approval of commercial manufacturing from nine to 12 months, to just one month. To implement the new operational strategy, the project transfer teams created a detailed implementation road map.


Typically, technology transfer occurs during one of five stages in the product's lifecycle: molecule discovery, toxicological evaluation, clinical development, scale-up and commercial manufacturing, and in-line production. Each stage involves a different type of transfer, rationale, and key participants (Figure 2).

Each stage also requires a road map to translate the transfer strategy into specific activities, to define the timing, sequence, and dependencies among these activities, and to identify the stakeholder responsibilities and deliverables.

This transfer road map consists of good-practice guidelines and comprehensive templates that integrate the concurrent transfer work streams of drug substance, drug product, analytical methods, and packaging requirements. The key activities for each of these work streams are aligned with good laboratory practices or current good manufacturing practices to ensure consistent and controlled manufacturing of a high-quality product. In addition, there are specific activities to address program management, documentation, and site readiness requirements. The road map is then customized to address health authority guidance based on filing and launch strategies.

The road map helps to optimize these transfer work streams and activities by:

  • Addressing potential manufacturing equipment and processing constraints in the initial process design stages

  • Ensuring that only the necessary transfer activities will be executed to avoid interfering with new product launches

  • Managing compliance and regulatory activities

  • Allocating assets more efficiently to support both ongoing production and transfer activities

  • Establishing integrated plans (key activities, dependencies, inputs/outputs, and deliverables) between the sending and receiving parties.

In the absence of such a road map, companies often grapple with technology transfer issues long after development work has been completed. Consider the example of a large biopharmaceutical organization that so far had treated its technology transfer haphazardly. As a result, the company had run into many problems, including delays in the launch of new products, suboptimal product cost structures at launch, unpredictable project timelines, and inconsistent use of resources across projects. Facing a burgeoning product development pipeline on the one hand and severe capacity constraints on the other, the company's management made technology transfer its strategic priority.

The effort paid off. After the company implemented an integrated, scalable technology transfer methodology, it achieved significant improvements in cycle times, process yield, first-time transfer success rates, and production costs. Moreover, it was able to keep technology transfer projects off the development critical path. This way, materials (e.g., clinical supplies and launch materials) were always on time for trials and new product launches. Additionally, the company's internal staff became significantly more efficient: for example, it initiated three new projects without the need for additional hiring.


In addition to a sound strategy and road map, the right transfer organization will help to ensure successful implementation. This is particularly important as transfer activities expand and become more complex. Managing the growing number of variables (locations, operational practices, different priorities, varying incentives, etc.) requires a robust governance and organizational structure. The hallmarks of such an organization include: cross-functional executive governance to facilitate rapid, informed decision making; clear functional roles and responsibilities; an effective team to drive transfer execution and knowledge transfer; and relevant performance metrics.

However, in a rush to begin execution, companies often do not take the time to establish the right capabilities up front. The symptoms of inadequate organizational capabilities include ineffectual decision-making, limited involvement of senior management, misalignment of transfer expectations, fuzzy roles and responsibilities, poor measures of transfer success, delays in transfer, and loss of knowledge between sending and receiving sites. Ultimately, these organizational shortfalls cost the companies dearly in lost revenue due to delays and rework.

Take, for example, the case of a large pharmaceutical company with multiple early-development sites supporting downstream development. Faced with mounting fiscal pressures, the company needed to increase productivity between its early- and late-stage development activities. Moreover, the company was experiencing increased development timelines because of delays in downstream development. This was caused by corporate incentives to accelerate compounds through the early stages of development without the appropriate level of rigor given to develop robust processes.

The company's existing technology transfer practices were not helping. In fact, they were contributing to poor use of resources, misalignment of expectations and incentives between sending and receiving groups, and inability to consistently meet the needs of downstream development. In addition, the processes being transferred were neither easily scalable nor economical for long-term support, and the process knowledge was poorly documented.

In response, the company's management established a dedicated technology transfer organization to determine transfer needs of all key stakeholder groups and to formally manage transfer activities. The new transfer organization consisted of representatives from diverse groups: regulatory, quality, clinical, pharmaceutical sciences, marketing, and commercial manufacturing. It defined value-added activities and deliverables, established cross-functional transition teams that represented both send and receiving sites, identified hand-off points, established responsibilities, and formalized performance measures. Ultimately, the transfer organization provided a much clearer view of accountability for transfer activities across early- and late-stage development, along with a better alignment with stakeholders and decisions makers. In addition, the organization established a formal feedback mechanism to drive continuous improvement and increase the efficiency of subsequent transfers.


To survive in the increasingly complex and competitive pharmaceutical industry, companies must maximize their full arsenal of capabilities, using both internal and external resources. Technology transfer provides companies with efficient access to external technology and knowledge, enables them to achieve global reach, and allows them to optimize their own resources. Achieving transfer success during the first attempt is particularly important because it saves money. Early success also helps companies mitigate the risk of supply interruptions, it gives them prompt access to low-cost manufacturing, and reduces companies' regulatory compliance risk. It also helps them meet aggressive filing and launch targets.

However, to implement technology transfer successfully is challenging—even within a single organization, let alone across companies, geographies, and cultures. The benefits of a holistic best–practice approach are well proven. Considering the size of the prize, changing the organization's mindset and behaviors takes a lot of effort—but is well worth it.

Scott J. Mahoney is a principal at PRTM Management Consultants, 1050 Winter St., Waltham, MA 02451, 781.434.1351,

Anser F. Qureshi is a manager at PRTM Management Consultants, Stamford CT, 203.905.5604,