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Exclusive Life Science Feature For products in Phase 3 with good commercial potential, James says having more than a single supplier is absolutely essential. Ideally, the company will validate a second CMO with the prod- uct's NDA or as soon after NDA approval as possible, even if the volume is split as much as 80/20 between it and the primary sup- plier. Beyond the backup potential, secondary suppliers also make commercial sense, says James. "What happens if the product takes off and your sales are three times what you were expecting in projected volume?" Backups for the CMOs themselves may prove still more impor- tant, he observes. In an example from his pharma outsourcing days, he describes how his company lost three big CMOs for a key product when the raw-materials supplier they all shared suddenly went out of business. "At least dig into their supply and under- stand your hidden risk." REACTION MODE Despite all steps to prevent the problem, or for lack of them, your CMO may still get into regulatory trouble, starting with a surge in 483s and ending in the worst case with a production shutdown. What then? Most would agree with James's advice, at least in theory: "The most important thing to do when your CMO gets a list of 483s is to take it seriously and deal with it," he says. "The CMO will have to develop and implement a corrective action plan. That plan should be laid in conjunction with the affected sponsor(s) and their manufacturing consultants or auditors. Most of the problems can be easily corrected — not to say cheaply. But the main thing is to head it off before you get a warning letter." Remediation projects usually involve preap- proval inspection (PAI) audits of the production facilities, which are usually even tougher than FDA inspections, according to James. "Sponsors unfortunately want to see the bright side and will sometimes miss details, and unless the com- pany is a giant pharma, it probably doesn't do a lot of audits. It is not uncommon for a biotech/ mid-size company to send in one or two people for one to two days, and you can't really catch everything in that short period." A set of basic steps to follow in most 483 and warning-letter events appears in the side- bar, "Your To-Do List." The steps follow from the experience of James and others, including Janssen, all of whom faced serious consequenc- es with CMO-related problems. Two other sidebars, "The Trouble With Doxil" and "Does The CMO Apple Fall Far From The Branded- Parent Tree?," draw specific lessons from how those companies and their suppliers dealt with the crises. The CMO Leadership Awards 2012 25 James summarizes the options you must consider: "If it does come to the point where either your supplier is exiting or if you decide to leave them, that's when it gets expensive and that's why you see a company sticking with a supplier longer than it should have, perhaps, in retrospect. If you're lucky enough to have a secondary supplier, hopefully you can move on with it quickly. But if not, you have to weigh the cost and delay of switching to another one versus the prospect of wait- ing for your current supplier to fix the problems. Even if you move to a backup supplier, you need to bring in another backup supplier to back them up, as well as a backup for any suppliers of raw materials and so on needed for production." Still, says James, prevention always costs less than a cure — and for the pharma company, prevention of CMO regulatory problems begins at the top. CEOs too often delegate quality management to the Quality group and never get involved in CMO issues — thus setting themselves up for nasty surprises. But top-management involvement is essential to support bud- geting for adequate auditing and monitoring beyond the nar- rower scope of QA teams. Message for the CEOs: If you don't understand why you should spend money on prevention, you need to learn about the risks of being unprepared.