In pharmaceutical contract manufacturing, outsourcing your product to the right Contract Development and Manufacturing Organization (CDMO) can be a daunting and concerning task. After conducting the legwork of determining the best fit for a CDMO from capabilities and organizational fit perspective, the next step is working with that vendor on determining costs. Generally speaking, there is a ton of preparation work that goes into creating the Request for Proposal (RFP). Ultimately as a sponsor, the completeness of your RFP will determine the quality of the vendor proposal and the project cost that you will receive. The more complete information you share with the vendor, the more accurate the proposal and costs will be. The scope of the project is determined by that RFP along with the costs of doing that work.
Changes in Scope result in Change Orders
Unfortunately, changes in scope occur due to issues during development/transfer, sponsor revisions, market forces, and other unforeseen issues resulting in the creation of change orders (COs) to capture that change in scope. Therefore, change orders are inevitable. But having an initial strong and clear project scope from the start will help reduce initial change orders in your product’s tech transfer. Here are a few things to consider reducing the likelihood of initial change orders and their impact on cost.
Be careful, accurate, and set realistic expectations
Over the years, sponsors have told us of certain scenarios that have occurred when working with a new contract manufacturer.
Scenario #1: a vendor may underbid on a proposal and rely on initial change orders to receive additional revenue.
Scenario #2: a sponsor has a project budget they have to stick to, so they tell their vendors to trim down the project scope to fit within that budget.
Scenario #3: a sponsor hasn’t clearly thought through all the aspects of the technology transfer including completeness of method development, scale-up equipment, stability, etc.
All of these scenarios will likely result in initial multiple change orders. So how can you prevent or reduce these change orders? You, as a sponsor, should be thoughtful and accurate with your request, be leery of “lowball” quotes, and have realistic expectations of the cost to transfer a project.
Transparency and communication are key
Once an RFP is received, your vendor will generally ask more clarifying questions, seeking additional information or supporting documents so that they can provide an accurate proposal reflecting the costs. Transparent communication with your vendor and their needs will pay off because they will be able to better assess your project scope more accurately and effectively.
For example, if your project scope requires analytical method transfer but your current methods are not validated, it’s best to request for your project to include an analytical method validation instead of a transfer. Although the cost may be higher, you will receive a more accurate price and timeline if you are clear and transparent with your project needs.
Collaboration during the RFP contract development stage
You may have a specific batch size in mind, but some contract manufacturers may not have the equipment to scale your product at that specific size. The subject matter experts (SMEs) may provide alternative batch size, process optimization or campaigning options to accommodate your needs. If both parties can agree on the recommended solutions during the RFP contract development stage, it will prevent any change orders due to batch size change.
One final thing for consideration is that sponsors should realize that change orders are inevitable since the technology transfer process is not a fully forecastable science. Unforeseen issues will arise, and market forces may change but change orders can be reduced by providing as much information during the RFP stage right at the start. This will decrease the likelihood of initial change orders. Also, getting it right at the start provides additional benefits such as a clearer budget plan, a more reasonable and reliable timeline, and greater trust resulting in a strategic partnership with your vendor.
