Choosing a Pharmaceutical Contract Manufacturing Company

Written by Sudhriti M

3 July 2024

Pharmaceutical contract manufacturing is the outsourcing of the production of pharmaceuticals to third-party contract manufacturers. Outsourcing is beneficial for pharma companies, as it is cost effective and helps deliver the product in a timely manner. The contract manufacturing arrangement helps pharma companies to focus on other essential aspects of business. Thus, selecting the right pharmaceutical contract manufacturer is crucial for delivering high quality pharmaceuticals and regulatory compliance. A successful partnership is the key to success in the pharmaceutical industry. When entering into a partnership, it is vital to clearly establish terms, obligations, responsibilities, and agreements between two parties. In this blog, we have provided some tips for selecting a pharmaceutical contract manufacturing company. After all, the success of the drug in the market depends on the expertise and capabilities of the contract manufacturer.

Understanding the concept of pharmaceutical contract manufacturing

In the pharmaceutical contract manufacturing arrangement, usually two parties are involved. The pharmaceutical company is the client and the contract manufacturer is the other party. The pharmaceutical company has the ownership of the product formulation and intellectual property rights. On the other hand, the pharmaceutical contract manufacturing company is responsible for manufacturing the product. The contract manufacturer will manufacture the product according to the client’s (pharmaceutical company) specifications, requirements, and quality standards.

The types of contract manufacturing agreements are as follows: toll manufacturing, full-service manufacturing, and contract development and manufacturing organization partnerships. The pharmaceutical contract manufacturing arrangement has an important role in the pharmaceutical industry. This partnership allows pharma companies to leverage the expertise and capabilities of specialized manufacturers to produce high-quality drugs.

Evaluating the capability and expertise of prospective contract manufacturers

Pharma companies planning to outsource drug manufacturing will have to thoroughly evaluate the pharmaceutical contract manufacturing company. Prior to zeroing in on a particular contractor, the pharma company has to check whether the contractor will be suitable for its needs.

Based on references and input from industry experts, shortlist prospective pharma contract manufacturers. After shortlisting potential pharmaceutical contract manufacturing companies, gauge their expertise, level of regulatory compliances, and capacity. Moreover, consult legal and regulatory advisors about the pros and any potential cons of the partnership. Furthermore, conduct site visits to audit the contractor’s regulatory compliance level. Additionally, pharma company or the client should perform due diligence to understand the contractor’s capabilities, infrastructure, and client suitability.

Points to consider when establishing client–contractor partnership

  1. Negotiate contractual agreements
  2. Ensure intellectual property rights are reserved
  3. Evaluate the quality assurance and control measures. Notably, the contractor is required to manufacture the drugs per the client’s (pharma company) quality benchmarks. This a vital aspect of the partnership, as the reputation of the pharma company will depend on the quality of products being manufactured.
  4. Define key performance indicators
  5. Clearly establish the terms, obligations, responsibilities, timelines, and agreements
  6. Agree on how to proactively address potential challenges or issues that may arise
  7. Establish clear and effective communication channels between the parties

Points to consider when selecting a pharmaceutical contract manufacturing company

Experience, expertise, and suitability

The pharmaceutical contract manufacturer’s experience and expertise have to be evaluated. The track record of the contractor in manufacturing your product or similar products has to be checked. You need assess their technical expertise, capabilities, production efficiency and flexibility, and quality of equipment used. Additionally, you need to assess the proficiency of the team members. Furthermore, check their ability to scale their production capacity to meet your demands. Moreover, the suitability of contractor for your company has to be evaluated. Check whether the contract manufacturer has the specific provisions to manufacture your drugs.

Manufacturing capacity and capabilities of the pharmaceutical contract manufacturing company

This brings us to our next point considering the pharmaceutical contract manufacturer’s manufacturing capacity and capabilities. The manufacturer should have the infrastructure to handle your production requirements. Assess the equipment, technology, ability to fulfil the requirements of the client’s products, and small-scale or large-scale manufacturing capacity.

Quality standards

The quality standard of the contract manufacturer will influence the quality of your product, thereby impact your company’s reputation. Check whether the contract manufacturer has quality certifications, such as Good Manufacturing Practice (GMP) and ISO certifications, and regulatory approvals from relevant authorities. These certifications will indicate the contractor maintains high quality standards throughout the manufacturing process. Check whether the contractor regularly performs audits to verify whether its manufacturing process abides by all the industry quality guidelines.

Supply chain resilience and transparency

An efficient and transparent supply chain is vital for uninterrupted manufacturing and product supply. Assess the contractor’s supplier risk management practices and process of avoiding potential disruptions. Additionally, evaluate the pharmaceutical contract manufacturing company’s contingency planning for uninterrupted production. Furthermore, assess their visibility and traceability throughout the entire supply chain. Understand their method of tracking and monitoring materials, components, and finished products. 

Location of the pharmaceutical contract manufacturing company

Choose a contract manufacturing company located in close proximity to your distribution centres or target markets. This will help reduce shipping costs and transit times and streamline supply chain operations. Location of the contract manufacturer will influence transportation costs and logistics. Hence, check the location of the contractor.

Flexibility and adaptability to changing requirements

Choose a contractor who can accommodate modifications, scale production, and quickly respond to unforeseen challenges. A reliable contract manufacturing company should have the ability and flexibility to adapt to changing market dynamics and requirements.

Reputation of the pharmaceutical contract manufacturing company

Collect client references, case studies, and testimonials to understand the reliability and performance of the contract manufacturing company. Before partnering with a pharmaceutical contract manufacturer, it is important to be aware of the company’s track record and reputation.

Open and transparent communication

Check whether the prospective contractor quickly responds to and addresses your questions and concerns. Guage the contractor’s willingness to collaboratively work and ability to identify and quickly resolve any manufacturing, quality, or regulatory issues.

Cost and pricing

Cost effectiveness is an important factor to consider. However, prioritize the value of the partnership over price. Choose a partner with transparent pricing model and check whether the pricing structure is affordable for you. Instead of focusing only on initial expenses, factor in long-term gains, quality, reliability, and sustainability of the partnership.

Regulatory compliance

Compliance with applicable regulatory requirements is a non-negotiable factor to consider. Verify whether the contractor has any pending inquiries, observations, and warning letters issued against them by regulatory bodies. Check whether the pharmaceutical contract manufacturing company has an in-depth understanding of the applicable regulations. The contractor should be able to provide comprehensive documentation of regulatory compliance. Regulatory compliance is paramount to ensure drug safety, quality, and efficacy.

Forging a successful client–contractor partnership

Quality standards, reputation, manufacturing capabilities, regulatory compliance, and cost-effectiveness are some of the factors to consider when partnering with a contract manufacturer. Moreover, a pharma company (the client) should find a contractor who aligns with the company’s business goals and requirements. Careful evaluation, thorough research, and strategic negotiation are essential steps for forging a successful and mutually beneficial client–contractor partnership.

Setting clear goals, effective communication, collaboration, and performance monitoring and review are vital for the long-term success of this arrangement. Additionally, accountability and obligations should be defined at the very onset of the partnership. Furthermore, it is vital the contractor maintains transparency, quality standards, and regulatory compliance throughout the partnership. Challenges or issues that may arise should be proactively resolved by both parties. Thus, active initiatives and collaborations will strengthen the partnership.

Hence, choosing the right pharmaceutical contract manufacturing company suitable for you is vital. This will considerably influence your pharma company’s success, if you are planning on outsourcing manufacturing. It is important to note to successfully establish your pharma company, regulatory compliance is a must. However, pharmaceutical regulatory guidelines are confusing and can be difficult to decipher. Fret not! Our team of experts at Pharmadocx Consultants has over 27 years of experience in CDSCO regulatory guidelines for pharmaceuticals. Call/Whatsapp on 9996859227 or drop an email at [email protected] and we will be more than happy to help.

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