What is CMO?
Contract manufacturer organization (CMO) is an organization that serves the pharmaceutical industry and provides clients with comprehensive services from drug development to commercialization. They provide support to pharmaceutical, biotechnology, and medical device industries in the form of research that is outsourced on a contract basis. CMOs range from large and international full-service organizations to small, niche organizations that may specialize in certain developments.
CMO provides services such as:
- preclinical research
- clinical research
- method development
Reasons to contract out manufacturing activities
Contract manufacturing can help enhance the drug development process by reducing costs (savings can be range from 30-35%), creating faster and cheaper processes, and increasing manufacturing efficiencies. Delegating control and responsibility of a product to an organization with expertise and knowledge can help save time and headaches. Reasons for contracting out to a CMO include:
- They have the right technical equipment that may be hard to acquire if a firm were to operate on their own without the help of CMO.
- They have the scheduling flexibility that allows for making necessary accommodations to unexpected/sudden changes in the process.
- Financial stability is a good buffer to have for massive projects, and CMOs often have the financial capabilities to provide this buffer.
Risks in choosing the wrong manufacturer
If you’re not careful in choosing your contract manufacturer, you risk running into delays, cost overruns, and little sympathy for investors and patients who are expecting your drug to be delivered as promised. It can also be a disastrous move when your manufacturer fails to meet the standards of the health inspector board. When you jeopardize regulatory approvals, it will slow down the whole process of your product. It’s crucial to choose the right contract manufacturer to guarantee the success of the product.
Key Considerations in Choosing the Right Contract Manufacturer
Cost is usually the number one priority for clients. Not surprisingly, saving on costs is the top reason customers are looking for a drug manufacturer to handle their products. Although undeniably important and often at the forefront of any partnering decision, it’s important to keep in mind of the other factors that should also be considered besides who can manufacture most economically.
2. Range of services available
One of the first things that should be discussed in a CMO consultation is the range of services offered by the organization. You want to check their services can fulfill your product’s needs. If you’re looking to bring a molecule all the way from development to commercialization–you’ll want to make sure they have the services you need to make that possible. On the other hand, if you’re only looking to outsource the packaging of your drug, you won’t require an exhaustive list of services. Know what the organization has to offer and then evaluate it for its alignment with your needs.
3. Reputation and Reliability
Just like any partnership, you want to check if the other party is reputable and reliable before you agree to a partnership with them. Most often, you can do this by checking on websites, testimonials, academic journals or papers, and other work. You want to check for any adverse comments, ratings, or reviews as these can be red flags that the company is not trustworthy or dependable.
4. Geographic location
If possible, you want to be select a contract manufacturer that is geographically convenient for you. Travel can get expensive– think of the costs of flights, hotels, and time you’d have to spend traveling. Audits and check-ins with the CMO are required, so you’ll have to do this continuously throughout the contracted time. Ideally, you would choose the manufacturer that is in your city. However, that isn’t always possible. There is some technology that is exclusively available in select CMOs (this is especially common with new technology that hasn’t completely branched out yet), and if you have a product that needs that technology, then you will have to accommodate the geographic inconvenience.
5. Capability and Expertise
There are a few important questions you should ask before contracting with a CMO. Does the manufacturer have the capacity and know-how to manufacture your product? Have they manufactured your product or a product similar to your product before? Do they have the right scale of equipment and capabilities to carry your product to finish? If they don’t, do you want to be their guinea pig in this development? And are you able to take the risk if something goes wrong?
6. Quality and Compliance
You want to choose an organization that has a good track record with regulatory bodies. Theis reduces your chance of suffering from a back order because of something your manufacturer does incorrectly. If your manufacturer gets issued a warning letter, it’s very unlikely for you to get approval for your product. The ideal candidate would be someone who has the expertise and has a history of complying with the requirements.
7. Commitment, Communication, and Cooperation
A good way of predicting a CMO’s communication style and the response rate is to observe their behavior towards you at the beginning of the relationship. Even if you’re just consulting with them for now, watch for how they behave. Their initial response rate is usually a good indicator of how quickly they will respond in the future. Are they sensitive and attuned to your needs? How quickly do they respond to your inquiries? Their initial response pattern is usually a good indicator of their response rate in the future. Do they treat your product as a priority or a side project they pay attention to after they’re done with products belonging to bigger clients? Another important tip: Make sure all areas of the business are as responsive as the business development team. Since the business development team wants your partnership, they will have the best customer service. You want to ensure the other departments are just as committed.
Are they lean? You choose a CMO to save on costs from economies on scale and expertise hopefully. You want to make sure the organization operates in a cost-efficient way and can help you save costs where they can.
9. Honesty and Trust
Last but not least, you want to choose a CMO that operates on trust, openness, and honesty. This is essential for all stages of the product process but becomes especially imperative when something goes wrong. Every CMO has had projects that weren’t successful in the past, but the important thing is to have a system in place ready to solve its issues. Ask the organization if they learn from their mistakes in the past. Their response will be very revealing as to whether or not you should consider a partnership with them.
The considerations in this article are essential elements to keep in mind -but at the end of the day, every pharmaceutical company has different needs, preferences, internal policies, and economic conditions they must consider. Do your research, make a list of your top key considerations, and consult with a few CMOs that meet your requirements. Most important of all, remember to trust your gut when making the final decision. As all relationships go, choose the one that feels right. Regardless if other organizations may satisfy more requirements from your checklist. After all, it doesn’t matter how good it looks on paper if it doesn’t feel right.