Pharmaceutical Outsourcing

Running a Tight Request for Proposal Process; Part 3

Previously, I discussed data normalization of the proposal information, short listing, and the process of qualifying a shortlisted service provider.  In this final blog on pharmaceutical outsourcing, I am going to focus on the quality audit, the contract review process, and project kick-off.

An important aspect when selecting a service provider is ensuring that their experience is aligned with the needs of the program.  For development-based projects, the focus usually ends up being on personnel experience, laboratory capability, and company track-record with similar programs.  For GMP biomanufacturing programs, however, a key item to schedule during the pre-contract award phase is the quality audit.  Why, you ask?  According to the International Conference on Harmonization (ICH) Q7 for Good Manufacturing Practice, “Contract manufacturers should be evaluated by the contract giver to ensure GMP compliance of the specific operations occurring at the contract sites.”  Accordingly, BPAI recommends performing the quality audit prior to contract award (as part of qualifying the shortlisted companies), so it is clear that the service provider is demonstrating the required principles and practices of compliance with respect to GMP.  Once demonstrated, this clears any doubts when moving into the contract award phase, and ensures that any critical observations are highlighted prior to contract award so that the service provider is committed to a resolution before undertaking GMP activities.  After all, there is nothing more negatively impacting to the project timelines than awarding a contract to a service provider, only to find out afterwards that the service provider is unable or unwilling to adjust internal practices to reduce program risks or comply with GMPs.

BPAI Pharma Outsourcing

Typically, the audit phase of the contract award will involve 1-2 auditors for 1-2 days and will encompass a general review of the quality systems, as well as the facility, including a tour conducted in the order of product flow – from warehousing, to materials management, development laboratories, quality control, and biologics manufacturing suites.  The aim of the audit is to obtain a general impression of the quality systems, their maturity, and the overall commitment to compliance.  The outcome of the audit typically involves the publishing of an audit report that cites observational findings that need to be addressed depending on severity.  Severity of the observations that can range from recommendations (which are simply helpful tips), to minor/major/critical.  Critical observations may require updates to SOPs, addressing misalignment with regulations, re-establishing facility flow, addressing monitoring issues, or issues with training programs.  It is advisable to have a written commitment from the service provider that they will address the observations, along with a plan and timeline for doing so.  Finally, where technology transfer and biologics process development are precursor activities to GMP biomanufacturing, a tour of the development laboratories can be extremely helpful in assessing the capability of the lab, even though development activities are typically not within the scope of a GMP compliance quality audit.

Contract negotiation can (and should!) proceed in parallel to scheduling and conducting the quality audit, as these activities typically involves a different subset of personnel and always take longer than anticipated.  Negotiations can be a lengthy process, depending on the scope of the project and the overall cost of the program.  BPAI recommends budgeting a minimum of 4-6 weeks of lead-time to finalize and sign a contract that involves GMP biomanufacturing.  Most contracts include not only the overarching Master Services Agreement, but also appendices that outline specific Statements of Work, special conditions, product specifications, and the quality agreement.  An important element to contract finalization is ensuring that a quality agreement is also established as a material part of the main services agreement, as this will ensure that the roles, responsibilities, and expectations of GMP compliance during program execution have been discussed/negotiated and agreed upon by the parties.

Critical elements of a pharmaceutical outsourcing contract should include:

  • Outline and scheduling of the services.
  • Payment schedule, including any deposits required and details on how deposits will be applied.
  • Project management assignments by both parties.
  • Establishment of a steering committee, and mechanism of escalation when issues arise.
  • Clear guidelines around permissibility (or lack thereof) and guidelines for subcontracting.
  • Regulatory reporting and maintenance requirements for each party.
  • Materials and outsourced testing costs and handling requirements.
  • Change order process.
  • Dispute resolution.
  • Guidelines for postponement or cancellation of laboratory or biomanufacturing services, as well as termination requirements.
  • Insurance requirements.
  • Confidentiality and intellectual property requirements.
  • Warranties by each party, as well as indemnification.

Of course, this is not an exhaustive list and within each of these sections there are many details, but the important part of having a written contract is to ensure that both parties agree on how services will be performed, monitored, and governed.  BPAI recommends engaging with legal counsel and industry experts who have experience in the biologics manufacturing and pharmaceutical outsourcing industries before committing to the agreement.

With the contract and quality agreement signed, and a statement of work finalized that outlines the scope and deliverables of the project, you’re now ready for the project kick-off phase.  Over the years, our bioprocess consultants have seen an increasing trend in conducting project kick-off meetings in person, typically at the service provider’s facility.  The reason for this is simple – particularly for complex programs – seeing is believing, and meeting face to face is a critical element in defining early success of the project during the initiation phase.  The project kick-off meeting provides an opportunity for key members of both party’s execution teams to review the contract and statement of work together, establish a communication strategy, discuss the roll-out plan for the biomanufacturing project, review the timelines, and identify issues or out-of-scope items that may become apparent while mapping out the execution phase of the project.  There are typically countless action items resulting from a project kick-off meeting!  In addition, this meeting format provides an ideal opportunity for counterparts from each organization to meet one another in-person, and have the occasion to discuss specifics related to their area of the project.  Finally, attendance at the project kick-off meeting typically defines the project team (comprised of members from both organizations) that will be meeting on a routine, on-going schedule to discuss the project execution and track overall progress.  While it is not imperative to conduct the meeting in-person, BPAI has observed clear benefits in doing so because of the opportunity that it affords by clarifying roles and expectations during the technology transfer and early project initiation phase of the project.

In summary, my three-part blog on pharmaceutical outsourcing practices has touched on the following important aspects to consider when conducting an RFP process to select a service provider:

  • Do your research on what service providers are out there.
  • Establish the Confidentiality Agreement.
  • Develop and publish the Request for Proposal, with clear scope and deadlines..
  • Receive the proposals and normalize the data to achieve a ‘like-for-like’ comparison.
  • Shortlist the most interesting companies for further discussion.
  • Qualify the shortlisted companies through a site visit and sharing of contract documents.
  • Conduct a quality audit.
  • Negotiate the master services and quality agreements in preparation for signing.
  • Schedule the project kick-off meeting.

This wraps up my series on pharmaceutical outsourcing practices based on BPAI’s experiences.  As always, if you or your company are challenged with managing a complicated RFP process, I would highly encourage you to contact us at BPAI to speak with one of our bioprocess consultants who are experts in pharmaceutical outsourcing.  This is a mainstay of our business

And we know it well.  We can help provide you with a path towards selecting the ideal service provider, clarity in the process, and guidance to ensure that you are evaluating leaders in the biologics manufacturing industry.

Terry Cochrane
Managing Director
Bio-Processing Alliance, Inc.

Posted in Pharmaceutical Outsourcing