Third-Party Manufacturing
Strategy
- What are the current and anticipated products?
- Are any of these anticipated products in-licensed, with the potential baggage of existing sub-contractors or a “sale with supply” condition on the license?
- Are there any current products which are candidates for disposal or discontinuation?
- What capabilities will be needed to make and support the proposed product portfolio?
- Which products, in the ideal world, should a Contract Giver company make and what should it get others to make on its behalf?
- What are the expected benefits of any outsourcing decision?
- What are the intellectual property (IP) implications, both immediate and long term, of an outsourcing decision?
- What are the potential quality, technical, regulatory, supply, IP, and cost issues likely to be associated with outsourcing selected products?
- What, on the basis of this risk analysis, is likely to be achievable, while meeting the quality, compliance, and supply requirements at an economically beneficial cost and timescale?
- Full definition of capabilities needed—manufacturing, QA, regulatory, and technical
- Parameters of cost and timescale within which transfer must be achieved—this typically takes 1-2 years, depending on complexity
- Term of the contract arrangement
- Flexibility for future amendment to contract—e.g., volumes, range of products, term
- Who has the required capabilities?
- Of those who have the capability, do we have experience— positive or otherwise—which would favor or disqualify specific contractors? In particular, can we leverage existing commercial, technical, and quality relationships with any of our established satisfactory contractors who may have the capacity/capability/inclination to take on additional work?
- Of those who have the capabilities and whom we might choose to use, who is interested in doing business?
- Can we identify a preferred contractor with whom to open serious negotiations?
- Clarity from strategy on desired extent of capabilities required and the duration of the proposed relationship
- Clarity on the basis of the relationship—if “marriage” is equated to the commitment of partnership, then partnership is rarely on offer from either partner. “Amicable cohabitation” is a closer metaphor for what typically is intended by both parties.
- Reconciling the Contract Giver’s wish list with the potential contract acceptor’s offer list—is an acceptable middle ground possible?
- Precise definition of what is provided covering manufacture, quality, regulatory/compliance, supply, and cost issues
- Ownership of, and rights to use or assign, IP during the life of the deal and after the relationship ends—both the initial IP brought by either party to the deal and IP developed during deal life
- Good Manufacturing Practice (GMP) standards and the overall governing law against which achievement or otherwise of the contract terms will be decided
- Rights of termination for both parties for failure to supply, failure to take contracted volumes, failure to achieve the required standards of quality/compliance, and takeover or insolvency of either party
- Definition of GMP obligations to support product in market through life beyond the term of supply
- Communication—who, what, when—particularly for change, deviation, or product incidents