Trust is important when selecting a contract manufacturing organization (CMO), particularly when offshoring. With more biopharmaceutical companies looking to China-based CMOs, companies need to understand both the opportunities and the challenges the market presents.
According to David Blasingame, senior project management consultant at DSI, a ProductLife Group company, China is a natural go-to for early projects to make laboratory materials and early phase one material because the country’s CMOs are known for being very quick at producing that kind of material at a significantly lower cost than U.S. or European counterparts.
“The allure is time and money for early phase programs where the focus is on getting toxicity studies underway to get some understanding of whether you have a program or not,” says Blasingame, who has spent time working with various biotech companies with CMOs in China.
A further advantage China-based CMOs offer is that the Chinese government invests significantly in companies. As a result, many large biopharma companies own floors within these organizations because they can be built and run however they like, meaning they become an extension of the business at a fraction of the cost of investing elsewhere.
In-Person Connections
While there are benefits, there can also be hidden costs that aren’t apparent in the quote. For example, one of the key considerations is the manufacturing oversight of the CMO by the person-in-plant and that won’t be captured in a quote with a China-based CMO.
“It's going to be a fairly significant amount because of the travel to get there, the amount of time that it takes and how long your person-in-plant is likely to stay,” Blasingame says.
On-site presence, however, is important because of the very wide range of plants in terms of size and condition, from plants with the latest equipment to plants that have been around for 20 to 30 years that were repurposed as they changed hands. It’s also important to be on the ground to build connections and relationships, Blasingame says.
“More importantly, you need to know what you're working with,” he says. “In one example from my time in biotech, we had seen the facility and made material there only to go back a week or two later, and it was no longer there. So, it is certainly something to stay on top of.”
Being on-site also ensures the project gets the attention it needs from the CMO and its senior management. It helps to deal with some of the cultural nuances that can jeopardize plans. “What I learned working with China-based CMOs was that ‘yes’ doesn't always mean yes,” he says. “We would ask for something during conference calls or even boardroom meetings where we were all together, even face-to-face. The answer would be ‘yes.’ But what we found out later was either there was a miscommunication or misunderstanding because of the language barrier, or it was an appeasement tactic, meaning they never had any intention of actually following through with the request. So, person-in-plant was very, very important.”
Labor and Oversight Challenges
One of the biggest issues with China-based CMOs is the high turnover rate, Blasingame says. “We probably ran through four different project managers in a couple of years. So, it wasn't easy to maintain consistency. You also weren't quite sure the level of experience or expertise you would get with these replacements.”
High turnover meant losing people familiar with the project and, because the CMO was trying to maintain security of the information, it also meant new people in the project team weren’t always granted the necessary access to information to get up to date with the project.
For projects that spanned raw materials through active pharmaceutical ingredients and drug product, an issue Blasingame and his team came across was that despite being told the CMO would manage each step because, theoretically it was a single organization, that wasn’t the case. What that means for a sponsor company is they must factor in the resources to coordinate across the various sites and activities.
“By sticking with one organization, we thought they'd help us integrate and coordinate the manufacturing schedules, the shipments of raw materials, or API for the drug product manufacturing, and the like,” he says. “What we found was each function and building within each city was just an independent organization. That means it falls back on resources at the sponsor and for smaller organizations that rely on external partners, that is a consideration.”
Another issue he came across while working with the CMO in China was that the team did not have the skill set to work through the development side and take it to a commercial process.
“If you're looking for a commercial process that you might be able to take anywhere, I'm not necessarily sure that's the place that you would go,” Blasingame says. “The emphasis is typically on speed and cost, and they are capable of making multiple batches to get you the amount of material you need, but that isn’t necessarily the most efficient process.”
Times are Changing
Over the past five years, the regulators in China, now called The National Medical Products Administration (NMPD), has been working toward installing similar guidelines to the U.S. Food and Drug Administration and the European Medicines Agency.
“Now they're much more focused on making high-quality APIs, not just for early phase programs; they really want commercial drugs as well,” Blasingame says. “They want to be able to control them internally for their citizens. That’s a step in the right direction.”
Working with China-based CMOs makes sense for early-phase programs, but for later-stage projects it’s important to have a well-developed process before going to a CMO in China. “If you hand them a process that is worked out, they would probably be very successful with it.”
An advantage CMOs in China have over other countries is the commitment to developing their talent. “The CMOs graduate a lot of Ph.D. chemists and others across all their universities, and these are top-notch schools and top-notch candidates,” Blasingame says. “They have a very heavy recruiting process where they would shut our project down for a week while they send their top VPs and project managers to the universities before they graduate those students. That’s a practice I wish we had in the U.S.” Perhaps one of the most important reasons to work with a China-based CMO is for access to the Chinese market, David adds. “It's much easier to do that if you're manufacturing internally in the country than externally,” he says.
