By: Rahul Mehta, MSc, Associate Director
The life science industry has traditionally been successful in weathering uncertain economic conditions thanks to the highly inelastic demand for drug products, yet there is always pressure to save money. And while it sounds counterintuitive, you may need to spend money to save money. Such is the case with outsourcing analytical testing. A contract lab can be a life saver when companies are watching their bottom line. 1
Outsourcing analytical testing permits a degree of freedom in early-stage projects by allowing analytical costs to be expensed. Outsourcing saves money by decreasing spending investment in capital infrastructure as well as the cost of hiring, training, and maintaining analytical staff and specialized testing facilities. Outsourcing can be the lower cost approach for analyses that have low usage, demand a high degree of specialization, or require expensive equipment. Using contract analytical resources helps a drug manufacturer avoid the need to continually upgrade equipment and provide ongoing training in the latest analytical techniques. These expenses can be better directed to other core drug development efforts. Even large pharma companies with analytical departments (other than QA/QC) typically operate on one shift due to limited product development programs going on simultaneously, so equipment and overhead is not being maximized. This makes it difficult to justify the total cost of ownership of a capital investment and specialized personnel. 1
It is for these reasons, and more, that the global pharmaceutical analytical testing outsourcing market was valued at approximately $8 billion in 2022 and is expected to reach close to $12 billion by 20272, and possibly close to $16 billion by 2030.3 Both large and small pharmaceutical enterprises have chosen to work with CDMOs to avail analytical testing services and focus instead on their core competencies. In fact, pharma companies make up the largest share of the analytical testing outsourcing market at 48%.3 However, biopharmaceutical companies are projected to record the highest compound annual growth rate, of around 9%, because analytical testing is required to boost output, define biosimilars and biologics, and offer continuous quality assurance.3 Specialized personnel is needed to conduct assays and create regulatory filings for biopharmaceutical analytical testing. Additionally, changing legislation for in vitro and in vivo tests, as well as the development of biosimilars, combination compounds, and other novel drugs, has raised the need for certain types analytical testing.
Will Outsourcing be Cost-Effective for You?
Contracting with an outsource provider for a set amount of testing can give drug manufacturers a clear estimate of development costs that will be spent on analytical services, while taking advantage of state-of-the-art laboratory technology. Your answers to following questions can help you determine if outsourcing analytical testing will save you money:
- Do you have the capabilities and resources to perform analytical services in house? For smaller or virtual biopharma companies, the decision to outsource analytical services comes down to not having the capabilities and capacity to perform tests in house. For larger companies that may have the in-house capabilities, they may not have the manpower resources. If you want to achieve a desired timeline, limited manpower will not allow you to complete analytical activities within that timeframe. In both of these situations, outsourcing analytical services to a CDMO will make the most financial sense.
- Do you have the regulatory understanding? Even if the resources are available, they may not have the up-to-date understanding about regulatory requirements for the proper CMC sections, such as designing of specification, method validation parameters, and criteria that are required for any regulatory submissions. One should have knowledge and awareness about effective guidelines for various dosage forms. For instance, if you are developing an injectable product, you need to understand the regulations around uniformity, elemental impurities, microbial, particle size, and container systems. A lack of information and justification of any parameter will result in a potential query or refusal by the FDA. Having the regulatory knowledge ensures you can find a way out of a potential situation, avoid process delays, ensure compliance.
- Do you have the resources to maintain an FDA-approved lab? Your lab has to be in compliance with respect to man, material, and machine; failure to maintain any one of them will result in major 483 observation from the FDA . Outsourcing allows you to escape those burdens of regulation, quality, and compliance and, instead, turn them over to the outsourced analytical lab. Maintaining a GMP lab in house is a continuous process and that requires investment, such as metrology, training records, material/standard/column logs, etc.
Getting to Know Each Other
A good CDMO will want to understand your analytical testing requirements and technical challenges. And as the drug sponsor, you have the right to ask some questions of your own to determine whether the outsource lab has the staff and equipment to handle a variety of analytical needs. Does it offer broad analytical capability or one primary area of expertise? A broadly skilled laboratory allows a wide range of projects to be run in one location, which helps simplify communication and data transfer. Also look into the lab’s capacity limitations. Will it be able to meet important deadlines? Does it have contingency plans in case one technician becomes sick or in the event that an instrument goes down?1 Visit the lab and bring your compliance people to audit the site and verify that the CDMO has the capabilities they say they have. Make sure the lab is FDA approved and that the status is maintained to ensure that analytical studies performed at the site will be valued and accepted by the regulatory agency.
This dialogue between CDMO and drug sponsor should not end once the contract is signed. During analytical service execution, the sponsor and CDMO should remain in contact and meet regularly, if necessary to discuss project status and communicate changes in priorities.
The lab is really your extended team and the two partners must work together productively and efficiently to ensure quality results of analytical studies.
The ability to communicate has become essential as drug sponsors look for new ways of contracting with CDMOs and CDMOs find new ways to partner with drug sponsors – especially during times of economic uncertainty. Perhaps one CEO and chairman of a leading biopharma company sums it up best: “We need to work things through in partnership, figure out how to survive first. People still don’t understand we are one industry. We’re all in this together, dependent on each other, and now is not the time to get greedy. Now is the time for everybody to get to the same foxhole, and figure out how do we survive.”4
- Analytical Services: Criteria for optimizing the contract lab experience, By Andrew Wood and Gary Deborski, Contract Pharma, Oct. 22, 2005.
- Global Pharmaceutical Analytical Testing Outsourcing Market Report 2022, ResearchAndMarkets.com, Dec. 29, 2022.
- Pharmaceutical Analytical Testing Outsourcing Market Research Report by Service, Prescient & Strategic Intelligence, Sept. 2022.
- Recession? We’re Not Even Over COVID, By Louis Garguilo, Outsourced Pharma, Dec. 19, 2022.
Pharmaceutics International, Inc. (Pii) is a US-based contract development and manufacturing organization (CDMO) located in Hunt Valley, Maryland. The experienced scientists, engineers, and staff at Pii pride themselves on adroitly employing a phase appropriate method of drug development for the prudent use of their customer’s resources as they solve challenging problems. In addition to offering end-to-end development services, Pii manufactures a variety of dosage forms to include complex parenteral drugs and has a wealth of analytical testing capabilities. Its Hunt Valley campus has four aseptic suites with lyophilization capabilities. Our talented professionals stand ready to help!
ABOUT THE AUTHOR
Rahul Mehta, MSc
Associate Director, Analytical R&D
Rahul Mehta joined Pii in November 2022 as an Associate Director, Analytical R&D. He leads the Analytical method validation team. Rahul has more than 20 years of experience in the pharmaceutical industry. Rahul previously served at Zydus Cadila Healthcare Limited, Lupin Limited, Pfizer Pharmaceuticals India, and Amneal Pharmaceuticals (India/US) with increasing responsibilities. He has expertise in analytical method development and method validation/verification/