In Part 1, we concluded that 21st Century cGMP faces critical challenges, given four-decades of strategic realignment of industry business models.
Readers wishing to recap can find Part 1 here.
In Part 2, we assess the impact of the strategic realignment on the pharmaceutical supply chain and today’s cGMP.
Contract development and manufacturing organizations (CDMOs) are formed
The realignment resulted in the formation of contract development and manufacturing organizations (CDMOs) working to a fee-for-service business model. The facilities and staffing of these organizations mainly came from the previously vertically integrated large pharmaceutical companies as they divested assets throughout the mid-1980s to the early 2000s, and even beyond.
The consequent fracture in the previous line of accountability relating to product license holders (PLHs), and clinical trials sponsors (CTSs), remains to this day. The impact on the integrity of the pharmaceutical supply chain is impossible to overstate.
In assessing the impact of such a massive redistribution of supply chain activities and responsibilities, we need to focus on the commercial realities, which are:
- PLHs and their shareholders will receive the financial rewards if and when a drug passes regulatory scrutiny to gain an approval to market their drug.
- The various CDMOs involved will receive fees based on the supply, and quality & technical agreements (QTAs), negotiated during the drug development period.
Neither party could do it without the other, yet these are contractual agreements written by lawyers who are obliged to protect the commercial interests of their employers.
Where does that leave the preservation and protection of material and product integrity in the supply chain?
Where does that leave the necessary investments required that will only deliver financial returns when the product is licensed for sale?
Can that all be left for lawyers to negotiate the ensuing minefield of revised terms and conditions of sale and purchase, so that patient safety is protected?
In Part 3, we will examine the potential impact of the above on cGMP non-compliance in the pharmaceutical supply chain.