Establishing a Vendor Network for Clinical Supply Manufacturing Services

Abstract

The Request for Information/Request for Proposal (RFI/RFP) process for evaluating sourcing partners is well established and has been successfully utilized within the Pharmaceutical Industry. Applying these principles to technical disciplines such as clinical supply manufacturing requires due consideration to a number of areas from demand projections through output evaluation. Pfizer is currently utilizing these concepts to identify, evaluate, and on-board vendors in the clinical supply manufacturing space. This article includes a discussion of some key best practices associated with using the RFI/RFP practices for these types of technical projects.

Introduction

The need to find cost-effective ways to operate is of paramount importance in face of the current economic challenges facing the Pharmaceutical Industry (Pharma). The industry is faced with the requirement for innovation, technical expertise, and high quality while at the same time needing to drive down costs against aggressive timelines. These same organizations are looked upon to enable the portfolio and constantly challenged with new, complex problems to solve. Additionally, Pharma has evolved to be global in reach across both clinical development and commercial product areas. The need to supply global clinical trials while assuring global regulatory support presents an added challenge in the cost sensitive times currently facing the industry.

One way that Pharma has dealt with containing and reducing costs is through outsourcing. The fundamental technique for evaluating a pool of potential vendors against a block of work is through the Request for Information (RFI) and Request for Proposal (RFP) process. This is a well established process across all industries and is likely here to stay within Pharma, particularly during this period of focus on cost effective sourcing. However, it is recognized that the process itself can be laborious and to be successful requires more effort and internal alignment than is typically considered or performed [1]. Nevertheless, the economic benefit obtained from using the process is too meaningful and measureable for RFIs and RFPs to disappear [2]. Numerous references and on-line aides regarding the basic concepts and processes of RFI/RFP are available, much of which are focused on the structure and content of these tools [3, 4]. This article presents some essential operational and evaluation aspects of the RFI/RFP process when conducted for technical services such as establishing a vendor network for clinical supply manufacturing. Based on experience across a number of projects at Pfizer, these essential aspects are focused on the following areas:

• Establishing and communicating demand projections for the services under evaluation
• Assembling an appropriate team of Subject Matter Experts (SMEs)
• Identifying key evaluation criteria at each step of the process
• Making the RFI/RFP process work for both client and service provider
• Evaluating output and documenting decisions based on that evaluation

Sourcing professionals in Pharma should ask themselves the following questions:

• Do I have a clear understanding of what products/services I need to buy and how I want them to be provided?
• Do I know why I am using the current suppliers in my network of service providers?
• Do I have the documentation to support the initial selection of these service providers?

Through the use of a well defined RFI/RFP process and by paying attention to some of the essential aspects discussed in this article, those questions can be answered affirmatively.

Establish and Communicate Demand

Better engagement by potential vendors on the RFI/RFP process can be expected when information is provided not only on the type of work within scope, but also the anticipated volume of that work in the foreseeable future. Due to the nature of work in the clinical development phase of the Pharmaceutical Industry, it is often difficult to give definitive forecasts for manufacturing associated with that type of work. However, it is important that sponsors of this work, like Pfizer, invest the time required to gain a reasonable understanding of the expected and potential needs for both the immediate term and into the next year or two. There are many reasons to do this, including possibly leveraging volume-driven cost savings. Guaranteed spend/volume commitments can be used for price concessions, particularly if long term commitments can be established. Additionally, a realistic forecast can help determine a vendor’s true ability to support the projected workload.

It is also important to truly understand the intent of the sourcing exercise. Is it due to a large increase in the volume of work (e.g. capacity outsourcing)? Is there a need to explore cost savings against the current vendor network? Are external cost savings versus internal support being explored? Is there a need to access capabilities of the supply base not within internal competencies (e.g. competency outsourcing)? Typically, several of these drivers will be applicable, but an understanding of their relative importance helps to effectively design and execute the sourcing and selection process.

Giving potential vendors a view into projected needs and rationale for conducting the sourcing exercise is important for engagement. Suppliers are inundated with RFI/RFP requests in the current environment that go no further than the discussion stage, sending the message that many of these efforts are simply for benchmarking purposes. A well-stated rationale for the sourcing project can help eliminate that fear.

Assemble Team of SMEs

The process for evaluating and on-boarding vendors for clinical supply manufacturing activities, including the RFI/RFP steps, is very much a team effort within Pfizer. It is important to have a team lead that is responsible for the overall project, possesses a strong understanding of the work within scope, and has the authority to hold team members accountable for timelines and deliverables. While the mechanics of the RFI/RFP process and commercial assessment is typically led by a member of the Procurement organization, technical SMEs play a critical role on the team by being accountable for developing the substance within the tools and evaluating technical and quality competencies within vendor responses. For clinical supply manufacturing projects at Pfizer, the team is typically comprised of members from Supply Chain Sourcing, Quality, Analytical, Formulation Development, and Procurement. More frequently, a team member from the Environmental, Health, and Safety organization has been getting pulled into RFI/RFP discussions, particularly for projects that pose material handling challenges. As a large Pharma company that is well represented across all of these disciplines, it is reasonable to assemble this multi-functional team. Small, emerging companies often have sourcing professionals that need to source activities outside of their knowledge base. In those situations, it is highly advised that consultants be utilized to provide technical guidance in the areas that are lacking internal resource. A sourcing exercise conducted without the appropriate base of knowledge to evaluate potential suppliers is a recipe for disaster, as it is easy to overly influence selection based on cost criteria.

Table 1- Example of Scoring Method

Identify Evaluation Criteria

Defining and implementing an evaluation process early on is key. Ideally, this would occur prior to receipt of RFI/RFP responses in order to reduce bias. Many approaches can be utilized to score response information; these can range from very simple to very complex methods. Potential evaluation options vary from simple yes/no responses to numeric values with category weightings. An example of a weighted scoring method used to evaluate service providers in the clinical supply manufacturing space is shown in Table 1.

One important point to consider is the level of quality evaluation at this stage. It is certainly important to include quality criteria to assure that the vendors being assessed have the appropriate regulatory and compliance history experience to support the desired work. Regulatory agencies are continually increasing expectations that clients fully understand and are accountable for activities conducted at their outsourcing partners [5, 6]. However, overly emphasizing those aspects at this early stage could prevent the client from evaluating some newly emerging potential partners that could bring significant value to a relationship. At the end of this process, an audit will be the real opportunity to ruggedly test the quality, regulatory, and compliance aspects of the potential partner, including the identification of any showstoppers.

Table 2-Scoring Criteria

It is also important to provide RFI/RFP evaluators with a common set of criteria to score respondents (e.g. what warrants score of 5 vs. 1 for any particular category shown in Table 1). Due diligence to this aspect is important to obtain a good comparison across potential service providers.Table 2 provides examples for a few of the areas evaluated in Table 1. This scoring methodology provides a framework to compare suppliers in an objective way and to help provide supporting rationale for sourcing decisions.

Client and Service Provider Interactions

A good communication plan when conducting an RFI/RFP exercise is essential to its success. While many of the recommendations provided here are based on common sense, they are worth repeating.

Considerations for Clients/Buyers

It is important for clients initiating an RFI/RFP to have a well defined plan in place. When seeking a vendor network for clinical supply manufacturing, these aspects include having a well-written work scope document and clearly defining the information transfer process. Guidelines for response time and format of response need to be clearly set and communicated. It is also important to set realistic expectations regarding turnaround. While certain situations may warrant very aggressive timelines for turnaround of an RFI/RFP, clients can expect better quality information and a wider base of service providers willing to participate when timelines are reasonable. It is also important to ensure that there are sufficient opportunities built into the process to allow for clarification questions back to the client after any point of information transfer.

Perhaps the most important point for consideration by clients is to provide feedback to RFI/RFP participants at the end of the process. Doing so will not only help maintain credibility; it will also help assure active participation by the potential vendor pool in future projects.

Considerations for Vendors

The key message for service providers of clinical supply manufacturing services is to treat the RFI/RFP process seriously if there is interest in the work and particularly if there is interest in working with the potential client. This includes effectively communicating whether or not participation is possible and desired. Formally recognizing and declining a request to participate in a sourcing exercise is better than no response at all. If participation is chosen, then delivering on the information transfers thoroughly and on time is a must. Doing otherwise can negatively impact the vendor’s credibility with the buyer organization in both the short and long terms [2].

Considerations for Both

The RFI/RFP process works best when both client and provider have a single primary contact in place to manage the communication flow. This helps to minimize confusion and assures compliance to timelines and associated commitments. The key contacts can also work together to facilitate clarification meetings and teleconferences as needed throughout the process.

Documented Output

The value of keeping detailed documentation of RFI/RFP efforts and other vendor evaluation exercises cannot be stressed enough. The data to support vendor selection and utilization decisions can be used for numerous purposes. Some practical examples based on experience include the following: (1) justifying approval of purchase orders, (2) demonstrating that a particular vendor recently “discovered” by a colleague has already been evaluated through a rugged process, (3) showing a new organizational leader that a defendable approach was utilized to establish a vendor network, and (4) providing a logical starting point when initiating the process for similar blocks of work or refreshing information on the current vendor pool.

The methods and tools used to document the identification and establishment of a vendor network through the RFI/RFP process can vary from the simple (e.g. retention of evaluation spreadsheets presented in Identify Evaluation Criteria section of this article) to the highly complex. A pragmatic approach to meet this objective generally entails assembling a presentation deck that includes background for RFI/RFP need, scope of work, explanation of how vendors were selected to participate in RFI/RFP, description of evaluation criteria and scoring, and data that led to final vendor selection decisions.

Summary

Establishing a vendor network for clinical supply manufacturing services poses many challenges to Pharma innovators. The RFI/RFP process provides tools that can guide much of this effort and lead to a fair, consistent, and well documented approach. The use of the essential aspects provided in this article can help both buyers and service providers get the most out of the RFI/RFP process as it pertains to clinical supply manufacturing services.

Acknowledgments

I would like to thank the following colleagues for their review and feedback: Kelli Boiselle, Sandy Onorato, Kurt Speckhals, Paul Stuart, and Gerald Thompson.

References

1. M. Joyce, “Designing Success into Outsourced Pharmaceutical Projects at the Proposal Stage”, Drug Information Journal, Vol. 36, pp. 67-76, 2002.
   
2. S. Chadwick, “The RFI/RFP Process, Opportunities for Those Who are Prepared”, IPA Bulletin, Mar/Apr 2007.
3. G. Wheaton, (2008) “Request for Proposal” online at Epiqtech.com.
4. B. Anderson, “The RFP Template: A Template for Writing an RFP to Select a CRO”, Integrative Consulting Services, 2008.
   
5. B. Ortiz et al, “Increased FDA Scrutiny of Purchasing/Supplier Controls”, Contract Pharma, Vol. 12, Number 8, pp. 100-103, October 2010.
   
6. QA Pharm, “Contract Manufacturing Operations and You- The You Part”, Manufacturing & Capabilities Newsletter, October 25, 2010.