When a biotech company is ready to begin manufacturing a product for clinical trials, it will likely see offers from contract development and manufacturing organizations (CDMOs) that emphasize low prices. Sponsors should be wary of such proposals. They should question what’s at risk to achieve those low costs and instead seek a biologics CDMO that prioritizes quality.
In biologics manufacturing, quality is not an option. It’s the price for doing business and, ultimately, safeguarding patients.
There are ways to save time and money in drug development, through approaches such as lean clinical manufacturing, but cutting corners on quality is unequivocally not one of them (1). Experienced professionals know that failing to invest upfront can lead to higher costs down the road. Remember: “The bitterness of poor quality remains long after the sweetness of low price is forgotten."
The Cost of Quality vs The Cost of Poor Quality
It is difficult to know how much it “should cost” to produce a high-quality batch of biologic drug substance. It is useful to consider, however, that the costs for process development and manufacturing have been estimated to be only 13–17% of the total R&D budget for taking a biopharmaceutical product from preclinical trials to approval (2).
Rather than thinking about the cost of quality, it is better—and much clearer—to consider the cost of poor quality. Rick Friedman, the Deputy Director of Manufacturing Quality at the US Food and Drug Administration (FDA), made this point recently, referencing ideas from PB Crosby’s classic book Quality is Free: The Art of Making Quality Certain:
As the concept of quality has evolved, there has been debate about whether the investment required to produce consistent quality goods or services should be considered a “cost.” Some people have even used the phrase “the cost of quality.” But manufacturing is a cost, quality itself is not. Quality is an imperative. Any discussion of quality “costs” is probably better placed on the considerable repercussions to the business when factories produce poor quality products, or the “cost of poor quality.” The consistent production of acceptable quality products should be an intuitive baseline requirement for any manufacturing business. (3,4)
Four Types of Poor Quality Costs
So what are the costs of poor quality? Four main types should be considered: direct costs, indirect costs, costs to company reputation, and risks to patient safety. Ultimately, these four types are all connected.
Direct costs
The direct costs of implementing corrective and preventive action (CAPA) to address a manufacturing failure are high, as an organization conducts investigations, scraps material, faces facility downtime, retests, and reinspects (5).
It has been estimated that the expense of an investigation into a simple manufacturing failure is more than $10,000, that a complex failure investigation can run a tally above $100,000, and the expenses associated with regulatory sanctions are likely to exceed $1 million (6). Preventing problems in the first place is much less expensive.
Indirect costs
The biggest indirect cost of poor quality is time. In biopharmaceutical development, any delay to market is enormously expensive, particularly in terms of a startup’s cash burn rate as it readies a product for clinical trials.
It’s even more sobering to consider the potential lost revenue caused by a CDMO’s quality problem that delays regulatory approval after clinical development is complete. Once a product has proven to be safe and effective, patients are waiting, and revenue could begin flowing—but the product cannot go to market until that manufacturing problem is solved. Recent cases serve as reminders of this real possibility (7,8).
Reputational costs
When product quality problems become public, reputations will suffer, particularly if issues recur or are not resolved quickly. A current example is readily available in the aerospace industry, where a lack of trust in Boeing airplanes translates to a lack of trust in the airlines that fly them.
In biopharma, a diminished reputation will be felt by both a sponsor and its CDMO. For a publicly traded company, this pain can be measured in a falling stock price and lower sales. For a privately held startup, the pinch may come in the form of investor reluctance to provide the next critical round of funding, or, down the road, in reduced interest from big pharma companies to buy up a small innovator—or the willingness to do so only at a bargain price.
Risks to patient health
Of course, the ultimate concern about poor quality in biopharmaceutical products is the risk to patient health. That, of course, is the ultimate and ethical reason to invest in quality. Quality management systems and regulatory inspections should make the likelihood of substandard products actually reaching patients quite low. Unfortunately, it can and does happen.
How to Ensure Quality at a CDMO
In this context, biotechs should choose wisely when selecting a CDMO. The primary way to ensure a CDMO’s true commitment to quality is by conducting a thorough audit, or by hiring an expert third party firm to conduct one (9).
Sponsors can also search for a CDMO’s quality track record online, using the FDA’s searchable database of Form 483 citations (10). Although the FDA site will not reveal the details, if warning letters or 483s are discovered, a sponsor can ask the CDMO how it addressed the citations and if they are closed out.
Investing in Quality Is the Only Real Option
When seeking a biologics CDMO, sponsors should consider not just the cost of quality, but rather the cost of poor quality. In biologics manufacturing, quality is not optional. Selecting a biologics CDMO partner that prioritizes quality will always pay off in the long run.
References
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- Szymanska, A. How to Evaluate a CDMO’s Commitment to Quality. Pharmaceutical Technology, Bio/Pharma Outsourcing Innovation February 2024. https://www.pharmtech.com/view/how-to-evaluate-a-cdmo-s-commitment-to-quality
- Farid, S.S.; Baron. M.; Stamatis. C.; Nie. W.; Coffman, J. Benchmarking biopharmaceutical process development and manufacturing cost contributions to R&D. MAbs. 2020,12 (1),1754999. DOI: 10.1080/19420862.2020.1754999.
- Friedman, R.L.; Lebo, D.; Liberti, L.; Raju, GK. ICH Q9: Attaining a Quality-Business Synergy through Quality Risk Management, ROI Analysis, and Highly Capable Facilities.Pharmaceutical Technology/Pharmaceutical Technology Europe Regulating Innovation, Quality, and Risk eBook January 2024.
- Crosby, P.B. Quality Is Free: The Art of Making Quality Certain (1st ed.). McGraw-Hill. (1979).
- Mersh, C. Cost of Quality: Worth Every Cent in Bio/Pharmaceutical Manufacturing. Outsourced Pharma, 2023, May 24. Accessed 30 May 2024. https://www.outsourcedpharma.com/doc/cost-of-quality-worth-every-cent-in-bio-pharmaceutical-manufacturing-0001
- Barnett, A. The Cost of Quality: Can We Really Afford to Ignore It? NSF website, accessed 30 May 2024. https://d2evkimvhatqav.cloudfront.net/documents/The_Cost_of_Quality-Whitepaper-NSF_PB.pdf?v=1594930093
- Keenan J., FDA rejects Zealand’s hypoglycemia filing over CDMO's manufacturing problems, Fierce Pharma, Jan 2, 2024. https://www.fiercepharma.com/manufacturing/fda-issues-crl-zealands-hypoglycemia-drug-due-manufacturing-problems
- Becker, Z. Regeneron's high-dose Eylea hit with surprise FDA rejection over manufacturing hiccups, Fierce Pharma, Jun 27, 2023. https://www.fiercepharma.com/pharma/regenerons-high-dose-eylea-hit-fda-rejection-manufacturing-hiccups-third-party-filler
- Szymanska, A. How to Evaluate a CDMO’s Commitment to Quality. Pharmaceutical Technology, Bio/Pharma Outsourcing Innovation eBook. February 2024. https://www.pharmtech.com/view/how-to-evaluate-a-cdmo-s-commitment-to-quality
- US Food and Drug Administration, Inspections/483 Database Search page. FDA, Rockville, MD. Accessed 30 May 2024. https://www.accessdata.fda.gov/scripts/483inspsearch/index.cfm?action=search.search
Contact us to learn more
Contact Scorpius to discuss your next mammalian or microbial program and learn why a boutique biologics CDMO can provide a high-quality outsourcing experience. Scorpius’ Site Head of Quality, Ania Szymanska, is an expert in audits, quality management systems, and cGMP processes. In addition, Joe Payne spent 20+ years in Quality leadership roles before being named Scorpius’ President and COO. Scorpius’ Quality team operates independent of manufacturing operations, ensuring there are no conflicts of interest in maintaining the highest quality standards.
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