When is the Best Time to Engage Consulting/Contract Services?
John Davis
Irrespective of your company’s business sector, it is always best to engage qualified consulting/contract services support as early as possible in your product’s lifecycle journey. This is especially important for those in regulated industries, like biopharmaceuticals, biotechnology, and biologics – from product concept to commercial manufacturing. By working in a project management capacity (i.e., person-in-plant) with a partner who offers a wealth and breadth of technical expertise, your company benefits from a continuity to your process that may not be available were you to engage in a peace-meal approach (random sourcing, targeted at focused issues). The consulting/ contract service provider would work with you to identify project needs and provide or recommend resources that best accommodate your needs at any given stage of your product’s lifecycle.
It is understandable that smaller, start-up companies view consultant/ contractor engagement as a financial luxury. Their thinking may be “who knows our product(s) better than us?”. Although there may be some truth to that, consider that most therapeutic drug products fall under the broad categories of proteins, nucleic acids, carbohydrates, lipids, and multiple combinations, as conjugates, for instance, as well as viable cells (cell and gene therapy). It stands to reason that engagement of technical resources who have demonstrated a proficiency in developing, scaling, optimizing, transferring (from Development to Validation, and on to Manufacturing) products within these categories would facilitate a more rapid movement of products through their lifecycle(s). So, is it not reasonable to believe that an investment early on has the greatest potential for financial savings over the long haul, especially where the knowledge base of internal resources may be limited or personnel resource-constrained?
Arguably the best reason for early engagement of consulting/contract services is the avoidance of rework, where initial design and development efforts may have lacked technical or regulatory compliance rigor. For example, consider the repercussions of spending months developing a membrane separation technology for the isolation, recovery, or purification of your product. Chances are, if your organization does not possess the technical knowledge to achieve your objective, you may have wasted valuable time and financial resources. By engaging the appropriate consulting/contract resource early in the design/development process you are more likely to achieve the objective in a compressed time scale, allowing you to move on to the next development objective.
Contracting in the Biopharmaceutical Sector: Part 1
John Davis
The Oxford English Language Dictionary defines a contractor as “a person or company that undertakes a contract to provide materials or labor to perform a service or do a job”. This is a generic definition and is used here only as is applicable to contracting in the biopharmaceutical, biotechnology, and biologics space. The use of contractors in this space has been observed to be fluid, over time – influenced by various factors. This series of articles addresses some of the factors influencing contractor demand and utilization.
Why Do Biopharma Companies Use Contractors?
There has been a paradigm shift over the past several decades as regards the motivations guiding the employment of contractors across the bioprocess space. Many companies believe their primary business functions should be executed by full-time employees (FTEs). Business integrity could be best managed and controlled by use of FTEs, especially as regards intellectual property. Businesses thrived under this model for decades. Even so, there were situations wherein additional resources, whether new skill sets or additional hands, were required to address immediate, urgent business needs. As businesses grew, and as more start-ups entered the bioprocess space, the demand for more-current skill sets grew – often outpacing the available qualified resource pool.
Back in the day, it was not unusual for contractor utilization to be on the order of 1% to 5% of the work force. During the dark days of Covid-19 there was a surge in contractor utilization, maybe upwards of 5% to10%, especially in the vaccines sector. Today the demand has not lessened but has been challenged by limited availability of contract resources. Contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs) have flourished in this environment. Part of that phenomenon stems from the need, on the part of the larger biopharma players, to rapidly move their growing pipelines to CRO and CDMO partners – without incurring huge capital investment in facilities, equipment, and head count. This can also be said of the start-up community, where the greatest demand for funding is in the clinical development and clinical trials phases of their product life cycles.
What Options Do Biopharma Companies Have When Selecting Contractors?
In addition to the above-mentioned search for new and enhanced skill sets and head count enhancements during the normal course of business, biopharma companies may have a multitude of reasons for engaging contractors, including:
- Replacement of specific skill sets vacated during normal attrition (retirement or relocation).
- Replacement due to unintended consequences of downsizing events, wherein valued resources depart voluntarily.
- Augmentation of resources in response to remediation of regulatory actions, like FDA Warning Letters or Consent Decrees.
Irrespective of the reasons for seeking contract resources, there are a limited number of options available. By far the most common approach is to engage staffing agencies. There are many staffing agencies available, ranging from multi-sector, servicing biopharma, high tech (IT), aeronautics, automotive, food, petroleum, etc., to sector specific. There are also boutiques, which serve sub-sectors of the biopharma space (validation, regulatory, quality systems, etc.). The boutique is more likely to be able to support a more specific technology focus, with more highly qualified, more experienced contract personnel. Whether staffing agency or boutique, they come in all sizes, from fewer than 10 to hundreds of personnel.
To find out more about contract services in the biopharma sector, in particular boutiques, go to http://www.etcbioprocessservices.com.
Contracting in the Biopharmaceutical Sector: Part 2
John Davis
In Part 1 of this article series, we briefly touched upon why biopharmaceutical companies use contractors and the options available when selecting contractors. We mentioned CROs, CDMOs, staffing agencies, and boutique contract services. We will now add some granularity to the distinctions between them.
What is a Contract Research Organization (CRO)?
Per the U.S. Food and Drug Administration (FDA) 21CFR Part 312.3, a “Contract research organization means a person that assumes, as an independent contractor with the sponsor, one or more of the obligations of a sponsor, e.g., design of a protocol, selection or monitoring of investigations, evaluation of reports, and preparation of materials to be submitted to the Food and Drug Administration”. In this context a sponsor is the corporate biopharma entity, and the contractor is the CRO.
The clinical research environment includes Preclinical through Phase IV (post-marketing surveillance) activities that involve the testing of candidate drug products in animal and human subjects. Preclinical (phase 0) starts with toxicity testing and the stages progress through phases I-III, where tolerability, efficacy and dosage are evaluated. Once a drug is approved by the FDA it continues to be evaluated through phase IV. There are a lot of moving parts, each involving unique skill sets for efficient and effective execution.
CROs are predominantly companies of varying size (25-500 employees). In addition to their FTE base, they frequently engage contractors from staffing agencies, boutiques, or independents to augment increasing demands on their services.
What is a Contract Development and Manufacturing Organization (CDMO)?
Per Wikipedia, “A contract manufacturing organization (CMO), more recently referred to … as a contract development and manufacturing organization (CDMO)…, is a company that serves other companies in the pharmaceutical industry on a contract basis to provide comprehensive services from drug development through drug manufacturing”.
Per the FDA’s Guidance for Industry, November 2016, Contract Manufacturing Arrangements for Drugs: Quality Agreements, “For purposes of this guidance, we define owners as manufacturers of APIs, drug substances, in-process materials, finished drug products, including biological products, and combination products…. For purposes of this guidance, we define contract facilities as parties that perform one or more manufacturing operations on behalf of an owner or owners”.
The development environment includes demonstration of product creation, manufacturing models, product characterization, scale-up (to full manufacturing scale), optimization, technology transfer (from R&D to Manufacturing), and validation. The sum of all documentation supporting development through process validation, including the validation of all facilities, utilities, and equipment, is submitted to the FDA in the form of a New Drug Application (NDA). Even after regulatory approval, Chemistry and Manufacturing Controls (CMC) are evaluated, by a process termed Continued Process Verification (CPV).
CDMOs are predominantly companies of varying size (200-1000 employees). In addition to their FTE base, they frequently engage contractors from staffing agencies, boutiques, or independents to augment increasing demands on their services.
Who are Etcetera BioProcess Services, LLC and How Do We Service the Biopharma Sector?
Etcetera BioProcess Services, LLC (EBS) is a subsidiary of Etcetera Consulting Services, LLC (ECS), founded in 2011. John Davis served as the sole practitioner of consulting/contract services for ECS after serving more than thirty years in the bioprocess industry. Luis Mejia and JaLisa Ray joined forces with John in 2020. Thus, EBS was born and has been enjoying steady growth as a provider of consulting/contract services for the biopharma industry.
EBS employs independent contractors, in a 1099 capacity, to service direct contracts with biopharmaceutical companies, CDMOs, and CROs. Our staff averages more than 25 years each in the bioprocess space, with an additional 2-14 years in consulting/contracting capacities. Our contract fees are highly competitive – at or below industry average. EBS offers above average compensation packages to our 1099 contractors.
To find out more about Etcetera BioProcess Services, LLC, a boutique contract service provider, go to http://www.etcbioprocessservices.com.
Contracting in the Biopharmaceutical Sector: Part 3
John Davis
In Part 1 of this article series, we briefly touched upon why biopharmaceutical companies use contract services and the options available when selecting among contract service providers. We mentioned CROs, CDMOs, staffing agencies, and boutique contract services.
In Part 2 of this article series, we briefly discussed the differences between CROs and CDMOs, and we provided a brief introduction of Etcetera BioProcess Services, LLC as a recent addition to the boutique contract services market.
What is Happening in the Contract Services Space?
As alluded to in the first article in this series, the rapid growth of the biopharmaceutical business space in recent years has been paralleled by a concomitant growth in the contract services sector. That growth has challenged the traditional staffing agencies, as well as the boutique agencies, when it comes to keeping up with higher demands for services. Adding to these challenges are recent upticks in corporate downsizing – releasing thousands of personnel of varying skill levels out into the open job market, the majority of whom will reintegrate into the business sector as FTEs. However, a growing number, especially among the older, most experienced professionals, will opt to enter the contracting services sector.
How Is This Business Sector Changing?
Most of the personnel employed by staffing agencies are employed in the W2 capacity, where base salaries are like or slightly greater than they were familiar with as FTEs. On the downside, their benefits are significantly reduced. To be successful, a W2 contractor will likely have endless opportunities for contract jobs but may require a significant amount of travel away from home. This business model has been highly successful for established staffing agencies but is more challenging for the start-up staffing agencies (of which there are many).
Over the past decade, or so, there has been a significant rise in the number of staffing agencies employing independent contractors (1099s), in a Corporation-to-Corporation (C2C) capacity. Although the engagement of the independent subcontractor reduces the profit margin of the staffing agency (because they command higher base rates to cover their overhead), there is a significant benefit in retention of personnel of higher skill level. These placements tend to be of longer duration. As more client companies recognize the variability in the skill sets of contractors presented to them (often with the same contract rate), they are becoming more discriminating in their hiring practices. If they can secure contract personnel of the higher skill levels and pay a lower base rate to the staffing agencies, why not?
Unlike staffing agencies, the boutique service provider (like Etcetera BioProcess Services, LLC) can offer its 1099 subcontractor rates that cannot be matched by the staffing agencies. This enables the boutique service extended contract placement and greater likelihood of repeat business. Also, by properly managing our 1099 contractor base, we can more efficiently and effectively support specific corporate initiatives, like Facilities/Equipment Engineering and Commissioning, Clinical Process/Product Development, Quality Systems Management, et cetera.