The manufacture of pharmaceutical and biologic products requires an enormous amount of funding and logistics in order to ramp up and maintain production. If a company seeks to keep the manufacturing in-house, it will need to adequately address requirements such as real estate, facilities, and human resources, as well as meeting quality assurance and all legal and regulatory requirements. Failure to meet any one of these factors could result in being unable to meet commercial demand and preventing these products from being available to alleviate human disease and disorders. In addition, if any of these logistical factors are not effectively managed, the return on investment may be negatively affected and have adverse ramifications for the business and its investors.
In order to address these concerns, many life sciences companies outsource their production to third-party contract manufacturers that specialize in product production, compliance, and regulatory matters. In theory, this outsourcing will allow sponsor companies to focus on other important commercial functions, such as new product development and marketing. However, to achieve this balance, due diligence must be performed when choosing the correct contract manufacturer and assuring they meet all legal and product requirements throughout all stages of the process. To achieve these goals, it is critical that a proper manufacturing agreement be negotiated to define the relationship between all parties, allocate risks, and ensure all requirements are met with regard to legal, product specification, and intellectual property matters.
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