Interview with DSM TN

DSM is a globally spanning company offering services across many sectors. How does the DSM Pharmaceutical sector stand out within this group? How does this structure and history enable DSM Pharmaceutical to grow and have a powerful and clear message?

The DSM Pharmaceutical sector stands out among the group as the only company with manufacturing services across the entire value chain, from non-registered intermediates, chemical and biologic APIs through to finished dosage form manufacturing.

We are able to grow and sustain a strong market position because our customers experience a consistent level of service and quality from each of the DSM Pharmaceutical business areas, which leads them to expand their business within the pharmaceutical business group. Many customers have started working with DSM solely for finished dose or API manufacturing and end up using more of our pharmaceutical services. We have many customers for whom we produce non-registered and registered intermediates, APIs and perform finished dose manufacturing for clinical trial materials and commercial product.

The DSM Pharma business group has become a major player on the CMO side. What about your services has allowed you to become a key player on the CMO side and has made you the partner of choice for pharmaceutical companies?

We actually conduct semi-annual customer satisfaction surveys and ask our customers the same question. The main reasons we have become a major player in the CMO industry and a partner of choice come from theses answers: 1) Quality, 2) Compliance, 3) Breadth of service offerings, 4) Superior customer service (responsiveness, comprehensive communication), 5) Experience and 6) Commitment.

With the growth and global outreach of the pharmaceutical sector over the past few years, do you see any major differences on how CMO’s are being used in today’s global market?’

I see a difference versus a few years ago in that pharmaceutical and biotech companies want a CMO to provide comprehensive services (e.g., formulation, development, clinical trial manufacturing and commercial production) and be able to supply the global market. Most pharmaceutical companies are trying to reduce the number of CMOs and vendors they use in order to be able to better manage their outsourcing across the globe.

In terms of any changes that CMO’s have experienced over the past 10 years, how has pharmaceutical restructuring affected you?

Actually, restructuring had a two pronged effect on CMOs. Ten years ago when restructuring and consolidation were rampant, we saw manufacturing facilities come available and new CMOs created through the purchase of these facilities. At the same time, large pharma used CMOs very tactically to primarily excess demand. Within the past 2-3 years, we have seen many large pharma companies restructuring to optimize their manufacturing network resulting in a more strategic view of CMOs as they consolidate their internal and external manufacturing networks.

Looking at strategic partnering vs. tactical partnering, has that had an impact upon your organization? What is your advice as for the best approach?

Partnering has definitely had an impact on our organization. For example, we reorganized our account management group so that each of them handled a maximum of 2 accounts (some only have 1) based on the nature of the partnership. In addition, internal teams have been created and dedicated to strategic customers so that we can respond more quickly to their needs without negatively impacting service levels to other customers.
My advice for the best approach is to define the relationship in the eyes of the customer and not internally. In other words, does the customer see the CMO as a strategic supplier? After that, organize around the customer – create one point of contact, hold joint customer-CMO S&OP meetings, agree on metrics to measure performance.

All pharmaceutical companies have specific needs, what particular factors would you say differentiate those needs from the biotech sector? How do large pharma’s demands differ from that of midsize pharma?

The differing needs of pharma and biotech are related to the products and, in many cases, the needs are the same – especially in the sterile injectable product area where sterility assurance, API availability and on-time delivery are the key success factors. Many times the largest differentiator between companies (midsize, biotech and large pharma) is that the contract manufacturer is usually the sole source of finished product for most midsize and biotech companies. This increases the need for superior customer service regarding quality, on-time delivery and increased communication to ensure that the customer is aware of any delays. The other differentiator is the overall service offering as many midsize companies need more extensive services and expertise (regulatory, analytical, etc.) versus large pharma.

As pharmaceutical companies are looking to invest more of their dollars to move drugs along their pipeline faster, do you feel that has lead to the pharmaceutical sector becoming more welcoming of the CMO’s role today more than ever?

Over the past 2 years I have seen a definite shift in the way in which large pharma companies view CMOs as many, but not all, have taken a more strategic view of outsourcing as they complete plat rationalizations, optimizations and consolidating the number of CMOs they use. We have seen a significant increase in business from two of the largest pharma companies as a result of this change in strategy.

In your mind, what makes for a successful partnership between the CMO provider and the client, arriving at a fulfilling and positive experience?

Communication and managing expectations are the major keys to a successful partnership and must begin from the time the RFI or RFP is received. Understanding the scope of the project upfront is critical to providing an accurate project and commercialization plan, which is agreed upon by the customer and CMO, and regular communication (monthly at a minimum) of project milestones create the right environment for success. Upon commercialization, quarterly joint S&OP meetings have a very positive impact on the partnership as it gets all stakeholders together and on the same page.

Have you seen any breakthrough developments from a solution, technological or market trend standpoint which may become prominent in the next year?

I do not see any major breakthroughs that will be prominent in the next year outside of RFID. Many CMOs are working with their customers to identify the right RFID technology for their products. The other “hot” topic, PAT, is used in certain areas of contract manufacturing but is limited as customers must agree to any changes that may require additional regulatory approvals.