Philip Coetzee, Director CMO Management for Daiichi Sankyo Europe shares his insights on how to get the best from relationships with Contract Manufacturing Organisations (CMOs).
“The CMO industry is healthy and will continue to grow as long as it remains agile and keeps up with industry trends,” says Philip. “New types of medication are being developed every day, and originators often find it challenging to manufacture these themselves. I see a lot of potential for CMOs in the future.”
Currently overseeing a network of six contract manufacturers, he brings a wealth of experience from both sponsor and contract services side of the table.
In the latest episode of the PharmaSource podcast he shares his advice on creating better, more honest relationships with with CMOs.
The Art of Writing RFQs
One area where Philip’s previous experience working for Catalent, a leading CMO, has been invaluable in his current role is in writing Requests for Quotations (RFQs). “I know what they need.” says Philip.
Philip’s. “At Catalent, my team was responsible for receiving RFQs from originators, collating the necessary information, and presenting it to internal departments such as analytics, assessment, manufacturing, packaging, development, project management, and quality. We would then calculate the cost, write the quote and continue to support after the contract was agreed upon, accommodating any changes of scope or additional work.”
“My RFQ documents are substantial. I aim to provide as much information as possible for them to make a qualified assessment. Of course, they’re never complete because with any complex project, there are always things that we might not have 100% correct.”
- Philip Coetzee will be chairing an interactive roundtable about writing RFQs/RFPs at CDMO Live in June 13th 2024. Join the conversation by registering here.
Building Relationships
One of the most important lessons Philip has learned is the value of building a one-to-one relationship with your key account manager. “Get to know them,” he advises. “Having a personal relationship with them is always good.”
For this reason he finds working with smaller CMOs more rewarding. “I get to know my key account manager, and I might even get to meet the CEO and have a personal relationship with them.”
The importance of honesty
Honesty is between sponsor and contract manufacturer is essential, he says.
“Be honest. I find it very difficult to work with someone who tells me ‘half-truths and whole lies’. I’d rather someone say – ‘someone messed up and threw away a roll of your labels.’ It’s human. Things happen.’”
He believes in being ‘appropriately honest’ with your CMO. “Tell them the reasons why their quote was not acceptable, so they know for the future. I would rather share too much information than too little.”
“Share information that is worthwhile to help the CMO understand why they did not land a contract,” advises Philip.
“Tell them where you lie in terms of internal costs, because this is the reference that you will use. If you take it away from one team and give it to another, give them honest feedback, for example, that they are 15% higher, or constructive feedback about their costs.”
In-house, CMO, or Business Partner
Philip explains that at Daiichi Sankyo they tend to keep the very expensive specialist manufacturing in-house, but outsource bigger, high volume products.
“I have very transactional CMOs, where it’s a place for products to be manufactured, packaged, and distributed. We have a business relationship where if I can increase my market share, it means that we both win at the end of the day.”
He also mentions joint ventures that often become a business partner, benefiting both parties. “We also manufacture some stuff that we sell the bulk to a third party to market it in a certain area. It’s useful if you have a business partner who already has a foot in markets such as South America or China.”
Brexit Uncertainty
Philip acknowledges that while the UK is nicely placed in terms of shipping routes and airports for getting products out, he currently avoids it due to uncertainty since Brexit. “If I work with an Indian or a Chinese CMO, I know that once I import the product back into Europe, I have to fully analyse it.”
He questions, “Will the mutual recognition agreement between the UK and EMEA remain in place? If I now suddenly outsource 100 million tablet manufacturing and packaging to a CMO in the UK, how long before this decision comes back to haunt me?”
Dig deeper with sustainability
“Sustainability is a big word,” says Philip. When looking at a CMO, he considers how to measure or evaluate their sustainability. “Do they have solar panels on the roof? Good. What does it mean to me? What percentage of the electricity is generated by that? What do they do if it’s been cloudy and snowing? Do they have a way to clean it to continue generating the electricity? Or are they forced to go to alternative sources?”
Philip encourages looking at every process to find better ways of doing things. “Small wins are also important. Simply look at what you do. Isn’t there an easier way to do it?”
He shares an example of changing the process to save costs. “We used to get the product packaged at a site, close to the French border, and then shipped back to us before shipping right back past their front door on its way to Spain or Italy.” By changing to a process of shipping directly Daiichi Sankyo have saved 800 kilometres of unnecessary travel and around 200,000 euros a year.
ESG is More Than Just CO2
Philip believes that ESG is more than just emissions, giving an example of local sourcing: “We have a canteen at work, so all employees can get some food from local farmers. So you support bringing the money back into the community.”
He also considers offering housing or kindergarten to employees as part of sustainability.
“To me, that becomes part of sustainability. I can help my employees to sustain their income and show they are important.”
Join Philip Coetzee’s roundtable on RFP/RFQs by registering to CDMO Live 2024.
LIVE on June 13 2024 
