In the pharmaceutical industry, where relationships are typically long-term and the costs of switching suppliers are often prohibitive, a robust and collaborative planning phase for supplier selection is critical.

Poor supplier selection decisions can cascade into compromised product quality, supply chain vulnerabilities, delayed market entry, and ultimately, reduced patient access to life-saving therapies.

Yet despite these high stakes, supplier selection in pharma often falls into predictable traps: procurement teams optimizing purely for cost while overlooking technical capabilities, or R&D leaders prioritizing scientific excellence while neglecting commercial viability and long-term risk.

These siloed approaches create blind spots that lead to costly rework, project delays,and partnerships that fail to deliver their full potential.

This playbook presents a different path—one built on cross-functional collaboration, strategic alignment, and rigorous evaluation. The methodologies outlined here move beyond transactional supplier selection toward building true partnerships that drive innovation, ensure compliance, and accelerate patient access to critical medicines.

From initial strategic planning through deep partnership alignment, this guide provides your roadmap to building resilient, value-generating relationships that deliver sustainable competitive advantage and ultimately serve the patients who depend on your therapies.

The Strategic Stakes – Why Supplier Selection Matters

The selection of a new CDMO partner for your innovative drug development, or an additional API manufacturer for your critical medicine, is far more than a purchasing decision; it’s a foundational strategic decision that can dictate product quality and competitiveness, supply chain resilience, speed to market, patient access to vital medicines, and even your company’s long-term prospects.

Yet, despite its profound impact, the supplier selection process often falls into a common trap: siloed execution.

The Pitfall of Siloed Selection

In many organizations, supplier selection is either exclusively the domain of the procurement team (in larger companies) or, conversely, handled by a Founder, Head of R&D, or other senior leader (in smaller, emerging biotechs). While these individuals bring crucial perspectives, a singular focus, no matter how well-intentioned, can lead to significant blind spots:

Procurement’s Lens (Cost Focus): A procurement team, if isolated, might over optimize for price, potentially overlooking critical technical capabilities, quality system robustness, or long-term cultural fit that are vital for complex pharma manufacturing.

Leadership’s Lens (Technical/Speed Focus): A Founder or R&D head, while driven by scientific excellence and speed to clinic, might inadvertently neglect commercial terms, supply chain risk, or the supplier’s long-term strategy.

This siloed approach often results in a “solution” that addresses one problem while inadvertently creating several others down the line, leading to costly rework, delays, or even project failures.

“Pharma can be very siloed, which can be a barrier to innovation and collaboration. Procurement has the best seat in the house to see across the value chain and highlight opportunities to your business partners that they may not see. What is obvious to you may not be obvious to everyone else.” – Jill Robbins, Fractional CPO and Biotech advisor

Strategic Foundations for Supplier Selection

The most successful supplier selection projects are born from deep collaboration during the planning and execution phases. This means assembling a cross-functional core team before you even think about contacting potential suppliers.

The Essential Team Members

Depending on the size and resources of your company, this may look different, but each stakeholder brings a unique and indispensable perspective:

Procurement: Process ownership, market intelligence, commercial strategy, negotiation expertise.

Quality Assurance (QA): GxP compliance, audit history, quality systems, regulatory adherence.

Technical Operations/R&D: Scientific capabilities, process fit, technology transfer requirements, project management capability, intellectual property considerations.

Supply Chain/Planning: Demand forecasts, logistics, lead time expectations, inventory management, resilience needs.

Regulatory Affairs: Market-specific requirements, documentation, submission support.

Legal: Contractual terms, liability, and intellectual property protection.

Finance: Total Cost of Ownership (TCO) calculations, financial stability assessment, cash flow management.

Making It Work for Smaller Organizations

If you are a small organization, without these individual key stakeholders, you can still bring together a diverse range of viewpoints in creative ways, for example:

• • Assigning roles to team members to advocate for specific perspectives

• • Leaning on trusted external advisers or consultants

• • Using AI to prompt for specific points of view

By engaging these diverse viewpoints from the outset, you uncover potential “unseen problems” and opportunities, ensuring that the selection criteria are holistic, robust, and aligned with the company’s overarching strategic goals.

Defining Your North Star: Aligning Scope, Strategy, and Supplier Goal

The team’s first task is to agree on a crystal-clear understanding of what you want to achieve and what the supplier needs to deliver. This is your “North Star” for the entire process.

Clearly Defined Scope of Work (SOW)

This is non-negotiable. For an API, this means precise chemical specifications, purity requirements, analytical methods, regulatory pathways, packaging, and stability data needs. For a CDMO, it includes specific processes (e.g., fermentation, purification, fill-finish), batch sizes, analytical support, and regulatory support expectations. Ambiguity here leads to incomparable bids and disputes.

User Requirements Specification (URS)

What are the functional and performance requirements from the perspective of the end-users (e.g., R&D, Production)?

Strategic Objective

Is the primary goal cost reduction, risk mitigation (e.g., dual sourcing, geographic diversification), accelerating a new product launch, or driving innovation? This objective will heavily influence your evaluation criteria and negotiation strategy.

Know Your Ideal Partner – The Art of Supplier Profiling

Just as marketing teams develop “customer profiles” to understand their target audience, procurement teams should create “supplier profiles” to define the attributes of their ideal partner. This goes beyond a simple checklist and delves into the nuances that make a partnership truly successful.

Why Profiles Matter

Creating a supplier profile isn’t just a planning exercise—it’s a strategic alignment tool. It helps internal stakeholders calibrate expectations, avoid miscommunication, and stay focused on what truly matters. When everyone is working from the same definition of “ideal,” trade-offs become clearer and decisions more defensible.

Creating Your Target Profile

It is really useful to create a profile of your ideal supplier before moving on to the next stage. You can even give the target profile a name—this way your team can have a shorthand for what their ideal partner is like. This can then be front of the team members’ minds throughout the project, and can prompt the question: Does this supplier match our target profile? If not, should we be considering them?

Bringing the Team Into the Conversation

Once the profile is drafted, share it with the broader team and invite feedback. Different functions may highlight blind spots or suggest refinements based on their priorities—QA might flag regulatory nuances, while Finance could raise concerns about long-term viability. This collaborative shaping ensures the profile reflects both strategic goals and operational realities.

“We involved a lot of different stakeholders to understand what the suppliers deliver, how responsive they are, what is their innovation capability, what is their communication style, what is their worldwide presence and their readiness to collaborate with us.” – Kateryna Holovnia, Head of Procurement, Dechra Pharmaceuticals

Key Profile Attributes

Geographic Footprint and Resilience

Do you need a local partner for agility, or a global network for risk diversification? Are multi-site capabilities essential for business continuity?

Core Competency and Specialization

Are you seeking a generalist with broad capabilities or a highly specialized expert?

Quality and Regulatory History

Beyond basic certifications, what is their track record with major health authorities (FDA, EMA)? How robust is their Quality Management System (QMS)?

Innovation and R&D Alignment

Are they merely a service provider or a potential innovation partner? Do they invest in R&D, offer new technologies, or show a willingness to co-develop solutions?

Communication Style and Cultural Fit

Is their communication transparent, proactive, and responsive? Do their values and working style align with your organization?

Business Model, Size, and Fit

Are they structured to handle your volume and complexity? Is your business significant enough to be a priority for them?

Financial Health

A stable financial foundation is critical for long-term supply security.

Environmental, Social, and Governance

Do their sustainability practices, labor standards, and ethical governance align with your company’s values and compliance?

Crafting Compelling RFx Documents

Once your internal planning is complete, your “North Star” is clear, and your ideal supplier profile is defined, it’s time to translate that into the formal documents that will engage the market.

Issuing the RFx and Managing Q&A

Issuance: Send documents to all pre-qualified suppliers simultaneously to ensure fairness.

Q&A Period: Establish a formal question-and-answer period with centralized communication and transparent answers shared with all participants.

Submission Timeframe: Allow appropriate time based on complexity (RFI: 1-3 weeks, RFQ: 2-4 weeks, RFP: 4-8 weeks).

Essential RFx Sections

1. 1. Executive Summary/Introduction: Briefly introduce your company, the project, and the purpose of the RFx. Hook the supplier’s interest.
      
      
   2. Company Background & Project Overview: Provide enough context for the supplier to understand your business and the strategic importance of this project.
      
      
   3. Detailed Scope of Work (SOW) / Requirements: This is the heart of your RFx. Be as specific as possible.
      
      
   4. Quality & Regulatory Expectations: Outline your Quality Management System (QMS) requirements, GxP compliance expectations, audit frequency, and any specific regulatory filings or support needed.
      
      
   5. Commercial Requirements: Specify your preferred pricing model, payment terms, contract duration, and any desired incentives or penalties.
      
      
   6. Supplier Information Request: Ask for details about their company, relevant experience, capabilities, and capacity.
      
      
   7. Evaluation Criteria: Crucially, state how you will evaluate their response. This signals your priorities and guides their response.
      
      
   8. Timeline & Process: Clearly outline the key dates and process steps.

Ensuring Clarity and Comparability

• • Standardized Format: Provide a template or clear instructions on response structure

• • Specific Questions: Avoid open-ended questions; ask for quantifiable data

• • Q&A Process: Establish a formal Q&A period for clarification

“By striking the right balance of having a very specific and well-defined scope of work and a really clear objective built into your RFx, you can ensure that the candidates will really be able to understand your needs and provide the best possible solutions.” – Matthew Holt, Founder and Managing Director, Collaborative Sourcing

The 5-Cs Evaluation Framework

Before you send your RFx to any candidates, you need to decide how you are going to evaluate their responses. Collaborative Sourcing employs a signature 5-Cs Methodology for supplier evaluation of CDMOs, API, and other material manufacturers.

The power of this approach lies in defining the evaluation criteria, specific metrics, and their weighting upfront as a cross-functional team.

This minimizes subjectivity, accelerates decision-making, and ensures the selected supplier is the best fit across all critical dimensions.

The 5-C’s Methodology for Structuring a Supplier Evaluation Matrix

The Five Cs

1. Capability

Focus: Does the supplier possess the technical expertise, operational capacity, and proven track record to meet your specific requirements?

Metrics: Relevant certifications, specific equipment and technology, process capabilities, R&D resources, and successful case studies for similar projects.

2. Capacity

Focus: Can the supplier meet your current and projected volume demands, and can they scale with your future growth?

Metrics: Current production utilization rates, available capacity, lead times, historical on-time delivery rates, and demonstrated ability to expand operations.

3. Cost

Focus: Beyond the initial price, what is the true, long-term financial impact of partnering with this supplier?

Metrics: Unit price, payment terms, logistics costs, quality-related costs, internal management time, and Total Cost of Ownership (TCO).

4. Compliance

Focus: Does the supplier adhere to all relevant regulatory, quality, safety, and ethical standards?

Metrics: Regulatory audit history, Quality Management System maturity, data integrity practices, environmental performance, and adherence to industry guidelines.

5. Collaboration

Focus: How well does the supplier integrate with your team, communicate, and approach problem-solving?

Metrics: Responsiveness to inquiries, transparency in sharing challenges, willingness to engage in joint development, cultural alignment, and client references.

Implementation

By collectively assigning weights to each of these ‘C’s (e.g., Capacity 30%, Cost 25%, Capability 20%, Compliance 15%, Collaboration 10%) and scoring each supplier against specific metrics, your team can quickly and objectively arrive at a data-driven decision.

From Engagement to Selection – The Complete Process

Building Your Long-List

Create a comprehensive but focused list of potential candidates using relevant databases and industry resources.

For API manufacturers, the EDQM Certification Search Database can be invaluable.

For CDMOs, conference exhibitor lists and specialized databases provide good starting points.

Vendor Evaluation Matrix: A Practical Tool for Supplier Comparison

To support structured, cross-functional decision-making, Collaborative Sourcing has developed a simple Vendor Evaluation Matrix. It enables teams to assess potential suppliers across eight key dimensions.

Each dimension can be scored and averaged to support objective comparison and facilitate team alignment during shortlisting and final selection.

Download the vendor evaluation matrix

Evaluation & Shortlisting

Your cross-functional team evaluates responses using your pre-defined 5-Cs framework:

Team Scoring: Each member scores suppliers against agreed metrics.

Consolidation & Weighting: Apply predetermined weightings to generate objective scores.

Shortlist Selection: Identify top 2-3 candidates for deeper evaluation.

Deep Dive & On-site Assessment

Site Visits: Schedule visits to shortlisted suppliers’ facilities to assess:

• • Capabilities and capacity firsthand

• • Quality systems in action

• • Collaboration potential and culture

• • Operational excellence and compliance

Independent References: Request and contact multiple references to understand actual performance with other partners.

Alignment & Shared Vision

Before contract negotiation, align on shared vision through open dialogue about:

• • Strategic objectives from both parties

• • Mutual expectations and success criteria

• • Partnership approach and working principles

• • Long-term goals and value creation opportunities

“It needs CPOs and their leadership teams to have the credibility, the trust and the ability to deliver on promises. You have to make big promises in this space sometimes. But once you are able to cross that bridge, it opens up an incredible world.” – Len DeCandia, former Chief Procurement Officer, Johnson & Johnson

Managing Timelines Realistically

Strategic supplier selection in the pharmaceutical industry can be done at speed, but should not be done in haste. It’s not the fastest to start, but the fastest to finish, that wins the race—much like the tortoise and the hare.

The Reality of Timelines

A thorough, well-planned start, though seemingly slower, prevents costly detours and ensures a faster, more successful conclusion. The planning phase itself requires time and internal resources.

Typical Planning Phase Components & Timelines:

• • Internal Stakeholder Alignment & Team Formation: 1-2 weeks

• • Supplier Profiling & Criteria Definition: 1-2 weeks

• • Detailed SOW & URS Development: 4-8 weeks

• • Market Research & Initial Long-List Generation: 2-4 weeks

• • RFx Document Design & Writing: 2-4 weeks

From the moment you decide to go to market, the planning and RFx development phase alone can take a few months before you even send out your first RFI/RFP.

Managing Expectations

It is absolutely critical that these realistic timelines are communicated and understood by all stakeholders from the outset. This manages expectations, secures necessary internal resources, and prevents frustration later in the process.

For smaller companies that can quickly achieve alignment between team members, you may be able to complete all of the planning phase in a day or two. For larger organizations, with multiple stakeholders and decision makers to consider, it can take a few weeks or even months.

The Investment Pays Off

Remember, the next supplier selection project you undertake could be make-or-break for your organization. Be prepared to build a collaborative team, make data-driven decisions, work at speed, while being creative and curious.

Building Your Long-List and Initial Outreach

With your RFx documents finalized, the next step is to formally engage with your long-listed potential suppliers. This phase is about structured information exchange, ensuring fairness, and gathering the data needed for robust evaluation. A fundamental step in selecting the right partner for your project is creating a long-list of potential candidates. The list should be comprehensive but also focused on companies that fit your target profile.

Finding the Right Manufacturing Partner: Key Databases to Explore

Several databases can help streamline your search for qualified manufacturers or CDMOs, depending on your specific needs:

For API manufacturers seeking EU registration:

If you’re seeking a manufacturer of a specific active pharmaceutical ingredient (API) that can be registered swiftly in the European Union, the EDQM Certification Search Database is a valuable resource. It allows you to search by substance name, monograph number, or CEP holder, filter by certificate status (e.g., VALID, EXPIRED, WITHDRAWN), and identify current holders of a Certificate of Suitability (CEP).

CDMO Identification and Benchmarking

Publicly available, comprehensive databases for contract development and manufacturing organizations (CDMOs) are limited. However, you can:

• • Review exhibitor lists from industry conferences and events tailored to your therapeutic area or modality

• • Explore curated directories published by trade associations or event organizers

For deeper insights, specialists such as Collaborative Sourcing can offer clients access to a proprietary CDMO database to enable targeted searches based on:

• • Technical capabilities (e.g., sterile fill-finish, high-potency handling)

• • Geographic footprint or regional specialization

• • Regulatory experience and therapeutic focus

With your target supplier profile clearly defined, utilize relevant databases to identify and compile a manageable long-list of potential candidates. This initial list must be appropriately scaled, given the subsequent need for individual engagement to verify each company’s capabilities and interest in your specific project.

Initial Contact and Pre-Qualification

The next step is to contact each of these companies in your long-list to verify their interest in your project. This enables you to make the first contact with your potential future partner, so it’s important that you start the communication in the right way.

Key activities include:

• • Verify that you have the contact details of the right person in the organisation

• • Get a sense of immediate interest in your project from their early communication

• • Assess their responsiveness and professionalism

This process creates your list of pre-qualified suppliers – those who have confirmed both capability and genuine interest in your project.

Securing Information and Managing the RFx Process

Protecting Your Innovation: The Non-Disclosure Agreement (NDA)

Before any sensitive information is shared – and certainly before sending out your detailed RFx documents – a Non-Disclosure Agreement (NDA) is necessary. In an industry where intellectual property (IP) is often your most valuable asset, this step cannot be overstated.

Purpose: The NDA legally protects your confidential information, including proprietary processes, formulations, clinical data, and strategic plans, from unauthorized disclosure or use by the potential supplier.

Key Considerations: Ensure your NDA is robust, covers all types of information you might share (verbal, written, digital), specifies the duration of the confidentiality obligation, and outlines the consequences of a breach.

Process: Have your legal team or external legal counsel draft or review the NDA. It should be signed by authorized representatives of both your organization and the potential supplier before any substantive information exchange begins. This is not a mere formality; it’s your first line of defence for your most sensitive assets.

Issuing the RFx and Managing the Q&A Process

Once NDAs are in place, you can formally issue your RFI, RFP, or RFQ to the identified potential candidates.

Issuance: Send the documents to all pre-qualified suppliers simultaneously to ensure a fair process. Provide clear instructions on submission format, required content, and the submission deadline.

Q&A Period: Establish a formal question-and-answer (Q&A) period. This is crucial for clarifying ambiguities in your RFx and ensuring all suppliers are bidding on the same understanding.

Centralized Communication: All questions should be submitted through a single, designated channel (e.g., an online portal, a specific email address).

Transparent Answers: All questions and their corresponding answers should be anonymized (if appropriate) and shared with all participating suppliers. This maintains a level playing field and prevents any one supplier from having an information advantage.

 

Submission Timeframes

How long is the “right” amount of time to give suppliers to submit their responses? This depends on the complexity of your RFx:

• • RFI: Typically 1-3 weeks

• • RFQ: 2-4 weeks for standard products

• • RFP (Complex Pharma Projects): 4-8 weeks, sometimes longer for highly intricate CDMO or API development projects

Remember the analogy – it’s not the fastest to start, but the fastest to finish, that wins the race. Rushing the submission period can lead to incomplete or inaccurate proposals, requiring more Q&A and rework later.

Provide enough time for suppliers to genuinely understand your needs and craft a thoughtful, high-quality response.

Evaluation, Shortlisting, and Managing Outcomes

Once the submission deadline passes, your cross-functional core team evaluates the received proposals using your pre-defined evaluation criteria.

Using Your Evaluation Matrix to Score and Rank

Your pre-defined evaluation matrix built around Collaborative Sourcing’s 5-Cs Methodology (Capability, Capacity, Cost, Compliance, Collaboration) becomes your objective scoring tool.

Team Scoring: Each member of the cross-functional team (Procurement, Quality, R&D, Supply Chain, Finance, etc.) can independently score each supplier’s response against the agreed-upon metrics for each of the 5 Cs. Alternatively, assign specific areas of evaluation to specific roles within your team (e.g. Technical team scores the Capability section, Quality team scores the Compliance section etc.)

Consolidation & Weighting: Consolidate the individual scores and apply the pre-determined weighting to each ‘C’ (e.g., Quality 30%, Cost 25%, Capability 20%, Compliance 15%, Collaboration 10%). This generates an objective, data-driven overall score for each supplier.

Initial Ranking: Based on these scores, you will have a clear ranking of all responding suppliers.

Creating a Shortlist: The Top 2-3 Candidates

From your initial ranking, identify the top 2-3 candidates who are the strongest contenders. This shortlist will proceed to the next, more intensive phase of evaluation.

Addressing Red Flags and Nuances

While the scores provide a crucial objective foundation, they can’t capture the full picture. If, during the RFx process, any team member has identified red flags (e.g., disrespectful behavior in communications, concerning negative media coverage, a perceived lack of transparency, or a significant cultural mismatch) that aren’t directly reflected in the numerical scores, it is imperative to raise these to the team.

Open Discussion: Create a safe space for the team to openly discuss these qualitative observations.

Holistic Review: These insights must be reviewed and considered alongside the quantitative scores. A high score on paper can be undermined by a critical qualitative concern that could jeopardize the long-term partnership.

Overall Fit: Ensure your top 2-3 candidates represent the best overall fit, encompassing not just the highest score, but also strong qualitative alignment, unique innovative proposals, and a cultural compatibility that promises a truly collaborative relationship.

Informing Unsuccessful Candidates: Respectful Closure

This is a critical, often overlooked, step that impacts your organization’s reputation in the market. Informing unsuccessful candidates should be done respectfully, honestly, and collaboratively.

Timeliness: Notify them promptly once a shortlist has been finalized. Do not leave them waiting indefinitely.

Honest Feedback (where appropriate): Offer to provide constructive feedback on why their proposal was not selected. This helps them improve for future opportunities and builds goodwill. Be prepared to articulate specific areas where they fell short against your criteria.

Maintain Relationships: Even if a supplier isn’t right for this project, they might be a perfect fit for a future need. A respectful rejection leaves the door open for future collaboration. Avoid burning bridges.

On-site Assessment and Partnership Alignment

With your shortlist established, it’s time to move beyond written proposals and engage in a deeper, in-person assessment. This phase provides invaluable qualitative insights that cannot be gleaned from documents alone and sets the foundation for successful long-term partnerships.

Site visits are non-negotiable for critical pharma suppliers (e.g., API manufacturers, CDMOs). Schedule visits for your core team to the shortlisted suppliers’ facilities.

What to Assess In-Person:

Capabilities: Observe their operations, equipment, and processes firsthand. Are their claims in the RFx truly reflected in their facility?

Capacity: Gain a visual understanding of their production lines, warehousing, and potential for scale. Discuss their current utilization and expansion plans.

Quality & Compliance: Witness their Quality Management System (QMS) in action. Observe cleanliness, adherence to procedures, and staff training. Engage with their QA team.

Collaboration Potential: Pay close attention to their communication style, willingness to answer tough questions, and how their teams interact. Do they seem genuinely interested in partnership?

Culture: Does their company culture align with yours? Are their employees engaged and knowledgeable?

Cross-Functional Team Participation

Ensure key members of your cross-functional team (e.g., R&D, Quality, Operations, Procurement) participate in these visits. Each will observe different critical aspects and provide unique perspectives on the supplier’s suitability.

The Importance of Site Visits:

“Site Visits are essential. You have to go to the facility and check it out. I like to talk to the workers, the operators themselves, because the management is going to paint a nice picture. If you talk to the operators and visit the facility, you can have a good sense if this is genuine.”

Firelli Alonso, ConsultFi Biologics

 

“Customer relationships account for 50% of your success rate with a CDMO. You can have a technically excellent CDMO, but if the relationship isn’t there, it can be a disaster.” The site visit is crucial – what happens between corridors, observing operators, sensing the atmosphere – these indicators help form judgement.”

Julien Laizé, Director of External Manufacturing CTM, Valneva

 

“Every CDMO is going to give you the Disney effect. Site Visits move beyond surface-level assessments to see what’s ‘below the street’. I want to see how that organisation is humming below the surface.”

John Philips, President at Innopath Consulting

 

“You need to do comprehensive site visits and risk assessments when selecting a CDMO partner. I’ve seen pigeons inside a pharmaceutical plant.” “I’ve seen cats jumping from pallet to pallet in a GMP finished goods warehouse, supposedly as part of their pest control practices.”

Herman Bozenhardt, Bozenhardt Consulting Services

 

Deep Dive Presentations and Workshops

Invite shortlisted suppliers for more in-depth presentations or collaborative workshops. This allows for detailed Q&A, scenario planning, and a chance to explore complex technical challenges together.

Independent References: Validating Performance

Request four references from each candidate and speak to each of them. The more references you can speak to, the better. You want to see how the candidate actually performs with its partners – both good experiences and challenges they may have faced.

Key Reference Questions:

• • How have they managed complex projects?

• • What is their communication style like in practice?

• • Did projects or products stick to budget?

• • Were there any significant delays, and how were they handled?

• • How do they respond to unexpected challenges or changes?

• • Would you work with them again?

These conversations provide crucial insights into real-world performance that goes beyond polished presentations and marketing materials.

Alignment & Shared Vision: The Blueprint for Partnership

After the deep dives, references, and site visits, you’ll likely have a very strong sense of your preferred partner. Before moving to contract negotiation, it’s essential to align on a shared vision for the partnership.

Open and Honest Dialogue

Sit down with the leadership of your top candidate(s) and discuss your objectives openly and honestly. Encourage them to do the same. This isn’t about negotiation tactics; it’s about transparency.

Your Objectives: Articulate your strategic rationale for the partnership, your long-term goals, and what success looks like for your organization.

Their Objectives: Actively listen to understand their strategic priorities, their long-term aspirations, and how this partnership fits into their growth plans.

Assessing Alignment

Look for genuine alignment in strategic goals, values, and desired outcomes. Are you both aiming for the same “North Star”? Do your cultures seem compatible for a long-term working relationship?

Crafting the Shared Vision Statement

If there’s strong alignment, collaboratively draft a Joint Statement of Intent for Partnership Negotiation. This non-binding document formally captures your shared vision and guiding principles.

Key Elements:

• • Overarching Purpose: Why are you coming together? (e.g., “to accelerate delivery of life-changing therapies”)

• • Mutual Objectives: What specific goals do you share? (e.g., “scalable, high-quality production,” “continuous improvement”)

• • Guiding Principles: How will you work together? (e.g., “transparency,” “mutual respect,” “problem-solving”)

The Value of Shared Vision

This statement becomes the moral compass for your relationship. When challenges arise or negotiations get tough, you can always refer back to this shared vision to find common ground and ensure decisions serve the overarching partnership goal.

Preparing for Contract Negotiation

By meticulously navigating the engagement, evaluation, and alignment phases, you have moved beyond simply selecting a supplier. You have identified a true partner, understood their capabilities deeply, and established a shared understanding of your collective future.

This rigorous upfront work, though seemingly extensive, is the true secret to building resilient, value-generating relationships in the pharmaceutical industry. The methodologies outlined provide your roadmap to building partnerships that ultimately serve the patients who depend on your life-saving therapies.

Three Pillars of Robust CDMO Contracts

“Contract negotiation are often perceived as a power game, but in reality, it has to be a collaboration.” says Dr. Roxana Timmermans, Global Operations Sourcing, MSD.

“There are no winners or losers—only opportunities for mutual gain. Without a “win-win” mindset, the chances of establishing a long-term relationship diminish significantly.”

When it comes to crafting a solid contract manufacturing contract, Roxana explains three fundamental pillars that deserve careful attention:

1. Technical Specifications

The first pillar centres around the technical and technological aspects.

• • Product Definition: Clearly state the product details, including its purpose, specifications, and intended use.

• • Quantities: Specify the desired production quantities.

• • Market Considerations: Acknowledge the significance of market dynamics. In a regulated industry, adherence to Good Manufacturing Practices (GMP) and quality control standards is paramount.

• • Supply Chain Management: Address minimum order quantities, tiers, and any campaign-related advantages or negotiated pricing adjustments.

2. Obligations and Risk Mitigation

The second pillar revolves around obligations and risk management.

• • Third-Party Intellectual Property (IP) Liability: In extreme cases, how will IP issues be handled? Define governance mechanisms and responsibilities.

• • Indemnifications and Liabilities: Clearly outline indemnification clauses and the types of liabilities involved.

3. Payment Terms and Provisions

The third pillar focuses on practical matters related to payment and contract termination:

• • Payment Timeframe: Specify the number of days within which you must remit payment to the supplier.

• • Shipment Delivery: Detail the logistics of product delivery.

• • Dispute Resolution: Address dispute resolution procedures.

• • Termination Clauses: Don’t underestimate the importance of termination provisions to safeguard both parties.

Roxana says she is surprised by how many people forget about termination clauses. “It’s super important” she says. “Look at the mergers and acquisitions and changes in company control can occur unexpectedly. It’s a very fast-moving landscape at the moment”