Planning for Brexit : A case study on the strategic role CDMOs can play for their customers

In this case study, Carl Brookes - vice president of Manufacturing & Supply Chain operations at Kindeva Drug Delivery & product commercialisation manager Francis Mackin explore what CDMOs should be doing to prepare for Brexit.   

Shortly after the 2016 Brexit referendum, it became clear that Brexit’s impact on the pharmaceutical industry would be intricately complex. As the situation unfolded, Kindeva Drug Delivery (then 3M Drug Delivery Systems) acted with a sense of urgency to develop Brexit preparedness plans and ensure continuity of supply for its customers. Planning for Brexit has proven to be an exercise in dynamic project management, navigating uncertainty, and rapid adaptation. It has also proven to be a powerful case study in the leadership and advisory roles that contract development manufacturing organisations (CDMOs) can play in service to their customers.

Deploy scenario planning to position yourself to adapt to all possible outcomes

Brexit planning is a formidable challenge not just because it involves massive change and complexity, but because there have been multiple layers of uncertainty. When a vote of no-confidence in the Theresa May government was tabled in January of 2019, there were at least four feasible outcomes and multiple ways of arriving at each result (Figure 1). While we leveraged internal and external sources to estimate the probability of each outcome occurring, we did not want to merely plan for the most likely outcome. It was important to work with customers to establish playbooks for all feasible outcomes.

A fundamental ingredient in confidently preparing for different scenarios is knowing what questions to ask. These questions should be comprehensive, ranging from transportation to taxes to regulatory filings (Figure 2). We relied on our subject matter experts, customer input and external advisors to fully understand each potential scenario’s impact.  As the situation evolved and negotiations progressed, we continued to work with customers to refine these scenario plans.

Act Early with a Customer-Oriented Mentality

Scenario planning is especially useful when it reveals actions that need to be taken urgently, even before a final outcome is known. Before the 2019 vote of no confidence, Kindeva had already proactively worked with many customers to develop strategies to mitigate the impact of a no-deal Brexit. This included starting the long processes of updating Quality Agreements, identifying QC testing sites in the EU, updating product packaging to show the new name of MA holding and testing site, and planning for worst-case port/airport delays.

Why bother acting before the outcome was even known? A singular goal was guiding us: maintain continuity of supply for our customers that were selling products into the European market. With that goal in mind, preemptive actions were often necessary – particularly for activities that have long lead times or high risk of delay. The need to start early is especially pertinent for CDMOs such as Kindeva that focus on complex drug products since actions such as identifying alternate test sites can be more complicated for complex dosage forms compared to simpler dosage forms.

There were times in our Brexit planning when we determined it was necessary to increase inventories before ramping back down. In some cases, we instituted a redesign of supply chain sampling processes to brace for a no-deal scenario. Today, we are prepared to initiate testing and QP release if there is no deal by the end of the year. Importantly, these were decisions made in collaboration with our respective partners, with all parties supportive of the direction taken. Some of these actions may prove to be unnecessary or premature, but they are jointly viewed as the course most likely to ensure continuity of supply.

Initiate Frequent and Early Collaboration with Customers and Tailor Your Brexit Planning to Individual Customer Needs

CDMOs can play unique roles in Brexit planning, with expertise that allows them to act as valuable advisors. But the customer, who owns the product and the MA, needs to own the decision. In Kindeva’s case, each of our customers has different product portfolios, global footprints, and strategic priorities. Naturally, they each had different approaches for confronting the Brexit challenge. Take quality testing as an example. Some customers were more risk-averse and asked to work very early on to set up alternate testing sites in the EU. Other customers preferred to delay the EU site set-up until more information was known. Both approaches are justifiable and come with their own set of challenges and advantages. As a CDMO, Kindeva's job was not to provide a blanket strategy to all customers but to meet each customer's individual needs.

In the case of some customers, Kindeva initiated and drove the Brexit planning forward. Frequent communication with the customer allowed us to inject urgency into the process. Collaboration also allowed us to exchange lessons learned throughout the industry and to bring our domain expertise to the table. For example, Kindeva has a deep understanding of the elaborate quality and regulatory considerations surrounding metered-dose inhalers and other complex dosage forms and we were well-positioned to share that differentiated perspective with our customers. Most importantly, frequent communication enabled the creation of a plan that was well-tailored to each customer’s situation and needs.

Moreover, correctly identifying who should participate in the collaboration was invaluable in co-developing Brexit playbooks with customers. Kindeva fostered communication at a function-to-function level, organising and encouraging Quality-to-Quality, Regulatory-to-Regulatory, and Key Account Manager-to-Key Account Manager collaboration. For some customers, we hosted planning workshops on specific topics – such as how to approach batch release samples and how to ship them in the future – which enabled cross-functional collaboration. Due to the complexities of the challenge, we could not pin the responsibility for Brexit planning on a single person or even a single function. We needed to engage expertise at every functional level and encourage customers to do the same.

Conclusion

Planning for Brexit scenarios in the pharma industry has been a landmark activity, representing a multi-dimensional challenge with rapidly evolving assumptions. But the work is still ongoing. In the remaining months and years, CDMOs can still bring value to their customers by implementing the best practices described in this article. Beyond Brexit, pharma companies should look to their CDMOs to be more than just transactional business partners. CDMOs can act as critical advisors, leading customers to make well-informed, data-driven decisions about their products and supply chain.