Bio/pharmaceutical development is becoming increasingly pressurized as companies seek to overcome complex chemistries, supply chain vulnerabilities, and shifting regulatory demands. To learn more about how the traditional transactional CDMO model is giving way to dynamic, risk-based partnerships that incorporate quality oversight, flexible commercial frameworks, and supply chain strategies, The Pharma Navigator spoke with Feng Han, Ph.D., Senior Vice President of Operations, Wilmington PharmaTech.
Evolution of Audit Frameworks
TPN: How are audit frameworks evolving today to support continuous quality oversight, and what role are hybrid or digital auditing tools playing in this transition?
Han: From WPT’s perspective, the shift is from viewing an audit as a point-in-time assessment to viewing quality oversight as an ongoing relationship between the sponsor and the CDMO.
A periodic audit remains important, but it provides only a snapshot. Today, sponsors increasingly want greater visibility into how quality is being managed between audits through ongoing review of deviations, CAPAs [corrective and preventive actions], change controls, OOS/OOT [out-of-specification/out-of-trend] events, batch performance, training, and other quality metrics. Regular communication between the sponsor and the CDMO can help identify trends and address potential risks early.
This also supports a more risk-based approach to auditing. Rather than applying the same level of oversight to every activity, sponsors can focus attention on areas that present the greatest potential impact to product quality, patient safety, or the supply chain. For a CDMO, that means having strong systems for documenting, tracking, and communicating quality events so that the sponsor has confidence in what is happening between formal audits.
Hybrid and digital auditing tools can support this transition. Remote document review, virtual facility walkthroughs, electronic quality management systems, and secure data-sharing platforms can give sponsors access to information without requiring every interaction to wait for an on-site audit. At the same time, on-site audits remain important for evaluating facility practices and day-to-day execution firsthand.
Digital tools complement on-site audits by supporting more continuous quality oversight. The goal is to create regular communication between the sponsor and CDMO, combining periodic on-site assessments with ongoing data, communication, and risk-based monitoring. That allows both sides to identify issues earlier and maintain a stronger focus on quality throughout the lifecycle of a project.
Selection Criteria
TPN: Beyond traditional service-level agreements (SLAs), what key performance indicators (KPIs) or qualitative metrics are now driving final vendor selection?
Han: Cost, capacity, and timelines remain important, but sponsors are increasingly evaluating the overall value and risk a CDMO brings to a program.
Key factors include technical problem-solving, quality and reliability, communication, flexibility, and transparency. Sponsors want a partner that can demonstrate experience with complex chemistry, respond quickly when challenges arise, and maintain quality while adapting to changing program needs.
Metrics such as right-first-time performance, deviation and CAPA trends, batch success, on-time delivery, and technology-transfer readiness are important, but qualitative factors matter as well. A true CDMO partner should bring its own technical expertise to the table, proactively identify risks and opportunities, and offer solutions rather than simply waiting for the client to make every decision. That collaborative approach can have a significant impact on program success.
Sponsors should select a CDMO that can manage complexity, reduce risk, and consistently deliver quality outcomes.
Flexible Commercial Frameworks
TPN: How are commercial frameworks adapting to better align the financial incentives of sponsors and service providers, particularly when managing high-risk, early-stage, or novel-modality drug programs?
Han: Commercial frameworks are becoming more flexible as sponsors and CDMOs recognize that high-risk or early-stage programs often come with significant scientific and technical uncertainty.
The key is aligning the commercial structure with the actual needs and risks of the program, rather than applying the same model to every project. Early development may benefit from phased scopes, milestone-based work, or smaller initial commitments, allowing both sides to make informed decisions as the science develops. The agreement should also define how additional experiments, process changes, and schedule impacts will be evaluated and approved.
For later-stage programs, capacity reservations or capital commitments may need to be linked to realistic forecasts, agreed milestones, and a clear allocation of risk.
Transparency is critical in these models. Clearly defining responsibilities, quality expectations, technology transfer, and change-control processes ensures that both parties understand the risks and requirements at each stage.
A workable commercial framework gives the sponsor flexibility while allowing the CDMO to resource the work and manage technical risk.
Building Supply Chain Resilience
TPN: Geopolitical shifts, trade policies, and single-source dependencies have highlighted vulnerabilities in global supply networks. What proactive strategies are sponsors and service providers co-implementing to safeguard program continuity?
Han: Geopolitical uncertainty has made supply-chain resilience a much more important part of development and manufacturing strategy. The key is to address potential vulnerabilities before they become a disruption.
Sponsors and CDMOs are increasingly looking at dual sourcing, alternative raw-material suppliers, strategic inventory, and identifying critical single-source materials early in development. It is also important to understand where materials are actually coming from, not just the immediate supplier, but the broader supply chain.
We also see greater interest in U.S.-based manufacturing and regional supply options as a way to reduce dependence on a single geography. In an N-1 manufacturing model, the step immediately preceding the final manufacturing step is performed outside the U.S., while the final step is manufactured in the U.S. This can add a U.S. manufacturing component to a global supply chain, but still requires careful management of overseas dependencies, technology transfer, and responsibilities across sites.
For a CDMO, proactive communication is critical. Rather than waiting until a material becomes unavailable or a trade issue affects a project, the CDMO should be actively identifying potential risks, communicating them to the sponsor, and helping develop alternatives.
Supply-chain resilience is a shared responsibility. The strongest approach is a collaborative one where the sponsor and CDMO understand the vulnerabilities together, plan alternatives early, and build enough flexibility into the program to respond when conditions change.
Joint Risk Mitigation
TPN: When unforeseen technical failures or regulatory delays occur during process scale-up or manufacturing, how do high-performing partnerships navigate joint risk mitigation and problem resolution to prevent project derailment?
Han: When unexpected technical or regulatory issues arise, the strongest partnerships focus on solving the problem rather than assigning blame. Early and transparent communication is critical. The sooner both sides understand what happened, the potential impact, and the available options, the more opportunities there are to protect the timeline.
The CDMO should also bring its technical expertise to the table, not simply report the problem to the sponsor. That means investigating root causes, proposing alternatives, evaluating the impact on quality and timelines, and working with the sponsor to agree on a recovery plan, decision owners, and revised milestones.
A structured approach to deviations, CAPAs, change controls, and technical investigations provides the framework, but collaboration is what keeps the project moving. In some cases, that may mean revisiting the process, adjusting the manufacturing strategy, or developing an alternative approach rather than continuing down a path that is no longer viable.
Successful partnerships treat unexpected challenges as shared problems with shared accountability. Clear communication, rapid decision-making, and a willingness from both sides to leverage their expertise can turn an unexpected setback into a manageable adjustment rather than a project derailment.
An Emphasis on Collaboration
TPN: Looking ahead, how do you anticipate the balance between large, full-service, end-to-end providers and specialized, boutique service providers will evolve as sponsors assemble their outsourcing portfolios?
Han: Over the next three to five years, I expect sponsors will continue to use a combination of large, full-service providers and specialized CDMOs, depending on the needs and stage of each program.
Large providers can offer significant scale, global infrastructure, and broad capabilities, which can be valuable for programs requiring many services under one organization. At the same time, specialized CDMOs can offer deeper expertise in specific technologies or complex chemistries, as well as greater flexibility and more direct access to technical decision-makers.
From WPT’s perspective, the trend is less about choosing one model over the other and more about building the right network of partners for each program. Sponsors may increasingly divide work among providers based on where each organization can add the most value, rather than expecting one CDMO to do everything.
This also puts greater emphasis on collaboration and technology transfer between providers. A specialized CDMO needs to be able to integrate effectively into a broader outsourcing strategy and communicate clearly with the sponsor and other partners.
I expect the strongest outsourcing portfolios to be built around each program’s needs, with sponsors selecting partners based on technical expertise, flexibility, quality, and their ability to work collaboratively across the program.
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