Some parts of the in-vitro diagnostics market are experiencing huge growth. As more product developers turn to outsourcing partners to assist with their manufacture, Jesús Rueda, regulatory affairs director at the European Diagnostic Manufacturers Association, tells Jim Banks about the advantages that outsourcing brings and the pitfalls to be avoided.
In-vitro diagnostics (IVDs) are fundamental tools in the diagnosis of many medical conditions and incorporate many different technologies. Alongside the many standard and familiar urine or blood tests, the IVD sector is also a hotbed of innovation.
IVD tests have long been used to measure the concentrations of chemical and biochemical components in a sample, to count or examine cells and to measure other physical properties. Blood tests for glucose levels or electrolytes, for example, are extremely common. They are widely used for disease screening, monitoring therapy and to ensure the safety of blood used in transfusions. In all, around 64% of information held in patient records comes from such diagnostic tests.
Now, with greater understanding of the heterogeneous nature of human and viral genomes in the pathology of disease – and the effect of this on the likely success or failure of a drug – IVDs are becoming increasingly important in developing and prescribing treatments that are more specific to the needs of individual patients.
Innovation brings growth
Jesús Rueda, regulatory affairs director at the European Diagnostic Manufacturers Association (EDMA), says there are many parts to the IVD market, some that are growing fast and others that remain relatively flat, like traditional blood chemistry products. The more innovative products, however, have huge growth potential.
"We are moving towards a system of healthcare that is based on knowledge, in which there is more choice about how to treat different conditions," he says. "For instance, if you are treating hepatitis you need to know what virus is causing it. Knowledge-based care requires more detail. There is also a lot of interest in developing tests to determine whether a patient will react well to a particular treatment or have severe side effects."
EDMA is the industry association that represents the interests of the IVD industry throughout Europe, and its membership comprises over 500 companies involved in the research, development, manufacturing and distribution of IVD products. The organisation aims to publicise and advocate the potential of the IVD industry to transform healthcare systems.
One way in which Rueda believes IVDs could help to achieve such a transformation is through their role in companion diagnostics. This is an area of great interest and significant growth, and it is based on the use of additional tests to look for genetic, proteomic or gene expression markers to predict whether or not a drug will work for a particular patient and what kind of dosage might be appropriate for each individual. Although this is a relatively new field of research, many projects are underway, and many believe that such tests might one day become the norm.
As IVDs become more commonplace and more sophisticated, it is vital to ensure that the processes that underpin their manufacture not only achieve the highest technical standards, but also optimise efficiency. It is increasingly common for manufacturers of IVDs to outsource their production, and as with any outsourcing programme in any industry there are both advantages and potential pitfalls to engaging an external service provider.
The need for speed and efficiency
Outsourcing has become a common feature of many industries over the past decade, and in that time the fundamental drivers for it have changed little, although there has been a great deal of change in how companies approach their relationships with their service providers. When it comes to IVDs, the advantages of outsourcing are not dissimilar to other manufacturing industries, although different standards come into play.
"Developers of medical devices outsource for a number of reasons, but largely to improve efficiency through accessing technologies that they may not have in-house," explains Rueda. "For instance, they may have an assay that they know works well and they need to automate it or move it to a new platform, but they may not have the in-house know-how or the manufacturing technology.
"There are also many of the generic drivers for outsourcing that apply to other industries, such as the fact that economies of scale mean a higher volume of business with a supplier means you get a lower cost per item."
With demand for IVDs growing, outsourcing is partly driven by the need to boost manufacturing capacity, while ensuring that the devices are delivered on time, to the right specifications, at a cost-effective rate and through a process that can be quickly and easily scaled up to meet unpredictable changes in demand.
It is vital, therefore, that a company developing a device finds a service provider that understands these commercial challenges, as well as offering the right quality standards for production of a medical device.
In a regulatory environment that is already strict, and which is likely to make ever-greater demands for evaluation data, an understanding of quality and regulatory requirements is a high priority. For instance, it is essential that IVD manufacturers enter into outsourcing relationships with a full understanding of regulations such as registration, evaluation, authorisation, and restriction of chemical substances (REACH), and can call upon their service providers to help them meet such challenges.
Chain of responsibilities
When choosing a service provider, Rueda believes the most important factor to consider is the quality of the relationship between a manufacturer and its outsourcing partner. There are plenty of lessons that can be learnt from the experience of companies in other industry sectors, but in the manufacture of IVDs it is especially important to ensure the chain of responsibilities is fully understood by both parties. There are many examples of IVD outsourcing relationships that work, but the same problems often arise, and there is always room for improvement.
"There are things that could use a bit more work in terms of the outsourcing relationships," says Rueda. "It is not enough to make a device, you must also demonstrate that the device is safe to use. You must understand all the issues with a device to determine whether a problem, if it occurs, is related to the element that has been outsourced.
"There is still space to streamline the IP relationships in order to determine who is responsible for each part of the technology. You need an integrated quality system – it should be seamless. And there should be great care taken with the auditing of contractors, which is an area where every manufacturer follows its own rules. That is one area of risk."
Risk management is a high priority when engaging a contract manufacturer to make IVDs on an outsourced basis. One of the simplest ways to reduce the risk of an outsourcing deal is to choose a supplier that not only has the right technology, but also the relevant experience and expertise across a wide portfolio of products.
In terms of quality, ISO accreditation is a good indicator, but equally important is a supplier’s track record of communicating effectively with its clients. Outsourcing is a two-way relationship that is often in a state of flux and must have the flexibility to adapt to changes in the market. Close cooperation is essential, not least so that everyone involved in the production of IVDs understands the division of responsibilities.
In short, it is possible up to a point to learn from the experiences of companies in many different industries and apply similar models to the IVD sector. However, the manufacture of medical devices is subject to tighter regulatory control than would apply to most outsourcing deals, and problems in the relationship between developer and manufacturer can quickly eradicate the value of a deal.
"Medical device outsourcing is similar to other sectors in that you need to ensure a good supply chain to deliver devices to market on time," says Rueda. "You need reliable suppliers, so there is an issue of finding outsourcing suppliers who will continue in business for the lifetime of your project. In any industry, you need to ensure that the person you are working with will stay in business for the whole of the life of your product, but especially when it comes to medical devices.
"In this sector, it is not just a question of changing to a new supplier. You would have to go back and revalidate the entire product and all of the work that led up to its development. That means that selecting suppliers can be very complex."
More value, less risk
As the number of applications for IVDs continues to grow, and as their use in innovative areas like companion diagnostics makes the devices more complex, outsourcing will no doubt play a much bigger role. The upside of this is that methods of technology transfer become more mature, and outsourcing partners build a better track record of working with IVD manufacturers, so these relationships should steadily become less complex to initiate and easier to sustain.
All of this is, of course, dependent on IVD companies bearing in mind the key risk factors and modelling the scalability of the contracts into which they enter.
"You need to choose on the basis of quality, and whether the company has a stable business," says Rueda. "You need to check that there is compatibility between your businesses. Look at how the supplier will handle questions from the manufacturer. A good relationship has everything to do with how you resolve any issues that arise, and how you go about fixing things when there are contingencies.
"I would be surprised if there had not been any problems between manufacturers and their outsourcing partners in the IVD sector," he continues. "There have certainly been issues with companies going out of business and with getting the right information on devices. But there are many successful relationships, not just between OEMs but also between IVD companies themselves. Many relationships have gone on for years."
Perhaps the most important factor, however, is that in this industry more than many others an outsourcing deal should be struck with a view to the long term.
"What is needed is for people who outsource to be clear about the responsibilities they retain for the product," says Rueda. "They know their obligations because they can read the regulations, but they need to know who is responsible for each individual element. Take a long-term look at the relationship. After all, the lifecycle of an IVD can be measured in decades."
This article was first published in our sister publication Medical Device Developments.