Centralizing Vendor Oversight: A Strategic Imperative for Small Biotech

Written by Kieran Canisius

Kieran brings together vendors, investors, growth, clinical and subject matter experts at the forefront of their life science specialties to energetically support clients in overcoming their challenges and find new strategies for success.

April 26, 2024

Why Centralizing Vendor Oversight is a Strategic Imperative for Small Biotech

For biotech companies at the beginning of their journey, strategic alliances with vendors are not just a convenience, but often a necessity. Centralizing vendor oversight is a critical strategy for these companies, providing assurance in areas like regulatory and compliance. Further internal efficiencies can also be realized, freeing up time to focus on core business initiatives.  

Despite this reliance, these external relationships can be challenging to manage when considering the finite resources available to companies in the biotech space.

In this blog post, we’ll explore the rationale for vendor oversight centralization, and understand why such a strategy is a necessity for clinical trial risk mitigation. 


The Crucial Role of Vendor Oversight

Effective vendor oversight in biotech is akin to conducting an orchestra – the many players must perform in sync. If all suppliers are coordinated, sponsors can better maintain compliance and stay on track, protecting their asset on its journey to market.

A lapse in vendor oversight can put this coordination at risk, potentially leading to regulatory noncompliance and project delays that can cost millions in lost revenue and opportunity

Regulation plays a vital role here. Beyond its importance for compliance, stringent adherence to guidelines like ICH E6 and GCP is a business imperative. By ensuring sponsors retain oversight of their vendors, regulation helps conduct the orchestra, keeping things running smoothly.

In December 2022, the European Medicines Agency (EMA) published updated guidance in which they shared fresh insights, packaging them into a handy Q&A guide. This guide serves as a beacon for clinical trial sponsors, illustrating how they can ensure oversight over the tasks they entrust to third-party service partners.


What EU Guidance Says About Third-Party Vendor Oversight

There are three main sources of guidance for sponsors in terms of oversight of vendors they have a written contract with.

The Clinical Trial Regulation (Regulation [EU] No 536/2014) and the Clinical Trial Directive (Directive 2001/20/EC) together allow sponsors to engage vendors to take on any or all of its trial-related tasks.

They also specify that even if the tasks are delegated, the sponsor retains responsibility for ensuring compliance, and specifically conduct, patient safety and data reliability. (See Regulation [EU] No 536/2014 Article 71 and Directive 2005/28/EC Article 7 for details).

More generally, all clinical trials need to comply with the outsourcing requirements in EMA/CHMP/ICH/135/95 Guideline for Good Clinical Practice (GCP), which again states (ICH E6 [R2] 5.2.2) that sponsors must retain oversight of “duties and functions,” including those carried out by vendors.

GCP takes this a step further, requiring sponsors to take a risk-based approach not only to oversight but also to assessing the suitability of vendors. Sponsors must also document processes, for example in SOPs, for evaluating suppliers and overseeing the duties and functions outsourced to them.


Vendor Oversight Solutions in Practice

There are certain measures that sponsors can consider, processes they can follow, and documentation they can manage to mitigate their risk and remain compliant. These actions are often recognized by regulators, signaling that a sponsor is prepared to identify any issue, for example with data quality or problems with digital systems.

Potential measures cover aspects including:

  • People – review resumes, use questionnaires to determine suitability, and check previous experience to pre-qualify candidates
  • Assessments – review people, processes and documentation regularly
  • Systems – ensure digital systems are interoperable and functioning well
  • Documentation – use contracts and work orders, and review documentation regularly, especially to make sure the vendor has the licenses and approvals they need

Documentation is a critical factor for demonstrating oversight, so let’s look at what it should cover in more detail:

  • Access – ensuring access to documentation the vendor manages, such as SOPs, and keeping a log of access
  • Record keeping – including meeting minutes of decisions and actions and archives of emails and other communication
  • Audit trail – keeping track of reviews, communications like help desk tickets, and acknowledgment of reports
  • Process – a documented approach to change management, including for documentation and training
  • Nonconformances – logging and assessing any breaches of contract or regulation


Vendor Oversight for Quality, Safety, and Compliance

The ultimate goal of the biotech vendor oversight process, and the regulations and guidelines that outline requirements, is to keep patients safe and data reliable.

Quality control is critical, and as part of their third-party vendor oversight, biotech sponsors should have a process for continuously monitoring it throughout the clinical trial. This means tracking any deviances and the measures taken to resolve them, including having a clear escalation process set out.

Vendor oversight can only be assured when the sponsor has a clear clinical trial governance structure in place. Not only does this help the sponsor fulfil their regulatory obligations, but it also helps mitigate personal risk. If there is a serious adverse effect during the trial and no governance to ensure the required timelines of notification are met, the sponsor – specifically the CEO of the company – can be held liable.

The advantages of vendor oversight are clear, but in an environment where resources are precious, and expertise is coveted, how do you effectively manage this process?

That’s what we will explore in the next article.





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