Navigating the Impact of New Tariffs: Strategies for Success Amidst Recent Trade Policy Changes

The US Government recently modified their policy to utilize tariffs to in an effort to support the US economy. Significant changes have been announced causing many global organizations to investigate the consequences of the tariffs on their overall product portfolio. Companies need to know the facts and have data to support their decisions.

Product sponsors must identify a site to transfer their product to and the factors which drive those decisions. We utilize the five Cs to help us decide which site to utilize. The first C is Capability. Does the site have the capability, i.e. do they have the production equipment, testing laboratories, warehouse storage conditions and several other product specific systems that are required to produce, store and distribute your product. The second C is Capacity. Will your product be produced on time every time or will you spend money on getting the site ready only to find that the site can’t make your product when your clients need it? Or will the site manufacture in bulk and hold the bulk in inventory causing the holding cost to be greater than the tariff?

The third C is Compliance. I remember finding the perfect CMO and then finding out that the FDA had visited their site 3 months ago and they were receiving a Warning Letter that would potentially delay the launch of my product. The fourth C is for customer service. Customer service includes a PM who will manage the technology transfer, effective communication of issues, inventory, quality systems, and follow up on CAPA’s. The fifth C is for Cost. I realize cost is usually the first item that shareholders ask for, but cost is the last item because it takes a knowledge of the first four Cs to establish the cost. The cost breakdown is important. What are you responsible for, what is the site responsible for and that includes all components, modifications, cleaning, inventory, how many times you can come to the site, man in the plant, batch release.

Worldwide there are approximately 15,000 Contract Manufacturing Organizations (CMO'S) and Contract Development Manufacturing Organizations (CDMO's) but none of these companies will be a perfect fit for your product or service. ProPharma maintains an active database of active CMO/CDMO sites and their headquarters. The database is repopulated each time we conduct a search based on a client’s weighted selection criteria to ensure the most up to date data is being assessed based on the 5 C’s. Our assessment allows the client to ensure that they included the relevant data for decision making.

As a summary you will find in the below diagram the obtained information needed for a successful transfer:

When you have additional questions please feel free to contact us.