Expert Perspectives in KM Between Sponsors and Third Parties

[Author’s note: The authors acknowledge this paper is positioned primarily from the viewpoint of sponsor organizations and welcomes further input and dialogue via the PDA KM Roadmap Task Force to incorporate considerations, best practice and recommendations from third-party providers. The authors wish to thank Jackie Panter and Morten Munk for their collaboration and input to this paper.]

Current state challenges demonstrate widespread ambiguity surrounding the concept of knowledge management (KM) in pharmaceutical quality management.

This lack of clarity and effective application of KM principles impairs the potential value the industry can deliver in achieving higher quality standards and a culture of continuous improvement, and it potentially helps contribute solutions to the ongoing challenge of drug shortages. Effective KM between sponsors and third parties (including but not limited to contract development and manufacturing organizations (CDMOs), contract manufacturing organizations (CMOs) and contract research organizations (CROs)) is a necessity when multiple parties work together in a collaborative activity towards shared objectives. Such shared objectives are the very nature of the partnership, such as asset acquisition, technology transfer, clinical development and trial design and supplying a product or component thereof.

The need for improved KM between sponsors and third parties is evident considering technology transfer findings reported by McKinsey, which noted:

• There exists large variability in telegraphic transfer lead times, ranging from an average of 12 to 30+ months (18-30 months for steriles).
• It takes 5.8 months longer on average to execute technology transfers externally to CMOs.
• Availability of manufacturing process details is identified as the number one pain point, reported by 50% of survey respondents.
• Transfer of knowledge and methods is a key driver to lead time.
• Outsourcing in the biopharmaceutical industry is low at ~30% today [when compared with consumer (~70%) and Automotive (~80%)] and will increase further.

Indeed, these factors will put patients at a greater risk than they are today due to impacts on product availability and quality if nothing is done to mitigate these risks (1, 2). Furthermore, effective KM, inclusive of knowledge sharing and knowledge transfer, is important for an open partnership to ensure products are manufactured safely.

This paper aims to do the following:

1. Define and expand upon KM as an enabler in third party partnerships (specifically as it pertains to contracts, agreements, and SOPs)
2. Explore quality system, tool, and behavioral considerations
3. Provide recommendations and business/use cases for PDA members and industry

Defining Knowledge Management and its relationship to Third Parties

The International Council of Harmonization (ICH)defines KM as:

“a systematic approach to acquiring, analyzing, storing and disseminating information related to products, manufacturing processes and components (3).”

Sources of knowledge include but are not limited to the following:

• Prior knowledge (public domain or internally documented)
• Pharmaceutical development studies
• Technology transfer activities
• Process validation studies over the product lifecycle
• Manufacturing experience
• Innovation
• Clinical development (including study design, risk management and issue management)
• Continual improvement
• Change management activities (3, 4)

Another KM definition, from the American Productivity and Quality Center (APQC), provides a pharma-agnostic perspective:

“The application of a structured process to help information and knowledge flow to the right people at the right time so they can act more efficiently and effectively to find, understand, share, and use knowledge to create value (5).”

Furthermore, there are several KM first principles, which are not all addressed in this introductory paper specific to third parties. One such principle is that a KM strategy must address both explicit and tacit knowledge. According to APQC, explicit knowledge is “knowledge that is conducive to being written down or expressed verbally” and represents ~20% of what knowledge-based organizations know (5). Examples of explicit knowledge are documents, as well as images, videos and other codified knowledge. APQC further defines tacit knowledge as “knowledge that resides in the minds of individuals and is surfaced in response to a situation or action” and represents ~80% of what knowledge-based organizations know (5). Often referred to as know-how, examples of tacit knowledge include expertise, mental models, decision rationale, and many more. While explicit knowledge can typically be transferred more easily, tacit knowledge requires more effort to surface and transfer through people interaction (reflections, questions, discussion, assessments, etc.).

Considering KM as an enabler for information sharing between sponsors and third parties, based on conversations with industry experts, specific high-level KM requirements should include:

1. Defined processes for knowledge access and retention within and between both the sponsor organization and the CDMO/CRO/vendor.
2. A structured approach for which knowledge is important and how such knowledge is managed for a specific purpose within a specific third-party relationship.
3. Up-front expectations on which knowledge is critical between the parties, how knowledge will be used for decision-making and how knowledge will be retained and governed by the organizations.

Additional activities will be required to support these requirements and an overall KM plan between a sponsor and a third party, which could include elements such as a defined common “language” so each organization understands shared terminology and acronyms, a means to track that information is being shared at the right time, as well as a way to share comments between the parties, a process for capturing what is working and what is not working so risks can be proactively mitigated (e.g., after action reviews, risk assessments).

Importantly, there needs to be commitment from both companies that the process will be followed and not bypassed through email or other ways in which information is lost or missed.

There are several key instances involving third party partnerships which would specifically benefit from an intentional, proactive, pragmatic approach to KM, such as:

1. Asset acquisition: KM is crucial during asset acquisition as it ensures that knowledge (both explicit and, more critically, tacit) is not lost in the transition. The importance of KM in these transactions is often overlooked until operations must act on the acquired assets. For example, how does the due diligence process assess the current state of how knowledge is captured, who the critical experts may be, and understand any key gaps in knowledge and corresponding risk? Furthermore, how effective is the knowledge transfer when the transaction closes to ensure no knowledge is lost as it is pulled into the ‘new’ structure?
2. Technology transfer: KM is integral to the technology transfer process, where it is essential to have a structured and detailed process for knowledge transfer (6-8). This includes ensuring that all parties allocate sufficient time and resources to the transfer, recognizing its value and understanding that it forms the foundation for all future activities.
3. The role of contracts and agreements is significant in defining the “rules of the road” for the relationship. Including a KM section in master service agreements to define data and knowledge transfer requirements can facilitate knowledge sharing, particularly regarding critical operational activities.
4. Risk management: KM is seen as a key tool in risk management activities through the ability to document the source information and thought process for risk-based decisions, assuring decision-making is based on accurate information and visibility to the supporting rationale (e.g., level of risk based on what is known, effectiveness of controls, etc.) (9).
5. Clinical KM: A clinical KM framework helps to enhance knowledge sharing and partnerships within clinical development and clinical trial design. It is essential to have KM expectations built into contracts and operations with CROs, vendors and other partners during the lifecycle of phase 1-3 trials (4).
6. Quality culture: A strong, good-quality culture contributing to GxP compliance concerning third parties is intertwined with KM. Effective KM helps foster a culture of excellence (and therefore, a culture of continual improvement, right first time and ultimately, of quality) within organizations and supports GxP compliance, regulatory requirements and decision-making processes (10).

KM as an Enabler in Third Party Partnerships

KM is key to successful product development, approval and lifecycle management, as established in the International Council for Harmonisation Q10: Pharmaceutical Quality System guideline. Regarding third-party partnerships, KM enables effective sponsor/vendor relationships because it ensures a proactive understanding of what information must be shared between companies to successfully meet business and quality goals. It defines what the “information supplier” needs to provide to the “receiving site” and what information the “receiving site” needs to achieve the desired outcome. In addition, it assures the information being shared is organized based on how both organizations use the information. Mature KM provides approaches to ensure both companies are looking at the information supporting the immediate milestone and proactively mitigating risk and planning for long-term goals, for example, through deviation reduction efforts or after-action reviews.

KM is about capturing knowledge to meet the current goals and the needs of the future. Having the right information at the right time can detect problems sooner, and appropriate action may be taken. For example, updating a procedure or triggering a risk review in quality risk management where the impact is better understood due to greater knowledge access can lead to applying the appropriate risk mitigation more quickly. Additional examples where KM practices play a crucial role in ensuring the availability of knowledge (both explicit and tacit) include planning for manufacturing, batch/lot release, submission approval, clinical trial first patient in, license approval and license maintenance of product changes throughout the product lifecycle. Effective KM also improves compliance by ensuring the appropriate information is being used, reduces resources and helps enable timelines to be met by making knowledge requirements visible.

Ineffective or absent KM leads to milestone delays, unnecessary resource expenses and compliance risks. Suppose the information is only organized around how one company uses information. In that case, the other company spends resources and time trying to figure out the other company’s systems and translate them into their own. Unexpected requirements are identified late, causing the use of costly resources to address gaps or repeat work that was performed but can no longer be found. Compliance risks such as inspection observations and submission delays increase due to incomplete document sets or incomplete, missing or erroneous data.

There may be situations where the sponsor intentionally wants to limit knowledge sharing, perhaps out of concerns about protecting intellectual property or other business reasons. During these (hopefully rare) instances, the sponsor should understand the additional risk of limited knowledge transfer, knowledge growth and learning through the partnership. In such situations, the sponsor may wish to take appropriate precautions, including addressing how the quality agreement is structured, being explicit within the quality agreement on the responsibilities of each party and how each quality management system (QMS) will be utilized to achieve desired outcomes.

Solutions and Recommendations for Contracts, Agreements and SOPs

Types of Agreements and basic KM considerations

Effective KM between the parties starts with being set up for success with contracts, agreements, and transparent due diligence to assess alignment in business practices, technical expertise, and quality culture. Three key contracts that should work together are confidentiality or non-disclosure agreements (CDA/NDA), supply agreements and quality agreements. Each of these types of contracts needs to complement each other in the context of working with a third party, using the same definitions and nomenclature where possible. While the CDA/NDAs and supply agreements are legal documents, the quality agreement is simply an agreement on how to perform compliance activities. It needs to be actively referenced in the legally executed supply agreement for disputes and all other compliance activities (including conduct and expectations for GMP, GCP, and GLP inspections). Table 1 provides high-level points to consider for each of the three document types.

Due Diligence

Ideally, the MAH has proactively planned for the specific criteria the third party needs to meet, so it has a guideline against which to assess during due diligence (6). The decision to use a third party needs to involve a fully cross-functional team with expertise in business/legal, technical (process and analytical) and compliance (quality and regulatory) knowledge. It is critical to perform due diligence audits that address culture, quality systems and technical capabilities. Each type of audit will produce areas that need to be addressed through contractual agreements and risks for each difference should be assessed and ranked. Due diligence audit teams should have neutrality and have the authority to be fully transparent in documenting findings. The MAH making the decision to use a third party must be open to addressing issues that arise and be willing to find solutions to critical gaps or even decide to work with an alternate third party. The MAH should maintain the information learned during due diligence. Even if a decision is made not to use a particular third party, the information obtained during the due diligence should be maintained as it may be informative in the future (another KM use case).

Navigating Complexity in Agreements

Such arrangements can become complex, especially when considering the legal obligations of the product owner (the MAH), who is legally responsible for product efficacy, patient safety, quality and regulatory requirements. The MAH may or may not be the contract giver when using a third party to perform either product development or manufacturing. Table 2 provides examples of contract alignment with third-party drug product CDMOs/CMOs using a drug substance or active pharmaceutical ingredient supply to ensure the ability to transfer transparent knowledge to the product owner. Similar considerations would be needed for any third-party supplier, such as excipients, analytical testing providers and stability. As per above, all such contracts and agreements need to be aligned regarding terminology, definitions and necessary activities with the supply contract for legal backing between them and to ensure the MAH can obtain all knowledge related to the product for which they have compliance oversight responsibility. It is recommended that the MAH product team map out relationships across a product’s supply chain to ensure continuity for knowledge sharing in all contracts.

Quality Systems, Tools and Culture

Quality Systems

Both companies must have effective KM systems both internally and when sharing across companies. Third-party relationships depend on effective quality system management for records/data, change control, deviation management, corrective actions and preventative actions (CAPA), Annual Product Review/Periodic Quality Review (APR/PQR), training and audits. Generally, quality agreements, as discussed above, define the responsibilities and communication mechanisms for managing these elements. A breakdown in management of these quality systems can lead to audit findings, submission discrepancies and patient supply or safety risks. Therefore, it is common for the quality leadership of both companies to hold a periodic joint meeting to review all quality issues and assure alignment and effective communication. Both companies shall collect, evaluate and learn from the product quality data submitted (e.g., the basis for quality informatics). Such informatics tools should be linked to quality risk management as an early warning signal to efficiently assess and resolve routine issues and focus on those scientific issues that pose particular challenges. A core area of product quality and R&D quality informatics and compliance shall be based on quality intelligence production through advanced data/information analysis and modeling.

Tools and Resources

Tools such as RACI matrices and shared documents or platforms like SharePoint are suggested to align expectations and ensure that the right information goes to the right people. The use of timelines and stage gates in project management is critical. KM ensures that knowledge is properly aligned and shared throughout the project lifecycle, mitigating the risk and cost associated with searching for, waiting on, or (at worst) losing knowledge in third-party partnerships. To achieve this, the tools, processes, and expectations must be clarified at the beginning of the relationship. MAHs need full access to in-house processes and systems for knowledge (both tacit and explicit documentation) associated with the activities executed by third parties (development, clinical research management, manufacturing, etc.). Knowledge should be held jointly and contemporaneously between sponsors and third parties. However, the authors recommend that the MAH utilize in-house systems to hold knowledge related to the product being developed to facilitate appropriate oversight, as the responsibility for this product knowledge lies with the MAH.

Quality Culture and Behaviors

Effective KM between a sponsor and third party is enhanced by a strong quality culture. For a quality culture to exist in the working relationship between parties, it must first exist within each organization. A strong quality culture will go beyond merely allocating resources to remediating issues. It will invest strategically in building culture, processes and capabilities (including digital, intelligence, continuous improvement and operational enablers) to identify and prevent potential issues. Establishing a communication process that allows for safely sharing and discussing mistakes or unexpected events is especially important concerning process and material variability. This approach drives early detection of problems and helps to avoid major failures and deviations.

A safe environment for knowledge sharing should exist within and between parties, in which it is safe to fail or accept mistakes without accusation or retaliation. This sense of psychological safety is a team characteristic that is positively correlated with increased organizational learning and decreased workplace incidents (11). Research on this topic demonstrates that an organization’s culture can shape KM within a team (e.g., effectiveness of after-action reviews/lessons learned), ultimately yielding better outcomes. Psychological safety is more common within stronger relationships, namely, those with shared goals, knowledge and mutual respect (12). Building these relationships, which are integral to establishing a shared quality culture, requires time and trust between a sponsor and a third party.

Considerations for Communicating a Business Case for KM between Sponsors and Third Parties

Communicating a business case for KM is critical for demonstrating how KM can create value for the organization. It helps in understanding and articulating the benefits of KM in terms of decision-making support, regulatory compliance and fostering a quality culture. Business problems can be solved in manufacturing operations, clinical research and design, and securing a vision of the product. A regulatory requirement is that the MAH (as the product owner) is ultimately responsible for retaining all knowledge related to performing the activity. Furthermore, additional complexities may need to be addressed, which could include contractual obligations and joint technologies, as well as any associated costs.

Below is an outline for an example practice guide for employing KM when managing tech transfer with a CMO. A similar practice guide can be used for asset acquisition, a clinical framework for trial design or maintaining GxP compliance. Remember that when communicating with leadership, creating a clear and specific scenario with clear and specific outcomes that KM between third parties will deliver is critical for grabbing attention and gaining buy-in.

Use-case Scenario: Technology Transfer of a Biologic Drug

An MAH (the sponsor) has developed a new biologic drug and is partnering with a third party CMO to assist with tech transfer. To ensure a successful tech transfer, the following KM use case is implemented:

1. MAH Tech Transfer Planning
   

   Establish the Target Product Profile: Before engaging with a third party, the MAH must determine the capabilities the third party must have to manufacture the product successfully. This requires a thorough understanding of the product to be manufactured, typically defined in the Target Product Profile (TPP). The TPP describes the desired characteristics of the drug to be manufactured. For example, the indication, the patient population, the route of administration, the clinical phase, the estimated amount of material to be manufactured, the mechanism of action or target activity, intended storage conditions, intended drug product formulation and finished goods presentation, including device considerations, as well as any other characteristics the intended product should have.

   Establish the Required Third-Party Capability: Once the TPP is in place, the MAH is ready to determine what capabilities the third party must have to successfully manufacture the product based on the TPP. Points of consideration should be the GMP compliance systems, manufacturing scale, Materials requirements and if there are rare or difficult to obtain materials, the overall supply chain and how materials will flow into and out of the third party as well as across the supply chain, if translation will be required, third party history for manufacture at the intended clinical phase.

   MAH Planning KM: The product development records, TPP and third-party capability requirements should be captured by the MAH in a centralized KM system that provides visibility to this information across the organization as well as the decisions being made. This should then be expanded to continue managing the capture of all relevant information as the relationship continues. If multiple third parties are required, having this information templatized may be helpful to allow for fast responses.



2. Establishing Trust and Open Communication
   

   Due Diligence: Before initiating the tech transfer, the sponsor conducts thorough due diligence on the CMO to assess their capabilities and previous experience with similar biologic products. This includes evaluating the CMO’s adherence to industry standards and their existing KM practices.

   Communication Protocol: Both parties agree to a regular meeting schedule and set up secure, shared communication channels. This includes a kick-off meeting where all key stakeholders are present to align on objectives and expectations.



3. Knowledge Transfer Agreements
   

   Quality Agreements: Detailed quality agreements are drafted, specifying the KM responsibilities for each party (MAH and CMO) such as documentation standards, process validation requirements and audit procedures, utilizing a RACI in the agreements.

   Tech Transfer Documents: Comprehensive tech transfer documents are prepared, including detailed process descriptions, equipment requirements, critical process parameters and acceptance criteria for each transfer stage.



4. Creating Shared Knowledge Repositories
   

   Shared KM Platform: The sponsor and the CMO use a cloud-based KM system where all tech transfer documents, process data, metadata, training materials, and production records are stored. This platform should be housed with the MAH and be accessible to authorized personnel from both parties, ensuring transparency and up-to-date information. MAH and CMO should agree on explicit expectations for timely updates of repositories. In addition to timing, the MAH and CMO need to agree on the folder structure for how the information will be stored in the KM platform. For example, the folders could be organized around the manufacturing stage (DS, DP and FG) and further broken down by the applicable stage gates within the manufacturing stages. Another example might be to use a folder structure based on the Submission Common Technical Document structure.

   Real-time Data Sharing: Integration of real-time production monitoring tools allows both parties to view process parameters and adjustments as they occur, facilitating immediate feedback and corrective actions.



5. Developing a KM Plan
   

   KM Plan Creation: The KM plan outlines the procedure for capturing and updating process knowledge, roles and responsibilities, and the timeline for each phase of the tech transfer.

   Review Cycles: Regular review meetings are scheduled to evaluate the effectiveness of the KM plan, with adjustments made based on lessons learned and feedback from operational teams.



6. Continuous Improvement and Learning
   

   Feedback Mechanisms: An online feedback system is established to collect input from all team members involved in the tech transfer. This helps identify bottlenecks and areas for improvement.

   Joint Training Sessions: Both parties participate in joint training sessions covering the specific technologies and processes involved in the drug's production. This includes hands-on training at the CMO site facilitated by experts from the sponsor.



7. Promoting a Collaborative Culture
   

   Incentive Programs: The MAH and CMO establish incentive programs that reward teams for successful knowledge sharing and problem-solving, enhancing motivation and engagement.

   Problem Solving Workshops: Regular workshops are held to discuss potential issues in the production process and explore innovative solutions collaboratively.

Outcome

The meticulous application of KM principles in the tech transfer process leads to a seamless and efficient scale-up of the biologic drug's production. The strong foundation in KM practices results in fewer production delays, higher product quality, and compliance with regulatory standards. Both parties benefit from reduced costs, enhanced trust and a stronger partnership that is prepared to tackle future challenges together.

PDA Case Study: Out-of-Specification Investigation

Conclusion

As this paper has worked to convey, effective KM is not only a regulatory expectation but is indispensable in the pharmaceutical industry as a ‘knowledge industry’ that delivers value based on its ability to apply and grow knowledge. Such KM capability is equally important when working across organizations, such as when sponsors and third parties engage in a contract for services, such as the outsourced manufacture of a product. Knowledge flow must be planned for within and between all organizations involved at the outset and throughout the partnership.

For more information and knowledge on KM, we encourage readers to read our recently published articles on the PDA Letter, Advancing the Industry Dialogue on KM in Support of PQS Effectiveness, and Uncovering the Symbiotic Link Between KM and AI.

References

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