Article

Are Preferred Provider Agreements the Best Model For Outsourced Manufacturing?

Source: ISR Reports

By Kate Hammeke

Whether it is rooted in nature or nurture, it’s part of our human condition: When we find something we like, we go back to it again and again. This could be a favorite city, restaurant, brand of vehicle, fit of jeans, toothpaste. Anything. When it comes to making business purchase decisions, the same human mannerisms underlie our decision-making process, and we tend to go back to what is familiar. While there is a cliché expressing the opposite (familiarity breeds contempt), there is scientific data supporting the notion that familiarity breeds comfort, or that people develop a preference for things simply because they are familiar to them. This concept is known as the mere-exposure effect or the familiarity principle.

There are benefits to this aspect of our human nature. It reduces risks associated with change and fosters stability as well as gives us an idea of what to expect. ISR data from our Contract Manufacturer Quality Benchmarking studies shows that one of the leading selection factors in choosing a CMO/CDMO is a prior positive experience with the service provider. Prior positive experience ranked between 4 and 7 (depending on manufacturing category) as the single most important selection attribute among 28 different supplier characteristics. Additionally, this attribute was identified as a Top 5 trait by roughly one-quarter of respondents across all manufacturing categories. This means that a prior positive experience outranks traits like scientific knowledge, experience level of staff, and among drug product manufacturers, available dosage forms.

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