A licensing agreement is essential when an organization expects it to use its protected intellectual property. Otherwise, a third party cannot legally produce a product and will not receive a trademark infringement complaint. Most contracting agreements will include some or all of the following: the strategic process of the potential donor should also provide a list of the requirements and risks necessary for management. This list contains the nature and location of the required third-party services, the lifespan of a proposed third party, the expected benefits and the timing of the availability of these benefits. Part of the declaration of requirement will focus on the technical transfer, quality and regulatory impact of transferring elements from the supply chain to third parties. Potential risks of increased complexity should be quantified and ways to manage them effectively to ensure safety of care, patient safety and compliance with regulatory expectations should be clearly identified. As with any legally binding agreement, it is important to conduct an appropriate review. For example, is the supplier in the best position to meet the requirements of the organization and can all parties involved be trusted to receive good news and bad news? Outsourcing is best done as part of a general strategic analysis of the optimal supply chain for a given product and not as a purely tactical response to an immediate need. The development of the strategy logically begins with a review of the current and foreseeable supply chains to support the product and market portfolios envisaged by Contract Giver. This revision will focus on changes in current capabilities needed to support the expected future state and will raise the question of what is the best theoretical balance of “make vs buy” to optimize the supply chain in order to support the proposed future state. This optimum is usually a mix of internal activities supported by third parties.
The outcome of the strategy review should be a vision of a supply chain that is achievable for the proposed future portfolio. Quantifying the expected benefits is important, but it is equally important, when it comes to third parties, to quantify the cost and timing of the necessary relational establishment, technical transmission, validation and re-enrollment in the relocation of pharmaceuticals. These costs are in advance, are generally significant, and the magnitude and timing of the availability of the expected benefits must fund these costs if the use of a third party is to be viable. The current administrative costs of a third-party relationship must also be considered part of the total cost of acquisition, as they can significantly increase total costs. Like politics, treaty negotiation is “the art of the possible.” It is unusual for either party to obtain everything they ideally wished and not have it described in the exact wording it would have originally proposed. In this regard, the experience already mentioned is essential in that it allows people to distinguish the content of what needs to be achieved from the form in which that substance is presented. Experience also supports the assessment of offenders – the points that, if they do not agree, prevent the achievement of an acceptable treaty. Introducing external third-party connections into your supply chain inevitably increases complexity, as communication must now come and go outside its own contract giver systems, perhaps overcoming time zone, culture and language barriers during the process. Complexity increases the risk of confusion with the risks associated with security of supply, quality and compliance. Potential risks to patient safety and reputation for additional complexity need to be identified and whether the management required to manage risk is possible and cost-effective at a level acceptable to patients and regulatory authorities.