Building Robust Supply Chains to Prevent Drug Shortages

Recent global disruptions highlighted the vulnerability of pharma supply chains and the need to optimize for agility and robustness to prevent drug shortages.

Contents

Overview

The COVID-19 pandemic, geopolitical tensions, and evolving regulations and business practices are prompting biopharmaceutical organizations to reassess their relationships with supply chain partners. As a form of protection against future disruptions, there is a growing chorus of industry experts calling for elevating these important relationships from transactional to strategic. Underlying the thinking taking place about building robust supply chains for the future is the realization that post-pandemic logistics, transportation, manufacturing, and financing environments are going to be radically different from pre-pandemic times and adjustments are needed to prevent interruptions to the supply of life-changing therapies to patients.

Context

The panelists discussed the effects of rising geopolitical tensions, natural disasters, and regulatory complexity on the biopharma supply chain and how companies can prepare for future disruptions by reevaluating their relationships with contract development and manufacturing organizations (CDMOs) and build strategic partnerships to strengthen their supply chains.

Key Takeaways

  • Recent global disruptions highlighted the vulnerability of pharma supply chains and the need
  • to optimize for agility and robustness to prevent drug shortages
  • Now is the right time to develop updated risk mitigation strategies•
  • For maximum supply chain resiliency, pharma companies should improve their forecasting abilities
  • Potential CDMO partnerships should be evaluated for strategic fit, product value, and performance

Recent supply chain disruptions—most notably the COVID-19 pandemic, the war in Ukraine, and the current high interest rate environment—have shone a spotlight on supply chain issues that always existed, including logistical, transportation, inventory, and financing-related challenges. However, what these multiple crises brought to the forefront were supply chain dependencies that were perhaps not previously fully understood and a need to anticipate and proactively plan for future disruptions to prevent critical drug shortages.

Supply chain disruptions can increase the risk of production errors, deviations, and defects that compromise drug product quality. This in turn exposes companies to compliance risk in the case of a regulatory inspection, which could lead to fines, penalties, or suspended operations which inevitably may impact patients’ lives. To avoid such downstream effects and ensure supply continuity of life-changing therapies to patients, companies need to perform more rigorous risk assessments and be more attentive to where they source from. They need to be more open to partnerships that improve visibility throughout the supply chain, Gil Valadez, senior vice president of global commercial services at PCI, added.
“Our timelines will never go back to the way they were pre-pandemic because now it’s much more expensive to hold inventory. We’ve got to be thinking differently and be more agile than ever before.” Gill Valadez PCI Pharma Services.

The goal of maintaining visibility throughout the supply chain is to ensure its continuity, which often gets tested in times of crises, Jim Fries, CEO of Rx-360, noted. “When we start moving very fast, sometimes the integrity of that supply chain can break down a little bit.” Proactive engagement through clear communication and transparency is vital for managing disruptions, both within the supply base and when liaising with regulatory authorities. Asking different questions from suppliers to assist with solving or determining limitations can be very helpful.

Now is the right time to develop updated risk mitigation strategies.

To ensure continuity of drug product supply—a key prerequisite for meeting patient need and sustaining market pricing—pharma companies need sound, well-evidenced risk mitigation strategies in place. One approach that has gained momentum since the pandemic is tiering suppliers and CDMOs according to their overall importance within an organization’s supply chain and with respect to specific drugs in a company’s portfolio. This approach should ideally be preceded by conducting a systematic risk assessment by cross-functional teams, identifying critical life-saving drug products for which there are no alternatives on the market and where specific CDMO partners have been assessed for suitability and appointed as their preferred supplier.

“You cannot have a plan B and a plan C for everything, but for those drugs that you identify [as high priority], you have to do a complete risk analysis and have risk mitigation plans in place.”Frank Binder, Santen Pharmaceutical.

Culture-wise, Valadez said it is also important to make it acceptable for CDMOs to be proactive in their communication with sponsors when a supplier foresees a potential difficulty in their ability to deliver.
Nurturing a culture of transparency has a dual advantage: it gives pharma companies enough lead time to react and prevent further problems, while also assuring providers that they will not suffer any negative consequences.
“We shouldn’t have to lawyer up and have everybody afraid to admit when they have an issue,” Frank Binder, global head of supply chain management at Santen Pharmaceutical, said.

On the other hand, while dual sourcing and having multiple manufacturing sites represent potential pathways to building supply chain resiliency, these avenues can be theoretical. In practice, with an increasing number of therapies targeted for rare diseases or other niche indications that require only small batches of production, there may not be enough volume to justify the expense and regulatory compliance work that building such redundancy requires—but as the market is changing and smaller patient populations in such disease states become subject to increased research and development, there is a responsibility of pharma companies to ensure that these considerations form part of longer-term planning. As the industry evolves, a total shift in mind-set is required to ensure supply chain integrity.
“It behooves us to be thinking more around strategic partnerships while building a [supply chain] plan together, as opposed to the former days where it was, ‘You supply this and I supply that, and we put it together and you get a finished product, and everything is going to be fine.’” John Ross, PCI Pharma Services.

For maximum supply chain resiliency, pharma companies should improve their forecasting abilities.

When it comes to forecasting disruptions, pharma companies can benefit more from thinking in broad strokes and obtaining capacity-level insights from suppliers rather than from applying complex probabilistic methods.
“One observation is that we see folks going to a PhD-level effort in trying to figure out forecasts before committing,” Valadez said. He suggested that sponsors should instead build transparent forecasts by asking CDMOs straightforward questions that get to the heart of the issue: “At what point do you not have enough capacity to serve us and what’s the wildest potential upside capacity you could meet? Give us that transparency, and we can make a no-regrets commitment that also protects you.”

Another way to improve forecasting capacity is to embrace the advances in technology and digitalization and utilize a collaborative planning tool that allows both the pharma company and its supply chain partners to see planning updates in real-time. This approach is the opposite of having staff work on separate spreadsheets that do not provide visibility into what is happening upstream or downstream.
Yet another way to sharpen forecasts is by developing supply chain plans based on different scenarios, sharing those scenarios with partners, and reserving production capacity based on those plans. “A CDMO in many cases can do that because they’re pooling demand from various customers, which makes the aggregate planning easier than planning SKU by SKU,” Binder said.

The spectrum can range from using AI or other advanced analytical techniques to predicting disruptions and forecasting capacity to developing personal relationships with suppliers and understanding what can be adjusted at any given time, being explicit in what is a “nice to have” delivery for a “must have delivery.” Letting a supplier know that you can be flexible when challenges arise also carries favor and may position your company as a customer of choice.

Potential CDMO partnerships should be evaluated for strategic fit, product value, and performance.

At a strategic level, developing good forecasting abilities is important not only for pharma companies but also for their partners, since it impacts the entire supply chain business model. As part of that, it is crucial that sponsors focus on selecting the right CDMO with the right services rather than on multiplying the number of CDMOs they work with.
“In the face of disruptions, companies don’t merely need suppliers; they need strategic allies. By forging robust partnerships with CDMOs, businesses can transform vulnerabilities into strengths, navigating even the stormiest seas with unwavering resilience” Jen Trevor, Astellas.

One important criterion is to look for CDMOs that have sound business continuity plans and can scale. “Working with a CDMO that has a global network and scale, and who can leverage its broader place in the industry, [enables] a broader suite of creative options to provide tailored solutions,” Valadez said.

Another key metric is assessing whether a CDMO has specific and specialist expertise with the company’s products, Christopher Hamlin, manager, regulatory affairs, CMC at PCI, said. This encompasses the technical experience and expertise to manufacture the drug product needed and the ability to scale-up drug product manufacturing and/or packaging operations as drug products progress through the development lifecycle to commercialization. A major benefit of a CDMO’s in-house scalability is that no additional technical transfers are required; switching CDMOs throughout the product’s lifecycle can be costly and will introduce risk into the supply chain.

Supporting global market supply with a strong track record of regulatory approvals and expertise in global distribution are vital to ensuring life-changing drug products reach patients on time.
Additionally, a key CDMO will have the in-house analytical capabilities and technical transfer expertise to transfer technologies between sites with minimal deviations and have the capacity to propose enhancements, when warranted.
“A partnership is about a logical fit between the sponsor and how they like to conduct business, the CDMO and how they provide services as part of their core, and the target product profile that the sponsor is looking for that CDMO to serve.” John Ross, PCI Pharma Services.

“When you’re looking at things transactionally, you’re not preparing yourself for what could come down the road. And if you don’t have strategic relationships and something bad happens, you’ll be stuck because you won’t be able to immediately take steps to do a course correction.” Jim Fries, Rx-360

Conclusion

Over the next few years, the positive outlook for the biopharma supply chain is that it is likely to experience an increase in global regulatory harmonization. The more sobering outlook is that worsening geopolitical strains and weather patterns may negatively affect global supply chain logistics. However, companies can mitigate those effects by forging strategic relationships with global integrated CDMOs that can help them withstand disruptions.

“We are not going back to the Goldilocks world we believed we were in[prior to the pandemic]. And while we can’t know what is going to happen,for sure there will be challenges that we can only resolve if we work in truepartnerships along the supply chain.”Frank Binder, Santen Pharmaceutical.

The bottom line is that because COVID-19 surfaced the complexities of the pharma supply chain, it accelerated the maturing of the CDMO-sponsor relationship. With increasing utilization of data analytics and AI in the life sciences space, understanding the dynamics of that relationship will accelerate as well, to the point where drug developers will eventually begin designing products with supply chain robustness in mind.
“We come from a long history of focusing on process robustness in the validation of our products. Going forward, we are going to be designing for process and supply chain robustness at the same time.”
John Ross, PCI Pharma Services.

Biographies

Roundtable Discussion with Christopher Hamlin, John Ross and Gil Valadez of PCI Pharma Services, Dr. Frank Binder of Santen Pharmaceutical, Jim Frie of Rx-360, Dr. Jennifer Trevor of Astellas and Dr. Andrew Warmington of Citeline | Published September 2023.


We are committed to supporting clients at every stage of the manufacturing cycle, delivering best-in-class services efficiently and effectively.

Find out more about our Global Integrated CDMO Services.


Our dedicated team of specialists will be happy to discuss any of your CDMO questions. Contact us on +1 779-208-1819 (US) or +44 1495 711 222 (UK/EU) or email talkfuture@pci.com