The Dual Sourcing Approach

How robust is your strategy? Are you prepared for supply chain interruption? In today’s turbulent world, risk mitigation strategies are a must – and having a secondary supplier in place for the manufacturing and packaging of life-saving critical medicines is no longer a ‘nice to have’.  It should be an essential part of your strategy in terms of patient health.

Shawn Cain (Senior VP Development & Manufacturing)
Rebecca Coutts (General Manager Tredegar)
Rob Jones (Executive Business Development Director)
Kate Smith (Director of Quality) at PCI Pharma Services.

Whether they know it or not, patients are heavily reliant on complex supply chains for sometimes life-saving medications – and that’s why good supply chain management has always been important for the industry, particularly in the case of critical medicines. However, the COVID-19 pandemic, natural disasters, the war in Ukraine, disruption in labor through staff shortages, and other events in recent years have emphasized how vulnerable the industry’s supply chains truly are and underlined the crucial importance of robust risk mitigation strategies. In addition, the threat of disruption in the supply of equipment, components, and materials – including raw materials – is also a significant risk.

PCI Pharma Services is a leading global Contract Development and Manufacturing Organization (CDMO) providing integrated development, manufacturing and packaging solutions on behalf of clients. Since the start of the pandemic, hardly a conversation or review meeting with our clients has gone by without some aspect of the supply chain being discussed. In fact, conversations are now delving deeper into supply chains than ever before, with clients asking what else they can do to mitigate risk and ensure continuity of supply of life-changing therapies to their patients. The FDA has also accelerated such discussions by releasing draft guidance “Risk Management Plans to Mitigate the Potential for Drug Shortages, May 2022” for the industry on the need to have robust risk management plans to mitigate the potential for drug shortages. In short, risk mitigation is now at the top of the industry’s priorities.

Reading the ripples

At PCI, we always work in partnership with our customers to minimize the impact of any supply chain disruptions, ensuring vital supplies are available to patients when needed, whether that be for clinical or commercial supply. Part of our risk mitigation approach is to continually analyze supply chain ripples to predict potential waves – or even tsunamis – of disruption. Though it’s true that black swan events present challenges in terms of prediction and preparation, a good risk mitigation strategy should take into account worst-case scenarios. In other situations, such as Brexit, where there is time to prepare; we developed a robust “Brexit plan” to ensure our UK and EU operations, supply chains and ultimately supply of therapies for patients were not affected, but not all companies are so proactive.

However, it doesn’t always take a significant world event to create supply chain disruption. New guidelines and updated regulatory documents are a fact of life in the pharma industry – and suppliers who fail to keep on top of changing legislative and regulatory requirements can create ripples in supply chains that affect many others. In Europe, an update to Annex 1 on sterile manufacturing was just released. Companies now need to adjust to the new requirements to ensure there will not be disruption in the supply chain as a result
Good risk mitigation should proactively seek to understand the drug product and its entire supply chain, identify and prioritize the potential risks, and develop preventive or corrective action plans to minimize supply disruption – especially when it comes to life-sustaining and life-supporting products.

Two suppliers are better than one

Before the pandemic, supply chain simplification was considered a key trend, with some companies preferring single-source supply partners. That said, some astute companies were already establishing two sources of drug substance and drug product supply because of the value in potential risk mitigation; after all, a second source of supply can add greater flexibility and capacity should there be a sudden change in demand – or an unforeseen challenge that affects the primary supplier. These companies found themselves in a better position to navigate the supply chain disruption created by the biggest and most unprecedented black swan event in recent memory, and were able to switch on their second source supply and maintain supply to patients.

As companies take on board lessons from the pandemic, dual sourcing is fast gaining traction as a key strategy for critical medicines. Importantly, some companies are seeking additional geographic coverage using suppliers across different regions to meet local drug product market needs, a strategy which both reduces disruption but also their carbon footprint, which in turn has a positive impact on ESG initiatives, a win-win.

Companies often have several questions when it comes to adopting a dual sourcing strategy. For example, when clients consider PCI as a potential secondary supplier, they often want to know how flexible we can be in terms of absorbing manufacturing and packaging on demand, where we source our materials and components from, and what our relationship is with our vendors – they are looking for the confidence that we can deliver their strategy. As a large global organization, we have significant buying power and influence over our downstream supply chain, which, for smaller biopharma companies, is almost as important as our exemplary delivery, regulatory and safety record!

Through our already established processes and procedures, we also actively make the switch to a dual sourcing approach as smooth as possible; for example, we have the appropriate licensing and accreditations to be a dual sourcing supplier for large and small molecules across all pack formats for a global market. Indeed, our approach to business continuity planning has seen us establish multiple operations across North America, Canada, the UK, Europe, and Asia Pacific, so when you choose to work with PCI, you are not just working with one site – you benefit from over 50 years of expertise, end-to-end capabilities, and scalable capacities available across our global network of 30 facilities.

Clearly, no company is immune to supply chain pain, PCI included, but proactive planning and effective risk management ensure we are prepared. Our approach allows us to have everything necessary to sustain our business and, crucially, to ensure our clients can deliver medicines to patients. As just one example of how we proactively mitigate risk, we have increased stockholding of key materials across all our sites, but most notably in the UK (to counter Brexit-related challenges) and also at our San Diego and Australian facilities for the launch of our automated aseptic fill-finish platforms. We also continue to expand our warehousing capacities to feed our manufacturing and packaging sites so that we can store materials for longer, giving client’s surety of supply.

Through acquisition and growth we have invested in our ability to provide an end-to-end solution to support clients from early development and manufacturing phases through to commercial packaging and labeling for oral dosage forms, creams, gels, ointments, and injectables. When a company selects us to be their dual source supplier, they have the confidence that their needs throughout the product lifecycle can be delivered by PCI – whether that be from a single site or via our global network.

At PCI, we are constantly scrutinizing our own operations to make sure we provide our clients with the most efficient service. We apply the principles of continuous improvement to everything that we do and share best practice across our global network – which given we launch over 90 new products a year on behalf of our clients, means a huge amount of expertise to learn from and share with our customers. This approach has meant that across the board, we are not only increasing safety stock levels – in some cases to 12 months of stock or more, but also adding new service lines and technology driven solutions such as late stage customization to deliver value to our client partners and streamline their supply chains – all in the name of risk management.

As new guidelines and advice from regulators emerge, we review them in detail to ensure that we understand every aspect and potential impact so that we can fully support our clients – wherever in the world that they need to distribute their products.

An obligation to ensure supply

Another key advantage of working with PCI is our focus on supply chain planning – one aspect of which is working closely with both our suppliers and customers to understand their forecasts and demand in advance, as well as the challenges they might be facing. We use this information to support them and make data driven decisions to ensure we can deliver on critical supplies. In many instances, we have been able to procure key materials and components when others could not. How? The best planning, the best execution, and a high level of technical acumen. On this latter point, let’s consider one of the greatest challenges in the supply chain right now; all the work in the vaccine space has placed tremendous strain on the manufacture of sterile filters, resulting in lead times of 50 weeks or longer in some geographies. Our engineering team found the same membrane in different filter housings – and then designed the interfacing gamma irradiated tubing sets to allow us to use the new filter within the customer’s process (after validation, of course). In short, we kept the supply moving. Of course, it is impossible to protect everything and to purchase all the component volumes you may possibly need for every single issue, and so sometimes, you have to be creative, and we are proud to say that time and time again, as in this example, our team has turned a problem on its head and found a solution!

You could view all this risk mitigation as being the obligation to our clients – but we also have an ethical and moral obligation to do our best to provide therapies to patients as the supply chain partner. We never want to see a clinical trial halted or a commercial stock out that affects patients. Some events, such as the pandemic, are out of our control, but we do have a responsibility to effectively manage our supply chains and ensure business continuity as much as we can to ensure that our clients can continue to serve patients.

The Dual Sourcing Approach. – seen in The Medicine Maker October 2022

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