Pharmaceutical Outsourcing Q2 2024 - 33

SUPPLY CHAIN
SECTION TITLE
produce, fewer manufacturers invest in them, leading to a limited
supply. This lack of competition and a reduced number of suppliers
increase the risk of shortages if there's a disruption in the supply chain.
The pressure on healthcare providers to cut costs can further
exacerbate the problem. In pursuit of lower drug prices, buyers may be
less concerned about the stability of the supply chain, inadvertently
encouraging drug manufacturers to source APIs or drug substances
from less reliable or overstretched suppliers. This can increase the
overall vulnerability of the drug supply chain, further contributing to
the risk of shortages.
With drug shortages resulting in delays in treatment, increased
healthcare costs, and, in some cases, life-threatening situations for
patients, there has been an increasing focus on preventing shortages
by health ministries, legislators, and the public.
Trends in drug supply issues are also exacerbating challenges faced by
the pharmaceutical and biotech industries that stem from the demand
for accelerated timelines. The COVID-19 pandemic created an urgent
need for accelerated production of biologics and pharmaceuticals
that drove major changes in development timelines, regulatory
pathways, outsourcing trends, and manufacturing approaches
across the industry. Although the pandemic has ended, the demand
for accelerated production of biologics and pharmaceuticals has
not, with health care professionals and patients now anticipating
medicines to reach them faster.
Although developers optimize timelines aiming for the smooth
progression of each step from preclinical phases to commercialization,
the approval pathway is not linear. A single setback stemming from
regulatory hurdles, clinical setbacks, funding issues, or manufacturing
problems can have a much larger impact on a schedule with limited
tolerance for delays.
As pharmaceutical supply chains become increasingly complex, drug
developers are increasingly turning to expert contract development
and manufacturing organizations (CDMOs) to manage the challenges
and ensure a reliable supply of high-quality drugs.
SCM Trends Impacting CDMO Selection
Operating in a global market means pharma and biotech companies
must be prepared to cater to diverse needs while managing global supply
chains and responding to varied regulatory environments and previously
mentioned trends. However, in a recent industry survey by the
International Data Corporation (IDC) and TraceLink Inc., 70% of supply
chain leaders stated that they believe their supply chain is vulnerable,
with 65% noting that they could no longer accurately plan their supply.6
When selecting a CDMO partner, biotechs and pharma companies
will carefully consider how the company will effectively support their
supply chain needs to navigate the above trends. They will be seeking
a partner that can deliver:
* Supply chain efficiency
With pressure for accelerated timelines to deliver their product to
market, biotechs and pharma companies will need to rely on a CDMO
that can help streamline their supply chains, ensure visibility, anticipate
challenges and reduce lead times. The CDMO must be able to pinpoint
vulnerabilities in the supply chain network, such as an over-reliance on
suppliers from a single territory.
By partnering with a CDMO with a proven track record of improving
supply chain efficiency, biotech and pharmaceutical companies can
gain a competitive advantage and deliver their products to market
faster and more cost-effectively.
* Flexibility and scalability
In the rapidly changing bio and pharma landscapes, flexibility is
key to navigating change in the market and supply. However, when
surveyed, nearly half of pharmaceutical supply chain leaders admit
they lack the necessary agility to survive major business disruptions.3
This highlights the need for CDMOs to be more flexible than ever
before. They must be able to quickly adapt to changes in demand,
regulatory requirements, and supply chain disruptions. This includes
having the flexibility to navigate not only risks but also opportunities,
such as meeting the escalating demand for a product through scaling
due to its immense success.
With a flexible supply chain and the right systems in place, CDMOs
can provide oversight of planned timelines and mitigate risks to
ensure the uninterrupted supply of medicines to patients.
* Communication and visibility
A strong supply chain relies on upstream and downstream visibility.
More than half of companies across the end-to-end pharma supply
chain lacked the upstream and downstream visibility needed to respond
effectively to the sudden marketplace disruptions caused by
COVID-19.7
Without this visibility, resolving issues with upstream suppliers
and downstream customers can be slow when problems arise.
Visibility is also key to ensuring the quality of supply. Less expensive
routes of synthesis can lead to the contamination of products. The financial
and legal costs incurred in these cases can be extremely high.
From start to finish, biotechs and pharma organizations want to
know that they can rely on their CDMO's supply chain. Having
strong relationships with everyone involved in the supply chain and
effectively communicating with them will enable a rapid response to
changes and disruptions.
Working with experienced supply chain partners can go a long way
toward solidifying supply chain security to ensure that medicines can
be manufactured and delivered to patients on time, even in the face
of challenges and unforeseen circumstances.
Strategies to Meet Supply Chain Needs
To meet the supply chain needs of biotech and pharma, CDMOs need
to apply the right strategies to enable them to effectively navigate
emerging trends and potential challenges ahead.
In the past, many CDMOs relied on a " just-in-time " approach, producing
and delivering products only as needed, rather than maintaining large
inventories. Although this approach can improve supply chain efficiency,
it requires careful coordination with supply chain partners to ensure
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Pharmaceutical Outsourcing Q2 2024

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