Today, the pharmaceutical industry is not strictly defined by the goal of a new molecule being created or a drug providing a huge sales stream for the company. Rather, it will have equal representation to all of the methods by which drugs are produced, procured, manufactured, and shipped to patients around the world. Multinational regulatory requirements, fluctuating prices of raw materials, increasing research and development costs, and international clinical trials are all challenges that make today’s pharmaceutical supply chain much more complicated than it was before.
The pharmaceutical supply chain’s complexity is defined by three critical components: API Contract Manufacturing, Comparator Sourcing, and Reliable Comparator Drug Supplies. Although these functions are behind-the-scenes for most pharmaceutical companies, they are often the main influencers that decide whether a study can be conducted swiftly and at minimum expense or have to wait time and money due to unforeseen challenges to the process.
This post will examine how pharmaceutical manufacturers—both innovators, generics, and biopharma companies—may enhance their supply chains through strategic partnerships, operational insight, and smart sourcing. Instead of revisiting well-trod discussions around the industry regarding supply and demand, this article will focus on how the decisions made by manufacturers regarding which products and which suppliers to purchase from affect the long-term viability and stability of the supply chain.
The Evolving Pharmaceutical Value Chain
The standard pharmaceutical model, which utilized vertical integration with all aspects of the business conducted internally, is giving way to more “networked” approaches. Many companies will seek external partners for several areas of their production rather than performing all of the tasks themselves.
Some examples of outsourced areas are:
- Active pharmaceutical ingredient (API) manufacturing
- Analytical and formulation services
- Global sourcing of comparator and reference drugs,
- Packaging, labelling and distribution.
The shift towards outsourcing of these areas is caused by the need for increased flexibility within companies. The time frames it takes to develop drugs are highly variable, and companies need to react quickly to changes in demand or changes to the regulatory environment.
As companies have found success with outsourcing certain functions, API contract manufacturing is now considered to be a key component of today’s pharmaceutical operations. There are also many ways that comparator sourcing and continual availability of comparator drugs can help ensure both regulatory compliance and the ability to continue clinical trials uninterrupted.
API Contract Manufacturing: Beyond Cost Savings
Although cost savings are often emphasized when discussing reasons for outsourcing API production, that is only part of the overall picture; API contract manufacturing represents a considerable opportunity to gain access to specialized expertise, technology, and compliance capabilities not available in-house.
Access To Specialized Capabilities
A large percentage of the APIs manufactured today (particularly those that are classified as high-potency, complex synthetic molecules, or small-volume) require state-of-the-art equipment, facilities, and personnel to produce safely and effectively. Contract manufacturers have invested considerable resources into developing and implementing:
- Containment methods and equipment for high-potency APIs
- Advanced analytical instruments for evaluating the quality of APIs
- Expertise in optimizing and accelerating production processes at the large-scale commercialization level
Pharmaceutical companies that engage an API contract manufacturer will be able to leverage their contract manufacturer’s expertise to reduce R&D timelines and minimize technical risk.
Increased Capacity Flexibility & Reduced Risk Exposure
Market conditions change rapidly and dramatically due to factors that include competitive product launches, regulatory changes, and global health emergencies. If a pharmaceutical company only relies on its own manufacturing capacity, bottlenecks can occur in production schedules, which can negatively impact their sales.
In addition to providing increased capacity, contract manufacturers also offer marketing and production flexibility by allowing firms to produce API at more than one location, thereby reducing the risk associated with being solely dependent on one location for production.
Comparator Sourcing: A Strategic Imperative, Not a Procurement Task
Comparators are the reference drugs used for comparison against investigational drugs in clinical trials. While comparator sourcing is typically considered to be a straightforward function when compared to sourcing standard raw materials, this is not always correct. In fact, when sourcing comparators, it is critical that the comparator drugs be sourced in accordance with strict regulatory requirements pertaining to authenticity, traceability and regulatory acceptability.
Why Comparator Sourcing is Becoming More Difficult
Today, several factors contribute to increasing challenges in the sourcing of comparator products:
- Global Clinical Trials: When conducting a clinical trial that has been approved by multiple countries, the same comparator should be used in each country.
- Brand Reference Product: There are limited brand reference products available in certain parts of the world.
- Limited Shelf Life: Many comparator products have limited shelf life and should be kept at controlled temperatures throughout the duration of the trial.
- Regulatory Requirements: Regulatory authorities expect that a comparator will be consistently sourced during the course of a clinical trial.
If challenges related to the sourcing of comparators are not addressed early in the process, likely, protocol amendments, delays in patient enrolment or even the suspension of the clinical trial will be necessary.
Strategic Planning Can Create a Competitive Advantage
A successful comparator sourcing program starts during the protocol design phase of a clinical trial. Being able to accurately forecast demand, while also understanding the country-specific regulations and identifying alternative sources for products, will give companies that treat comparator sourcing as a strategic function, rather than a last-minute sourcing activity, a significant advantage over other companies during the conduct of clinical trials.
The Role of Strategic Partnerships in Long-Term Success
When you partner with someone to manufacture API or manage comparators, you want to find partners who have:
- A proven record of complying with regulatory requirements.
- Global sourcing and logistics.
- Strong communication and transparency.
- The ability to change with the needs of the project.
Additionally, long-term partnerships create opportunities to build trust and create efficient operations, which allows for additional efficiencies through continued improvements.
Sustainability & Ethical Considerations
The importance of sustainability is rapidly changing how we consume, interpret and apply supply chain management for the pharmaceutical industry. Increasingly, stakeholders want pharmaceutical companies to act responsibly by implementing best environmental practices, ethically sourcing raw materials, and offering evidence of both.
More contract manufacturing organisations are implementing environmentally friendly technologies, developing waste reduction programmes, and developing energy efficiency measures. The sourcing of ethical comparators also ensures that the manufactured product is acquired via legitimate and open channels.
Pharmaceutical companies that adopt sustainable practices will not only comply with the expectations and requirements of regulatory agencies and society, but also enhance their brand and strengthen investor confidence.
Digitalization & Data-Driven Decision Making
The use of digital technologies has changed the way organizations produce APIs and manage and provide comparators to their customers. Advanced analytics have enabled better forecasting of demand, risk assessment, and the evaluation of performance.
Examples of this include:
- Predictive models are used to predict when there will be a shortage of an API.
- Digital tracking provides visibility into the comparative drug supply.
- Integrated Dashboards allow for quicker, more data-driven decisions.
By digitizing the process, there is increased collaboration between sponsors and partners, providing a more agile and responsive supply chain.
Preparing for the Unexpected: Building Resilience
Companies have learned through recent global events how important is to ensure the resilience of their supply chain. Companies should prepare for:
- Geopolitical Uncertainty
- Transportation Interruptions
- Regulatory Shifts
- Public Health Emergencies
To help mitigate these risks, companies should consider having multiple manufacturing locations for the APIs they produce, as well as establishing alternate comparator sources and keeping safety stock as part of their overall strategy for being resilient.
Resilience does not mean eradicating risk; rather, it means effectively managing risk.
The Road Ahead: A Holistic View of Pharma Operations
With the development of medicines becoming more sophisticated and worldwide, the lines separating how medicines are made from how they are produced and how they reach patients will continue to diminish. For this reason, Contract Manufacturing of APIs, Comparator Sourceing and Reliable Comparator Drug Supply should all be viewed as interdependent parts of a unified Strategic Approach.
Implementing a holistic strategy that includes the integration of Planning, Execution, and Partnerships will maximize an organisation’s potential to successfully, efficiently and responsibly deliver healthcare therapies to market.
Conclusion: Turning Complexity Into Competitive Advantage
The pharmaceutical industry faces many challenges due to the increasing number of regulations and complexity in its operations today. But through proactive strategic alliances and business models, the pharmaceutical industry can leverage the current complexities into competitive advantages rather than allowing them to hinder growth.
Strong relationships with entities involved in API contract manufacturing, strategic prioritization of comparator sourcing, and ensuring a reliable source of comparator products can give companies the confidence to navigate the many uncertainties that exist in the pharmaceutical industry today.
Going from a molecule to the shelf is a very long and difficult process; however, companies with an established foundation of resilience and a vision of where they want to go can ultimately achieve sustained success.[/vc_column_text][/vc_column][/vc_row]