Supply chain & logistics
Estimates suggest between 72% and 80% of APIs in the US are sourced from overseas.
The final frontier?
Speak to the experts about the struggles of modern pharma and you will eventually hear them utter a single word: transparency. It may not sound like much in itself. But as Foster explains, it could yet save the industry. “Increasing transparency of supply chains,” she says, “is a critical part of strengthening resiliency and protecting against supply shocks.” Intuitively, this argument makes sense. By keeping a close eye on where APIs are coming from, after all, manufacturers can change providers before an emergency arrives. Nor is this a merely theoretical desire. Since 2019, for instance, Novartis has instituted a so-called Third- Party Risk Management (TPRM) framework, which among other things supports business continuity. That’s shadowed by similar developments at Sanofi, which now promotes supplier transparency to secure purchase orders earlier than ever.
“There has been good momentum towards developing supply chain resilience over the past few years, which we hope will continue – the pandemic [has] forced acceleration of this.”
Tacy Foster
As so often in the pharma space, meanwhile, new technology can help here too. In particular, Fritz stresses the potential of digital twins, which essentially allow managers to understand exactly what is happening on the factory floor without leaving their computer. It goes without saying that getting immediate confirmation of a manufacturing stoppage somewhere along the supply chain can be a boon to keeping APIs flowing smoothly. Other technical changes, Fritz continues, are arguably even more revolutionary. “Companies are also looking at continuous processing capabilities,” she says, adding that this approach “eliminates some
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of the issues” inherent in existing batch production models. Rather than manufacturing drugs in specific machines – and risking delays if a shipment is late – this setup instead uses modular devices to complete everything from development to clinical trials. Beyond relying on this technology, however, there is also the sense that deeper shifts are needed too. Put it like this: it is all well and good encouraging continuous processing in theory. But what if the necessary APIs are stuck in a warehouse on the far side of the world? It should come as no surprise, in other words, that pharma giants are looking to do more within the borders of a single country. In June, to give one example, Pfizer announced it was investing $120m to produce oral treatments for Covid-19 in the US. Other stakeholders, for their part, are trying to wean themselves off an overreliance on China in different ways. Earlier this year, the American Senate passed a bill exhorting the US and EU to work together and find “joint strategies to diversify reliance on supply chains” away from China – especially when it comes to pharmaceuticals.
Diversity is our strength
Given all this, it probably makes sense that Foster is fundamentally optimistic about the future of pharma supply chains. “There has been a good momentum towards developing supply chain resilience over the past few years, which we hope will continue – the pandemic and all recent shocks have forced acceleration of this,” she says. Quite apart from the national security arguments here, moreover, Foster suspects that companies will be pressured into changing their ways, arguing that managing risk will “continue to be a top priority for the C-suite and boards”. Given how much corporate balance sheets rise or fall on these questions, she surely has a point, with Pfizer’s successful handling of pandemic supply chains gifting it revenue of $81.3bn in 2021 alone. Fritz, for her part, is similarly buoyant in her expectations about the near future. Especially for larger manufacturers, she seems certain that managers are now thinking carefully about their business continuity plans. Not that firms can necessarily sit back and believe the worst is behind them. With the pandemic sparking a temporary loosening of regulatory regimes, for instance, Fritz suggests that thoughtful manufacturers should now be sharpening their “inspection readiness” tools in preparation for the next round of checks. That is echoed in other areas, notably the need to fill important positions left empty by the chaos of recent years. Considering an estimated 2.1 million American manufacturing jobs could go unfilled by the end of this decade, that is hardly straightforward. Then again, given everything else the industry has been through of late, perhaps it will be a relief. ●
World Pharmaceutical Frontiers /
www.worldpharmaceuticals.net
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