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Pharmaceuticals

What Customers Need

QUALIFIERS

by A. Maureen Rouhi
January 19, 2004 | APPEARED IN VOLUME 82, ISSUE 3

Among major pharmaceutical companies, AstraZeneca is one that has a short list of preferred suppliers. "You can count them on the fingers of one hand," says Gunnar Lager, director of outsourcing and procurement for bulk drugs.

Being on this list means that a company has met AstraZeneca's minimum requirements: good quality systems; regulatory compliance; adherence to safety, health, and environment standards; and financial soundness, Lager says. These factors are all linked to security of supply. Failures in the first three can stop production. The fourth is equally important, because "we don't want to spend a couple of years to establish supply from a company and then find out that they are going out business," he explains.

Other factors are price, flexibility, and open communications. "The time required to establish a supply is very important. Only companies with enough flexibility can deliver very short lead times. Having very short lead times is the only way to handle uncertainties in the market. Communication is also very important, especially when outsourcing for development projects, because when you start these kinds of projects, you don't know exactly where you will end."

Preferred suppliers will be asked first whenever AstraZeneca needs to outsource a compound. Lager says they are not expected to always say yes when AstraZeneca sends a purchase request. "I expect them to say no when they can't--and to do so immediately so we don't waste time."

Another expectation is for suppliers to be "always on their toes," Lager says. "Suppliers should understand that they are not on the preferred list for life. We will always challenge the collaboration and expect continuous improvement. Otherwise, we will fall asleep, and when we wake up we will find that the collaboration is not a winning partnership anymore."

As for outsourcing needs in 2004, Lager forecasts that AstraZeneca will outsource about the same as it did in 2003. Outsourcing will be mainly for drugs in clinical studies rather than preclinical candidates. Lager also expects AstraZeneca to obtain more supplies from Asian companies in 2004 than it did in 2003 and to seek expertise in niche technologies, particularly chiral chemistry and high-potency actives. Security of supply, communication, and price will be decisive in AstraZeneca's choice of suppliers, he adds.

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