Forging Better Supply Chains

Regulatory bodies worldwide want to prevent drug shortages, which can pose significant threats to public health. In the U.S., shortages rose from 56 drugs in 2006 to a peak of 251 in 2011, the Food & Drug Administration reports. Product quality and raw material supply problems are the leading causes of shortages, according to a survey conducted last year by the International Society for Pharmaceutical Engineering, an organization for drug industry professionals.

Pressure from regulators to improve the situation has spread from drugmakers to their contract manufacturers and raw material suppliers. But managing complicated supply chains is a huge challenge for companies both large and small. As a result, drug companies and their suppliers are trying harder to engage each other.

The pharma giant Roche, for example, has severafl thousand suppliers from which it bought $16 billion worth of goods and services last year to manufacture drugs and diagnostics. To operate effectively, the company applies risk-management methods to identify suppliers of critical materials for its key products. It has classified about 1,000 such “business critical suppliers.”

Roche then works to build strong relationships with these suppliers. Through information exchange, suppliers better understand how their materials are used, and Roche is assured that material quality and supply are reliable. Sharing expertise also lets the partners address problems when and where they arrive. Roche found that supply chain risks can be operational, geographical, or financial, for example.

Although much smaller than Roche, the gene-based medicines company Oxford BioMedica has identified similar factors as its supply chain grows in complexity. In 2011, the England-based firm acquired a manufacturing plant in Oxford, and, following extensive refurbishment, it received regulatory approval in 2012 allowing it to make clinical supplies of gene-based therapies for itself and third parties.

The company has 54 suppliers and uses 1,035 different components for every batch of viral vector it makes, according to Senior Production Manager Simon Simpkins. Many of the firm’s raw materials are custom manufactured and have long lead times, and for some of those materials specific to its process, “you may not have the luxury of dual suppliers and have to go with a sole supplier,” he says.

If a drug company can’t secure a product from multiple firms, the next best thing is a good supplier with multiple sites. Sigma-Aldrich’s SAFC custom manufacturing business, a supplier to both Roche and Oxford BioMedica, is taking steps to be the latter. When SAFC’s new powder cell-culture media plant opens later this year in Irvine, Scotland, it will not only support customers in Europe and Asia but will also serve as a redundant source of material that the firm makes in Lenexa, Kan.

SAFC is determined to make the powder media from the two sites equivalent by duplicating features of the Lenexa facility in Irvine. The scale and batch sizes of the facilities are alike. The firm has replicated milling and blending equipment and matched processing conditions. The sites share quality-management systems and raw material supply programs.

Cell-culture media—mixtures of salts, sugars, growth agents, and other ingredients sold as either a dry powder or a liquid—support cell growth during biopharmaceutical production.

Media and other life sciences products make up SAFC’s largest and fastest-growing business, which posted low-double-digit sales gains in 2013, according to SAFC President Gilles A. Cottier. The business will remain important for SAFC: Biologic drugs already make up about 20% of the nearly $1 trillion per year pharmaceutical market and are growing twice as fast as small-molecule drugs.

Like Lenexa, the new Irvine plant can produce more than 1,000 metric tons per year of dry media. It also has space that will allow SAFC to respond quickly to increased demand for customer-specific materials. To handle this challenge, SAFC has a 40-scientist R&D team focused largely on custom media development. It will soon open a Singapore tech center that will also support media development.

Along with speed and customization, consistency and quality are important. “Our job is all about managing the supply chain for our customers, so designing a process and facility with a quality mind-set is absolutely essential,” Cottier says. “Variability of supposedly minor raw materials could have a significant impact at the end of the food chain in a monoclonal antibody” that a customer is making.

What SAFC is trying to do between Lenexa and Irvine is no small task. Matching a material specification across multiple suppliers presents the biggest challenge for drug companies. But even when a single supplier transfers production technology to a second site, differences in the premises, equipment, and even staff can affect the outcome.

For such matching to succeed, suppliers and customers need to exchange information on critical material attributes and manufacturing parameters, according to Roche, and develop processes that ensure the integrity of the supply chain. Even when these factors appear to be nailed down, it’s still possible for a previously unidentified trace contaminant to become significant. The challenge only gets amplified when suppliers have suppliers.

Risk mitigation involves managing all the components that go into a product, says Cindy Reiss-Clark, SAFC’s vice president for life sciences product sales. For example, cell-culture media contain about 80 components. Although the final mix must meet pharma standards, some ingredients may be nonpharmaceutical commodities.

“Raw material characterization is critical,” Reiss-Clark says, and can get down to the level of trace elements. “Being able to have a tighter specification helps customers reduce the variability of their processes.” For SAFC, understanding these specifications and its own raw materials can help when a customer needs to troubleshoot a problem quickly.

Beyond the specifics of individual products, drug companies are trying to get suppliers to meet broader expectations. To this end, Roche collaborates with 17 other drug firms through the Pharmaceutical Supply Chain Initiative. One of PSCI’s first actions was to create the Pharmaceutical Industry Principles for Responsible Supply Chain Management, which address ethics, labor, health and safety, environment, and management systems.

Similarly, Oxford BioMedica is designing better approaches, partly funded through the U.K.’s Advanced Manufacturing Supply Chain Initiative. In late 2013, the company and three partners received a combined $13 million to create a center of excellence in Oxford that will develop integrated supply chains for gene-based therapies. Under the initiative, Oxford BioMedica will develop manufacturing methods and expand its facility to add production and a product filling and finishing operation.

Other efforts are afoot as well. To assist the industry, FDA published a strategic plan last year for preventing and mitigating drug shortages. The International Society for Pharmaceutical Engineering started development of its own plan in April.

It’s too early to say whether any of these initiatives will forge supply chains that can prevent downstream shortages. But work already under way has helped reduce the number of shortages reported by FDA to 117 in 2012 and just 38 for the first nine months of 2013.