Pharma’s Supply Chain Crisis and the Myth of Globalization

PharmTech: We often hear that globalization of the pharmaceutical industry has added new challenges to the management of the end-to-end supply chain. What are the key trends shaping the pharmaceutical supply chain? How can an organization effectively manage its supply chain to meet increasingly demanding customer requirements? What are the best practices?

Hedley Rees: I should start by slaying the myth that globalization has been responsible for the challenges and difficulties experienced in the pharmaceutical supply chain. New markets opening up across the developing world did not have to result in the globe spanning, multi-party, multi-handover supply chains of today. The industry’s tactical approach towards outsourcing and offshoring did the damage; and 30 years after it all started, the pharma supply chain is in crisis.

This is both good and bad news for the industry. Bad, in that pharmaceutical manufacturers have a mountain to climb if they are to regain proper control of their supply chains. On a more positive note though, the situation has forced many senior executives in the industry to realize that “globalization” is not responsible for this problem. With the right strategic approach, this crisis can be fixed. The quality by design (QbD) paradigm puts emphasis on designing and developing products with the end user, manufacturing process, and supply chain in mind. This approach must be taken by any company if it is to operate a sustainable business model. Janet Woodcock, head of CDER at FDA, has been advocating this approach for nearly 15 years, along with experts from the International Conference on Harmonization (ICH), and many other industry bodies and commentators. Sadly, the industry misunderstood the intention.

If some of the initial enthusiasm for QbD has been lost in the sands of time, its spirit must be resurrected in its original form. Instead of calling the approach QbD, let’s call it design for manufacture. Rather than having discovery and research teams throw new compounds over the wall for development to make the best of, why not make a committed effort to pressure test prospective compounds? This means being willing to jettison those that do not pass muster, and won’t result in manufacturable molecules. It also means working more closely with suppliers of APIs and excipients in the development process, so that their deep knowledge of processes and material performance can be leveraged to a point where it can make a difference.

In short, pharmaceutical supply chains have suffered from decades of neglect that can only be reversed if the pharmaceutical industry develops new paradigms for product development based on practices well proven in other industries such as the electronics sector. Semiconductor manufacturing is an example of design for manufacturing that drugmakers could emulate.