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The global biopharmaceutical industry faces unique supply chain complexity challenges that extend beyond those of other industries. The stakes are higher, the networks are more complex, and the products are highly regulated. With innovation in highly-specialized make-to-order-style therapies like chimeric antigen receptor T cells and cell and gene therapy further compounding these challenges, achieving supply chain excellence has never been more critical to gaining a competitive advantage in the industry.

We have identified the five main factors driving biopharmaceutical supply chain complexity that, if biopharma companies were to address, would differentiate them from their competitors by increasing their ability to deliver potentially life-saving drugs and treatments to patients and business value in the form of improved service levels, reduced obsolescence, and reduced compliance risks.

The five factors driving biopharma supply chain complexity

  • Differing regulations across regions and countries: One of the major constraints driving biopharma supply chain complexity is differing regulations across countries and regions. Each country and region (e.g., the EU and US) has its own regulatory and quality guidelines defined by its respective agency. Each product must be filed individually in separate regions and countries to obtain the requisite regulatory approvals. For example, a drug product approved in the EU that has already been given to millions of patients might not get approval in the US due to FDA regulations. Each filing will contain specific parameters and conditions to receive approvals at each stage of the product supply chain, including drug substance, drug product, and final product labeling for each country, both for internal manufacturing and contract manufacturing (CMO).
  • Clinical supply chain challenges: Though there are many links between the clinical and commercial supply chain in the biopharma industry, there are distinct models and requirements specific to the clinical supply chain, such as establishing clinical trial sites and gaining regulatory approval for these sites and the manufacturing process, the industry’s capital-intensive nature and need for long-range planning for improved decision-making on strategic initiatives, and long manufacturing lead times for the end-to-end product (e.g., drug substance), which often take up to six to nine months with several weeks of QA release time. Similarly, certain drug products can take up to three months and are highly process dependent, and a high degree of variability in the yields impacts planning.The clinical and commercial supply chain often share common resources and materials, hence addressing some of the challenges such as integrating the clinical and commercial S&OP processes, driving integrated decisions across the supply chain, commercial raw material planning, allocation, and planning of resources and capacity, scheduling of drug substance, enhancing the collaboration and visibility with partners (e.g., CMO, 3PL), tracking the cold chain and improving the visibility will benefit the supply chain and create better synergies.
  • The industry’s increasing reliance on CDMOs and 3PLs, driving the need for end-to-end visibility: Many parent manufacturing companies are focusing on drug discovery (IP) and early development of the molecules and manufacturing of the primary material, e.g., master cell bank and drug substance. CDMOs (contract development and manufacturing organizations) are increasingly becoming critical players in clinical product development and commercial manufacturing activities, and 3PL distribution across the channels. Due to biopharma companies’ complex global network of operations, the need for collaboration, visibility, and risk management is increasingly becoming critical.
  • The impact of geopolitical, environmental, and other global events: China and India have dominated the world’s supply of active pharmaceutical ingredients (API) and raw chemical materials for years. In 2020, when the pandemic began, this had severe challenges to the supply situation since the API is critical for manufacturing the products. Some countries banned exporting critical raw materials and drug products, which continues to impact the supply post-COVID. This has driven supply chain security to the forefront of organizations’ agendas, with several governments mandating alternate strategies that ensure a stable and secure supply.
  • The reliance on a disconnected, legacy IT landscape: Traditional operating models create organizational silos, disconnected planning applications, and manual handoffs between supply chain processes. Reliance on old planning systems leads to an overall lack of collaboration between manufacturers, distributors, and HCPs, limiting full visibility of the end-to-end supply chain, driving material expedition, supply shortages of critical and medicine, and increased safety stock, which in turn impacts patient care and increases working capital costs. In the fragmented and older generation IT landscape, Excel-based tools impact analytics and speed of decision-making. This leads to a lack of strategic planning and IBP capabilities, including scenario simulations to assess the impacts on the plan proactively

How can biopharma companies address these drivers of complexity to create a strategic advantage?
Read the white paper addressing biopharma supply chain complexity to create a strategic advantage to learn how biopharmaceutical companies can leverage next-generation platforms to better manage supply chain complexity.

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Vijay Mohan

Vijay Mohan is an accomplished life sciences leader with over 25 years of leadership and hands-on experience in driving technology-enabled business transformations for global life sciences companies, with a focus on the biopharma and medtech industries. At o9 solutions, Vijay is the global leader for life sciences, where he is responsible for driving strategy, go-to-market execution, industry thought leadership, and delivering the most value to global biopharma and medtech companies.