Growing Complexity
The overall pharmaceutical supply chain is complex due to the nature of the drug development and commercialization process, which can extend for several years. Extensive and ever-changing regulatory requirements for not only manufacturing processes, but also the transportation and import/export of materials from basic starting ingredients to pharmaceutical intermediates, APIs and drug products further complicate the situation given the increasing globalization of the industry.
For fine chemicals in particular, the growing complexity of the compounds being developed as drug candidates has resulted in more complex production routes requiring more steps (that might be performed at different facilities) and greater numbers of raw materials, including specialized compounds. An increasing percentage of drug candidates are highly potent and/or niche products for the treatment of smaller patient populations and require smaller volumes, leading to an increase in the use of multi-product manufacturing facilities.
As a result, manufacturers find themselves dependent on a greater number of suppliers from varying locations around the world. Suppliers can in fact number in the hundreds and vary in size from small, specialized producers to large international chemical companies, each of which may have multiple production sites and their own supplier networks.1
Even small disruptions can have dramatic effects on such complex supply chains, and there are many potential causes of such disruptions.2 Geopolitical instability and natural disasters can interrupt production and/or distribution, thus affecting raw material availability. Variability in the quality of electronic chemicals can affect production yields and final product quality, safety and efficacy. Contamination of materials – accidentally or deliberately – is an additional significant concern.
Rapidly changing market trends can be a further factor. For instance, the decline in demand for raw materials used in larger quantities in other industries can lead to the reduced availability for pharmaceutical applications. Alternatively, sudden increases in demand for non-pharma applications could also lead to reduced availability to drug manufacturers.
The Upstream Supply Chain Security working group of the not-for-profit pharmaceutical and biotech industry consortium Rx-360 conducted a survey in August 2013 to identify issues of concern for the pharmaceutical industry regarding raw material supply chain security.3 The group found that nearly half of the respondents did not use supply-chain mapping (a tool for understanding the origins of pharmaceutical raw materials) for some or all of their materials or audit beyond their suppliers’ suppliers.
Raw Material Variability
One piece of good news – while the complexity of the pharmaceutical raw material supply chain has increased in recent years and a greater percentage of raw material production is now outsourced to companies in emerging markets, overall raw material quality and reliability has increased.4 This news is substantial, because any variation in the quality of raw materials – whether chemical starting materials or glass vials for final product packaging – can have a direct impact on product yields, costs, regulatory submissions, availability and most importantly, patient safety.
One thing that has changed, though, is the sensitivity of analytical methods used for raw material characterization.4 Higher levels of variability are in some cases now detected that were simply not possible to measure in the past. Expectations for quality and consistency have also increased, and raw material suppliers have responded by improving process controls. Excipients are one set of materials that have not received as much attention in the past, but have recently come in the spotlight, with new regulations under development or recently passed to implement quality requirements similar to those for other raw materials.5
In general, the variability of raw materials can be attributed to the presence of trace impurities that are toxic or can react with the desired compound and affect its properties. Biological contaminants also impact raw material quality.4 The presence of trace impurities or biocontaminants typically results from lack of appropriate process controls, inadequate handling/storage facilities, or insufficient analysis prior to product release. Suppliers, including repackagers, must implement effective process controls, audit their own raw materials vendors and be able to provide comprehensive documentation on their supply chains.4
The overall pharmaceutical supply chain is complex due to the nature of the drug development and commercialization process, which can extend for several years. Extensive and ever-changing regulatory requirements for not only manufacturing processes, but also the transportation and import/export of materials from basic starting ingredients to pharmaceutical intermediates, APIs and drug products further complicate the situation given the increasing globalization of the industry.
For fine chemicals in particular, the growing complexity of the compounds being developed as drug candidates has resulted in more complex production routes requiring more steps (that might be performed at different facilities) and greater numbers of raw materials, including specialized compounds. An increasing percentage of drug candidates are highly potent and/or niche products for the treatment of smaller patient populations and require smaller volumes, leading to an increase in the use of multi-product manufacturing facilities.
As a result, manufacturers find themselves dependent on a greater number of suppliers from varying locations around the world. Suppliers can in fact number in the hundreds and vary in size from small, specialized producers to large international chemical companies, each of which may have multiple production sites and their own supplier networks.1
Even small disruptions can have dramatic effects on such complex supply chains, and there are many potential causes of such disruptions.2 Geopolitical instability and natural disasters can interrupt production and/or distribution, thus affecting raw material availability. Variability in the quality of electronic chemicals can affect production yields and final product quality, safety and efficacy. Contamination of materials – accidentally or deliberately – is an additional significant concern.
Rapidly changing market trends can be a further factor. For instance, the decline in demand for raw materials used in larger quantities in other industries can lead to the reduced availability for pharmaceutical applications. Alternatively, sudden increases in demand for non-pharma applications could also lead to reduced availability to drug manufacturers.
The Upstream Supply Chain Security working group of the not-for-profit pharmaceutical and biotech industry consortium Rx-360 conducted a survey in August 2013 to identify issues of concern for the pharmaceutical industry regarding raw material supply chain security.3 The group found that nearly half of the respondents did not use supply-chain mapping (a tool for understanding the origins of pharmaceutical raw materials) for some or all of their materials or audit beyond their suppliers’ suppliers.
Raw Material Variability
One piece of good news – while the complexity of the pharmaceutical raw material supply chain has increased in recent years and a greater percentage of raw material production is now outsourced to companies in emerging markets, overall raw material quality and reliability has increased.4 This news is substantial, because any variation in the quality of raw materials – whether chemical starting materials or glass vials for final product packaging – can have a direct impact on product yields, costs, regulatory submissions, availability and most importantly, patient safety.
One thing that has changed, though, is the sensitivity of analytical methods used for raw material characterization.4 Higher levels of variability are in some cases now detected that were simply not possible to measure in the past. Expectations for quality and consistency have also increased, and raw material suppliers have responded by improving process controls. Excipients are one set of materials that have not received as much attention in the past, but have recently come in the spotlight, with new regulations under development or recently passed to implement quality requirements similar to those for other raw materials.5
In general, the variability of raw materials can be attributed to the presence of trace impurities that are toxic or can react with the desired compound and affect its properties. Biological contaminants also impact raw material quality.4 The presence of trace impurities or biocontaminants typically results from lack of appropriate process controls, inadequate handling/storage facilities, or insufficient analysis prior to product release. Suppliers, including repackagers, must implement effective process controls, audit their own raw materials vendors and be able to provide comprehensive documentation on their supply chains.4