A Deeper Look At Pharma's Structural Supply Chain Vulnerability

By Ivan Di Bonaventura

Recent years have demonstrated that the global supply chain for critical medicines is substantially fragile. Beyond inherent weaknesses, outside factors like tariffs and geopolitical unrest magnify this fragility. Short-term measures can alleviate immediate disruptions, but they cannot address deeper structural vulnerabilities. Consequently, there is an urgent need for adaptable, scalable production solutions that can accommodate fluctuations in demand while ensuring consistent product availability.

CMOs and manufacturing authorization holders (MAH) should ensure that supply and demand are properly aligned. For some companies, this translates to high resource utilization to optimize costs, while other companies prefer to maintain excess capacity so production can be adjusted based on shifts in demand.

Nowadays, CMC drug development strategies are expected to be more agile than ever, and CMOs and CDMOs need to adapt quickly to changes, such as developing and optimizing manufacturing processes in just a few months, often moving to process validation with major gaps remaining. This often leads to unoptimized processes not easily scaled and weighed down by inefficiencies.

One practical example is the manufacturing of GLP-1 peptides, where lyophilization capacity limitations led to major supply disruptions. This was overcome by adopting innovative solutions such as, for example a manufacturing fragmentation approach (tirzepatide) or solution-phase peptide synthesis, which can be transferred more easily to other organizations to diversify and mitigate disruptions.¹

Capacity Crunches

Despite major initiatives, most CMOs and pharma companies lack capacity and capabilities for many reasons. Among them are:

• high volumes requested,
• short timelines to deliver products,
• inadequate scalable manufacturing processes, such as in the case of peptide manufacturing,
• specific and complex analytical methods and complex supply chains, as in the case of new biological entities like ADCs, and
• unreliable starting material suppliers (often outsourced to third parties).

Constrained capacity occurs whenever an organization has insufficient production capacity to meet demand.

Some of the key causes may include:

• Quality issues, such as major deviations and/or inadequate quality control measures, which can trigger an FDA form 483²
• Regulatory hurdles like complex requirements and lengthy approval processes, and specifications or import testing requirements that vary by country
• Inadequate manufacturing and analytical capacity like insufficient or obsolete equipment and infrastructure and deficient skilled/trained labor
• Lack of critical raw/starting materials, which can cause significant production delays. One example is long lead times for specialized chemical building blocks, such as amidites used for DNA/RNA synthesis.
• Lack of planning tools that allow better optimization and efficiency of the equipment available
• Lack of procedures and communication tools that can help prioritize specific tasks over others

To overcome these bottlenecks, it is crucial to first understand their root causes and the impact they can have and, second, to understand the steps needed to minimize their effects.

Strategies To Minimize The Capacity Crunch

To overcome bottlenecks in drug manufacturing, companies must focus on increasing flexibility and agility. Here are some key points to consider:

1. Overcoming fast-tracked CMC development plans and drug manufacturing/analytical bottlenecks requires implementing comprehensive risk mitigation strategies. By conducting risk assessments and prioritizing potential bottlenecks based on their impact, organizations can take proactive steps to minimize supply chain disruptions.

This continuous exercise should include long- and short-range planning, and it should be flexible enough to allow an organization to adapt. Short-range planning focuses on immediate needs and goals, typically within a year, involving daily operations, resource allocation, and specific tasks.

Long-range planning considers geopolitical factors, regulatory plans, possible volume changes due to the indication’s expansion, customer relationships and alliances, and strategies to balance demand and cost improvements, such as scale-up and optimization.

2. Companies need supply chain redundancies. This involves identifying alternative sources, such as another CDMO/CMO or internal manufacturing, if it exists. As supply chains become more complex, the manufacturing strategy must be tailored to each value chain. Usually, drug product and finished goods manufacturing are prioritized because they are closest to patients.

3. Capital expansion is one of the most obvious ways to add capacity, albeit the most expensive. CDMOs are building out large amounts of capacity to capture new bio-business opportunities,³ with perhaps the best examples to date taking place in South Korea.⁴

4. Rooting out waste also helps free up additional capacity. By evaluating and optimizing manufacturing processes, companies can identify areas of inefficiency and take corrective actions. This may involve adopting lean manufacturing principles and implementing automation technologies to reduce waste. Adopting tools such as value stream mapping helps to capture bottlenecks and eliminate constraints by including only optimized steps that add value. Another tool is the DMAIC process, which stands for "define, measure, analyze, improve, and control." It is a Six Sigma process improvement tool that allows continuous feedback loops to refine a process once a bottleneck has been addressed.

5. Introducing new manufacturing technologies and equipment, such as high-yield expression systems and single-use technologies in the case of upstream antibody manufacturing, or spray-drying systems downstream, can streamline operations.⁵ This action applies mainly to commercial/mature products, not clinical ones, where development timelines have no room for changing equipment. Commercial-stage upgrades imply financial and regulatory considerations, which introduce their own challenges.

6. Working with regulatory authorities is also crucial for addressing bottlenecks. By working closely with regulatory agencies, companies can anticipate potential bottlenecks and ensure compliance, thereby minimizing delays.

7. For companies with internal capacity issues, consider establishing strong relationships with external CMOs to reserve capacity for dedicated products. This exercise is usually done by connecting manufacturing and business needs and involves multiple stakeholders.

Mistakes Companies Make Dealing With Constrained Capacity

In the real world, capacity constraints aren’t always apparent until it's too late. We saw this happen during the pandemic when capacity could not support the demand.

Some common mistakes that organizations make when hit by capacity constraints include:

• Throwing resources at what they believe to be the problem
• Not stepping back to understand the real causes of constrained capacity
• Taking a narrow view and not thinking outside the box
• Not innovating, but repeating the same process without thinking in logical terms
• Trying to work harder rather than smarter, focusing on short-term profitability rather than thinking strategically.

A holistic approach to manufacturing strategy factors in all elements of operations strategy, such as make or buy process, the product portfolio exercise, technology outlook, and the value chain of the future — not just manufacturing sites.

Segment the manufacturing network: As supply chains become more complex, the manufacturing strategies must be tailored to each value chain. For example, a company with a diverse portfolio can differentiate its manufacturing strategy so that large capital equipment is manufactured closer to customers, while manufacturing locations for small goods are more flexible because they can be shipped long distances more easily.

Think beyond total landed cost: The best manufacturing designs once were dictated by total landed (supply) cost. But today, to deliver full value, organizations must consider many more factors, such as risk, resilience, and supply chain responsiveness, to determine total delivered value. For example, regionalization has become a key concern since the pandemic has exposed the limitations of global supply chains. Also, sustainability, increasingly at the forefront of strategic supply chain decision making, will have both immediate and long-term cost implications.

Use Analytics And Solutions Scenarios To Support Selection

Every manufacturing strategy should include a long-term, global scope. A dynamic road map that links to long-range planning allows an organization to adapt to changes over a five- to 10-year period.

A company should define triggers for reassessing and refreshing the strategy when major changes occur, such as tax or regulatory changes and products or programs that may require significant moves or a new site. Even without major changes, companies may want to benchmark every three to five years to make sure the strategy is still optimal.

Institute a rigorous stage-gate process. A clearly defined and communicated stage-gate process ensures alignment at the level of detail required to progress to subsequent stages and limits the tendency to redo analysis and revert to a prior stage after a gate has been passed.

A Formula For Long-Term Success

For many companies, manufacturing strategy is a major opportunity for cost improvements as well as better strategic positioning and resiliency. But long-term success depends on foundational elements that include executive sponsorship, a commitment to building capabilities, decision-making authority at senior levels, the inclusion of manufacturing sites, and a dedicated team to manage the process. Companies that put these elements in place and pursue the best practices described above will be well prepared for an unpredictable future.

Conclusion

Ensuring the right capacity and resources can be challenging and time-consuming. Selecting the right external partner to drive CMC activities is not an easy task and serious problems are almost inevitable. Pros and cons should be carefully evaluated before undertaking major commitments.

References:

1. Kilogram-Scale GMP Manufacture of Tirzepatide Using a Hybrid SPPS/LPPS Approach with Continuous Manufacturing, Organic Process Research & Development Vol 25/Issue 7, 2021.
2. Shocking Conditions at Indian pharmaceutical Manufacturer - ECA Academy
3. Swiss CDMO Lonza widens its ADC digs with 2028 expansion
4. CDMO giant Samsung Biologics lays out plan to build 6th plant
5. Encapsulation of Bioactive Peptides by Spray-Drying and Electrospraying, 2023, 12(10), 2005; https://doi.org/10.3390/foods12102005

About The Author:

Ivan Di Bonaventura, Ph.D., is a scientist and outsourcing expert with a decade of experience in pharmaceutical manufacturing, including peptide drugs and antibody-drug conjugates. His experience includes management positions with Seagen, now part of Pfizer, and AC Immune. He received his Ph.D. from the University of Bern.