From The Editor | May 12, 2020

The Real Threat To Biopharma Supply Chains: Bioprocessing Materials

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By Matthew Pillar, Editor, BioProcess Online

Cleanroom Clean White Facility

The risk to biopharmaceutical developers is not a shortage of pharmaceutical ingredients. It’s the constricting supply of consumable materials and equipment necessary to produce therapies from them.

From the outset of the COVID-19 pandemic, pharma supply chain analysts and pundits have ramped up and amplified their warnings of the dire consequences of tightening access to “medical materials” due to overwhelming demand and trade restrictions. The bulk of the press and analysis on the topic has focused on APIs (active pharmaceutical ingredients) for small molecule drugs and generic final form products, much of which is sourced from China and India and distributed around the globe.

There’s been far less buzz around the pandemic’s supply chain implications for producers of biologic therapies, and on the surface, that’s understandable. In the grand scheme of things, biologic APIs are largely proprietary and less dependent on global sources. But there is a real, present, and growing threat to biopharmaceutical developers and manufacturers, and that threat is manifesting in the bioprocess materials procurement office.

It’s becoming more difficult to secure the consumables required to create biologics; materials like filter media and cell cultures, single-use plastics, bags, vessels, and other components, and even glass vials and syringes.

Mike Piccarreta is a Partner in the Health practice at the management consulting firm Kearney. He’s fielding a high volume of questions from clients concerned about already tight production capacities becoming further strained by a lack of access to processing materials. “Lead times for certain biologics processing materials were already long, and we’re seeing them become further protracted,” he says. “This, coupled with the price increases and quality issues we saw coming into 2020, is compounding supply chain reliability issues for biopharmaceutical manufacturers and CDMOs.”

The implications are long-term. The bioprocessing materials supply chain constraint will be exacerbated as the COVID-19 vaccine and therapeutic products in development and clinical stages today come online for commercial production. With more than 300 different COVID-19 vaccines, antivirals, and other therapies currently in development to protect and treat the population and more being explored each day, the demand for bioprocessing materials and consumables will far outweigh supply. While it’s true that most of those therapies will fail, this short-term frenzy of development activity will have a lasting impact on bioprocessing materials supply. The developers in the running now can’t hold off on capacity planning until their therapeutic candidates’ success or failure is determined, so demand will continue its rapid climb regardless. But suppliers of those bioprocessing materials, says Piccarreta, have not made the capacity investments necessary to meet the needs of biologics developers and manufacturers.

Will The Feds Step Into The Biopharma Supply Chain?

In reaction to the early wake of the pandemic, Senator Tom Cotton (R-AR) introduced the Protecting Our Pharmaceutical Supply Chain from China Act of 2020 in mid-March. The bill proposes to, among other things, ban the use of Federal funds for the purchase of drugs manufactured in China and offer temporary financial protections to pharmaceutical and medical device manufacturing properties. The CARES Act has already allocated funding to both The National Academies of Sciences, Engineering, and Medicine and the FDA to monitor and report on medical product supply chain security. That’s in addition to NIST funding aimed at helping small and midsize manufacturers respond to the virus, and National Network for Manufacturing Innovation funding to support development and manufacturing of medical countermeasures and biomedical supplies and equipment.

Mike Piccarreta, Partner, Health Practice, Kearney
Mike Piccarreta, Partner, Health Practice, Kearney
Piccarreta anticipates more government intervention in the life sciences industry. That action might further constrict international supply chains in the short-term as it works to stimulate localized sourcing in the long-term. “We expect a government push to create resilience and localization in these supply chains, and our clients—drug developers and CDMOs—are on the forefront of that discussion,” says Piccarreta. “It’s a complex issue with significant financial implications, and therapy developers and manufacturers want and need a voice in the debate.” Chief among the complexities are the significant supply investments that have been made in China and India, investments that can’t be quickly unwound. “It will take time to move toward localization, because we don’t currently have the necessary local production capacity,” says Piccarreta. “Developers and manufacturers will need to focus on what’s extremely critical, and they’ll have to develop strategic approaches to buffer the supply. Creativity and agility are in order on both the biologic development and supplier sides of the equation.”

Supply Chain Revolution, Maintaining The Drug Development Tempo

While he’s betting on increased government oversight, Piccarreta says he’s already observing change from within the industry based on the early lessons we’ve learned. Perhaps the most notable change is a move toward supply chain transparency. “When the virus hit in China, the problematic result of our lack of supply chain visibility was exposed,” says Piccarreta. “Our clients were on the phone calling suppliers and suppliers’ logistics partners, but it was very difficult for them to get a sense of what was going on.” The life sciences industry has been slower to adopt AI-based supply chain technologies, such as demand sensing and inventory rebalancing, than consumer-facing industries like retail. The pandemic has accelerated the adoption of those technologies on the front lines, spawning applications to help drug and medical device providers rebalance their inventories and distribution algorithms based on the virus’ spikes and geographic outbreaks. Piccarreta anticipates the application of these demand balancing technologies spilling into the biopharma processing materials supply chain. “More supply chain transparency and automation will help create visibility into where processing materials inventory needs to be among both suppliers and therapy developers and manufacturers,” he says. “Prior to the pandemic, we were seeing some client investment in this area, but not at the level it needed to be to support a global health crisis.” The transition to localized sourcing, he says, is dependent on Industry 4.0 concepts, to which AI-based technologies are foundational. Increased scrutiny on suppliers and supplier relationships will gain importance in drug developers’ gap analysis exercises. “The current processing materials supply chain strain has illuminated the fact that it’s not just about how large suppliers are. It’s about a constructive examination of supplier performance to determine which are strategic, and instituting collaborative action to improve planning integration transparency and supply resilience.”

Piccarreta further anticipates that the new, rapid tempo of drug development will become the norm. Pushed by the pandemic, drug/vaccine development timelines have picked up pace, and pipelines are moving at record speed. Enabling that pace, he says, is the new speed of internal mechanisms. “This is a cultural phenomenon, reflecting the way drug developers think about, interpret, and execute on regulatory requirements and make decisions to get critical product out,” he says. “It’s a difficult pace to maintain, but drug developers are eager to capture it, bottle it, protect it, and make it standard practice. That requires rethinking the way they govern to move faster.”

Another challenge that’s become acute for drug developers is the difficulty associated with preparing pandemic therapeutics from a research and development standpoint. These things are hard to predict, making proactive R&D efforts a gamble with questionable return. As a result, Piccarreta foresees more public/private partnerships proactively allocating public funds toward pandemic preparedness to mitigate the financial risk to developers. “It takes significant frontloaded investment to move quickly, particularly on vaccine products that require high capacity manufacturing. There needs to be incentive to take that risk on. But from a competitive perspective, the credibility and prestige associated with commercializing effective therapies and vaccines is huge.”

For deeper insight into Piccarreta’s recommendations on mitigating risk in your bioprocessing materials sourcing strategy, check out the article he recently published at www.kearney.com.