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Home / Blogs / Post-pandemic, life sciences supply chains are prioritizing resilience

Home / Post-pandemic, life sciences supply chains are prioritizing resilience

RESILINC BLOGS
Human Health

Post-pandemic, life sciences supply chains are prioritizing resilience

Apr 26, 2022

Resilinc Editorial Team

Life sciences, Reshoring, Supply Chain Resilience

While the U.S. House and Senate negotiate to reconcile their competing bills to boost U.S. manufacturing of drugs, semiconductors and other critical products, supply chain managers in the life sciences industry continue to pivot from the pandemic to proactively analyzing supply chain risks and evaluating options to develop more resilient supply chains. On their agendas are topics such as: high-stakes make-or-buy decisions, vetting more back-up suppliers for key materials, and reshoring and/or regionalizing supply networks for closer proximity to domestic markets.

And most major firms in life sciences—which includes pharma, biomedical, consumer health and medtech segments—are adopting or accelerating digitalization across their enterprises. “Those with limited legacy ways of working, are coming out of the pandemic adopting a digital-first model and challenging norms across their enterprise,” wrote Deloitte in its Global 2022 Life Sciences Outlook. “Those that made significant digital investments prior to the pandemic are benefitting from their bold vision as digital transformation accelerates every part of the life sciences value chain.”

For their upstream supply chains, the life sciences industry is focusing on reducing its dependency on India and China for bulk APIs and generic drugs. “Manufacturers in Europe and the United States are building new in-country API development and manufacturing capabilities,” writes Deloitte. “[They are] regionalizing the supply of critical materials … and using continuous manufacturing.”

Continuous Manufacturing Holds Great Promise

Continuous manufacturing brings API and final dosage manufacturing under one roof. While complex and expensive to create, it streamlines the traditional batch processing model and offers the promise of much greater flexibility in meeting changing demand—as well as much smaller footprints for manufacturing facilities. According to Genetic Engineering and Biotechnology News (GenEngNews), Amgen was the first to pilot continuous manufacturing with a facility opened in Singapore in 2014; now most major manufacturers are in the process of building or commissioning continuous manufacturing facilities.

GSK opened two continuous manufacturing plants and expanded a third in Singapore in 2019, according to FiercePharma. GSK says the continuous process creates significant environmental benefits as well as economic ones. “In some process it reduces water use by 83% and solvent use by 42%, leading to a 52% overall reduction in manufacturing carbon footprint,” according to a recent announcement. (For more on the supply chain resiliency journey of GSK, a Resilinc customer, read our blog post: GSK’s Ashish Gupta shares the company’s supply chain risk management journey.)

It’s important to mention that life sciences OEMs don’t publicly disclose details about their manufacturing IP, which is highly competitive and a feature of a company’s branding and its credibility with investors, regulators, and other stakeholders. Not all firms use the term “continuous manufacturing” nor mean the same thing when they use it.

Amgen, which broke ground on a new manufacturing facility in North Carolina in March, describes its advanced technology as FleXBatch. “This makes drug substance manufacturing more efficient and will help Amgen achieve its company-wide sustainability goals of reducing water use by 40%, cutting waste disposal by 75% and becoming carbon neutral by the year 2027,” according to a company announcement.

Deloitte lauds the evolution of life sciences manufacturing technology, and in its report, it highlights the potential of two university spinoffs that are marketing proprietary continuous manufacturing technology: Purdue University’s Continuity Pharma and Continuus, a joint venture of MIT and Novartis. Continuus recently landed a $69.3 million contract with the U.S. departments of Defense and Health and Human Services to build the first FDA-approved end-to-end ICM manufacturing facility in the United States, according to FiercePharma. The new facility will make three critical meds used to treat patients in intensive care, including those with COVID-19.

Even with in-house continuous manufacturing or similar advanced technology, life sciences firms will continue to rely on third-party suppliers—including those based in other countries—for many materials and APIs. In fact, a recent survey of life science firms’ CFOs by BDO, found that 29% of U.S.-only manufacturers and 16% of global manufacturers plan to move some existing U.S.-based operations offshore.

This underscores the need for life sciences OEMs to continue building up their supply chain risk management (SCRM) capabilities, especially those that provide visibility into where APIs and other vital inputs are made and the real-time location and status of shipments. “It’s especially important that [firms planning to offshore] take the time to upgrade their supply chain technology before moving abroad—otherwise, they could be vulnerable to fraud and will be starting their global operations at a serious disadvantage,” writes BDO.

Deloitte notes that there is significant value for all life sciences OEMs to upgrade their supply chain technology. “Data analytics tools can be leveraged for deeper insights across the supply chain. … AI can predict or forecast supply chain-related events (e.g., logistics challenges, geopolitical issues, and supply disruptions), either executing actions autonomously or recommending actions stakeholders should take—ultimately, helping life sciences companies build resilience and gain competitive advantage.”

In the life sciences industry, a supply chain delay or disruption can literally mean lives are put at risk. That’s why Resilinc is proud to support GSK, Amgen and other leading life sciences companies with AI-powered SCRM capabilities that improve their supply chain resiliency.

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