Keeping supply chains resilient in times of crisis

Robust risk management can offset supply chain problems that have been further aggravated by COVID-19, says Samsung Bioepis’ Thomas Newcomer.

Since the start of the COVID-19 pandemic, the pharmaceutical industry has experienced many unprecedented situations. Disruptions to drug supply chains has become a primary concern across various markets. As much of the industry’s resources has been invested in pandemic response, the pharmaceutical industry has experienced an increase in supply chain or regulatory bottlenecks and in some cases drug shortages. This is especially true of medications used to treat COVID-19 as well as related conditions.

Drug shortages are not a new story in the pharmaceutical environment. The issue has existed for decades, but COVID-19 has led governments, healthcare organizations, and manufacturers to raise supply resiliency as one of many variables to evaluate when choosing a partner.

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As the US market access lead at Samsung Bioepis, I have witnessed a growing attention among payers, pharmacy benefit managers, and hospitals to learn more about the history and capabilities of a manufacturers’ supply resilience.  A current discussion about a manufacturer’s ability to deliver a quality product across the globe is essential based on today’s evolving market.

How companies are responding to COVID-19 in its outset versus now

In the early days of the pandemic, a common response to COVID-19 focused on reactively responding to possible delays and shortages. This could involve responding to unforeseen changes in freight transportation schedules and lengthened freight inspections. The goal was to reduce lead times or delays as much as possible, so that medicines are delivered to patients with minimal disruption.

We are now in the third year of COVID-19, and much of the industry’s focus has shifted to managing supply chain risks in a more systematical way. Keeping the communication channel open with suppliers to understand various factors has been instrumental in proactively understanding the impact to the overall operation.

Supply chain risk management requires building robust contingency plans with flexibility to meet the market demands, and pharmaceutical companies are investing more in digital technologies to detect supply disruptions.

At Samsung Bioepis, we implement additional data-based risk management systems to monitor and track the supply status and anticipate supply shortages in an effective manner. Also, COVID-19 supply chain needs have shed a light on the importance of cold-chain solutions, especially since biologics are temperature sensitive and require careful handling to prevent heat and contamination. We routinely work with cold-chain solution providers to supply our biosimilar products safely to our customers, tracking temperatures as products are shipped across borders, from manufacturing site, to warehouse, to hospitals. Cold-chain shipping will take on an even greater role as more and more biologics, including biosimilars and cell and gene therapies become more available in markets worldwide.

In addition, based on our growing experience with international shipping, we are developing shipping handlers that are easy to handle and highly efficient, which in turn can contribute to reducing shipping costs and carbon emissions.

Staying compliant and communicating with stakeholders

In March 2020, the US Food and Drug Administration announced that it would postpone inspections of both domestic and foreign manufacturing facilities and that inspections deemed “mission-critical” would be evaluated on a case-by-case basis.

These restrictions have definitely impacted the pharmaceutical industry. Drug manufacturers are required to undergo FDA inspections for their manufacturing facilities to verify that manufacturing is compliant with Good Manufacturing Practices (GMP) and related FDA regulations, before the drugs are approved. The industry is trying to communicate more with the FDA in order to increase predictability of inspections and minimize the impact on drug approval timelines.

In past years, the FDA has issued warning letters to manufacturers abroad at an increasing rate, putting quality and compliance in focus. Being compliant with GMP and related FDA regulations relates to quality product management. Maintaining stringent quality control over the entire manufacturing needs to continually be a primary focus for any manufacturer.

In our role at Samsung Bioepis to enable market access for our products, we have a responsibility to notify our customers of our history with FDA inspections and any updates on drug approval timelines that could impact the continuum of patient care. Transparency and communication is a pillar of success throughout the manufacturing and supply process.

A related topic involves the biopharmaceutical industry’s overall involvement in a global supply chain. The majority of the industry has utilized a global supply chain for the manufacturing and distribution of medicines, allowing cost efficiencies through economies of scale. This is why, at Samsung Bioepis, we take a combined approach and regionalize our production and supply chain management.  Thus, we implement near-market strategy in our key markets, which allows us to respond more swiftly to market changes.

There is a growing voice in the US to increase domestic production, and some argue that foreign manufacturing has made the security of the nation’s medicinal supply vulnerable to the effects of geopolitical conflicts, epidemics, and natural disasters.

However, building a manufacturing plant costs billions of dollars. Hence, it would not be economically viable for every country to build facilities for end-to-end production, and certainly not beneficial for the public health, as the increased Cost of Goods of medicinal products would cost healthcare systems and patients more dollars. The key is to be proactively prepared from an inventory perspective in a regionalized area to withstand turbulent changes to various markets, and one of the solutions could be maintaining strategic alliance with key contract manufacturers in key regions to mitigate shortage risks.

Collaboration is the key

As with other industries, pharmaceutical companies will look for ways to make supply chains more resilient and agile to combat market events. No one company or regulator can do it alone, and success requires all the stakeholders in the pharmaceutical value chain to re-examine the status quo of delivering medicines to patients, and to increase collaboration and communication between the industry and regulators.

Thomas Newcomer (t.newcomer@samsung.com) is vice president and head of US Market Access at Samsung Bioepis.