The importance of Building a sustainable API supply chain

27th November 2013

Amin Farah

Amin Farah, Chief Executive of Industry Online discusses the importance of building a sustainable API supply chain and the impact that this can have on a business.

From a business perspective, a supplier’s performance during product development is often used as a predictor of long-term success. An active pharmaceutical ingredient (API) sourcing strategy is therefore built up upon a well defined manufacturing process, essentially engaging the development at all stages of the API’s development.

For many pharmaceutical companies, their API supply comes from an internal manufacturing site, operating on the registered sequence of the API and utilises contracted suppliers of advanced intermediaries.

It is essential to assess the sequence of tactics that a pharmaceutical company uses for process development, whereby discrete stages of investigation during process development normally matches the company’s appetite for investment risk.

Technology Identification

The essential criteria of speed and scale of operations during the early stages of clinical development could often hamper a firms ability to focus resources on commercial supplier development, therefore these early stages are useful in determining reaction types through routine screening and evaluation of supplier material qualities.

Screening for Commercial Sources

As development continually progresses, pharmaceutical companies need to carefully consider their regulatory strategy. Therefore, API starting materials should be determined well before clinical development, ensuring that the sponsoring firm can include the suppliers in the supply of API for pivotal clinical studies, as well as the manufacture of the primary stability batches.

Another aspect of the emerging supply chain is the identification of differing technologies within the manufacturing process of the API starting materials. The earlier a firm incorporates divergent manufacturing into developing methods of synthesis, the earlier is can consider the differentiating impacts which need to be addresses prior to later clinical stages.

Developing Commercial Sources

Although criteria can be incorporated into the supply chain development during the later stages of API development, early determination of the suitability of a CMO for the firm’s material supply is highly important, primarily concerning the financial diligence of suppliers for the pharmaceutical client.

Supply chain sustainability requires regular discussions between the pharmaceutical company and the CMO, establishing intercompany management teams where even modest levels of commercial involvement are concerned. In particular, during clinical development, the companies should for a project team, who can determine the goals and objectives, whilst measuring the outcomes for their process.

Supplier Continuation

To reduce risk during development, it is an obligation to utilize a documented practice for supplier selection, including technical diligence and quality audits. A good approach would be to periodically review several areas of the relationship to ensure the mutual value proposition in maintained:

Financial Stability: reports should be reviewed periodically, whilst the review of shareholder reports is essential
Organisational Stability: new personnel or departures for each company, organisational changes and strategic intent should be examined
Quality and Compliance : periodic audits of areas of suppliers operations, whilst action plans to address significant gaps should be undertaken
Capability Assessment : the suppliers capabilities and evolving requirements should be reviewed to ensure they are in line with the Pharmaceutical company
Annual Product Review : a detailed review of the CMO’s process performance should be carried out annually
To ensure a reliable supply chain, a well designed initial process; selection and materials should be in place, with on going stewardship of the client/ supplier relationship. Combined together, these steps will provide a well-established business arrangement where by each company can expect many years of successful business dealings.


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