PCT 502 Lecture Notes packaged by Oladapo Adetunji, RPh, PhD

SOME CHALLENGES IN RAW MATERIAL SUPPLY IN THE PHARMA. INDUSTRY

1. Growing Complexity

The overall pharmaceutical supply chain is complex due to the nature of the drug development and
commercialization process, which can extend for several years. Extensive and ever-changing regulatory
requirements for not only manufacturing processes, but also the transportation and import/export of materials
from basic starting ingredients to pharmaceutical intermediates, APIs and drug products further complicate the
situation given the increasing globalization of the industry. For raw materials in particular, the growing
complexity of the compounds being developed as drug candidates has resulted in more complex production
routes requiring more steps (that might be performed at different facilities) and greater numbers of raw
materials, including specialized compounds. An increasing percentage of drug candidates are highly potent
and/or niche products for the treatment of smaller patient populations and require smaller volumes, leading to
an increase in the use of multi-product manufacturing facilities.

As a result, manufacturers find themselves dependent on a greater number of suppliers from varying
locations around the world. Suppliers can in fact number in the hundreds and vary in size from small,
specialized producers to large international chemical companies, each of which may have multiple production
sites and their own supplier networks.

Even small disruptions can have dramatic effects on such complex supply chains, and there are many
potential causes of such disruptions. Geopolitical instability and natural disasters can interrupt production
and/or distribution, thus affecting raw material availability. Variability in the quality of raw materials can affect
production yields and final product quality, safety and efficacy. Contamination of materials – accidentally or
deliberately – is an additional significant concern.

Rapidly changing market trends can be a further factor. For instance, the decline in demand for raw
materials used in larger quantities in other industries can lead to the reduced availability for pharmaceutical
applications. Alternatively, sudden increases in demand for non-pharma applications could also lead to reduced
availability to drug manufacturers.

The Upstream Supply Chain Security working group of the not-for-profit pharmaceutical and biotech
industry consortium Rx-360 conducted a survey in August 2013 to identify issues of concern for the
pharmaceutical industry regarding raw material supply chain security. The group found that nearly half of the
 PCT 502 Lecture Notes packaged by Oladapo Adetunji, RPh, PhD

respondents did not use supply-chain mapping (a tool for understanding the origins of raw materials) for some
or all of their materials or audit beyond their suppliers’ suppliers.

2. Raw Material Variability

One piece of good news – while the complexity of the pharmaceutical raw material supply chain has
increased in recent years and a greater percentage of raw material production is now outsourced to companies in
emerging markets, overall raw material quality and reliability has increased.4 This news is substantial, because
any variation in the quality of raw materials – whether chemical starting materials or glass vials for final
product packaging – can have a direct impact on product yields, costs, regulatory submissions, availability and
most importantly, patient safety.
One thing that has changed, though, is the sensitivity of analytical methods used for raw material
characterization. Higher levels of variability are in some cases now detected that were simply not possible to
measure in the past. Expectations for quality and consistency have also increased, and raw material suppliers
have responded by improving process controls. Excipients are one set of materials that have not received as
much attention in the past, but have recently come in the spotlight, with new regulations under development or
recently passed to implement quality requirements similar to those for other raw materials.
In general, the variability of raw materials can be attributed to the presence of trace impurities that are
toxic or can react with the desired compound and affect its properties. Biological contaminants also impact raw
material quality. The presence of trace impurities or biocontaminants typically results from lack of appropriate
process controls, inadequate handling/storage facilities, or insufficient analysis prior to product release.
Suppliers, including repackagers, must implement effective process controls, audit their own raw materials
vendors and be able to provide comprehensive documentation on their supply chains.
Specific requirements and expectations should be outlined in quality agreements and based on deep
knowledge that the drug manufacturers have gained about their processes and the raw material properties that
can influence critical quality attributes.4 Manufacturers should also have comprehensive raw material
management strategies in place that include risk assessments, segregated receiving and handling areas, release
testing protocols, supplier audits, communication systems and the quality agreements mentioned above. One
challenge is the lack of any standard requirements for raw material management. Industry groups like the
BioPhorum Operations Group (BPOG) are looking at this issue.

3. Need for Raw Material Supply Chain Transparency

Despite the importance of supply chain transparency for reducing raw material variability, there remains
a real need in the pharmaceutical industry, as revealed by the results of the Rx360 survey. The increasing
 PCT 502 Lecture Notes packaged by Oladapo Adetunji, RPh, PhD

complexity of pharmaceutical raw material supply chains is introducing increasing risk. At the same time, it is
making it increasingly difficult to gain a deep understanding of entire supplier networks. Supply chain mapping
has become essential for pharmaceutical companies to be able to track changes in their supply chains – such as
the movement by suppliers of raw material production to different facilities or the switching by direct suppliers
to different material vendors. These types of changes have the potential to impact raw material quality that
could impact drug product safety or efficacy. Without supply chain mapping they can easily go unnoticed and
be difficult to identify as the root cause.

Comprehensive mapping is no simple task, however. It places a significant burden on suppliers to

provide information about their manufacturing sites and their supplier networks, often in slightly different
formats, to many customers. Here again, the lack of an industry standard for supply chain transparency is a key
issue. BPOG, Rx360, the Parenteral Drug Association (PDA), the Pharmaceutical Supply Chain Initiative
(PSCI) and other industry groups, in conjunction with regulatory agencies, are working to address this problem.
There are also companies that offer supply chain management services to the pharmaceutical industry. These
firms can help pharmaceutical manufacturers map their supply chains, identify risks and implement systems that
provide valuable information in real time for greater transparency and responsiveness.

4. The Overall Goal: Risk Reduction

In the last decade, the pharmaceutical industry has witnessed the terrible consequences of inadequate
supply chain security; tragic deaths in 2008 due to contaminated heparin; disruption of the supply of key raw
materials/building blocks and pharmaceutical intermediates following the devastating earthquake and tsunami
in Japan in 2011; numerous recalls of parenteral drugs in recent years due to the presence of particulate
contaminants from glass vials; and many patient illnesses from contaminated compounded products in 2014.
Increased public awareness of these issues has led to new guidelines requiring manufacturers to have full
visibility into their raw material supply chains.
There is, as a result, a definite movement to reduce risk by performing risk assessments, implementing risk
mitigation strategies and developing contingency plans. It would, in fact, be interesting to see what results
Rx360 would obtain in 2016, if they repeated the 2013 survey. As a specific example, biologics manufacturers
have steadily moved away from the use of animal-derived materials to a preference for chemically defined
media and feeds for cell-culture manufacturing. They also have a greater awareness of the impact of raw
material impurities on yield and productivity – knowledge they are sharing with their suppliers. In many cases
they are requiring that all raw materials meet higher quality specifications rather than limiting this expectation
 PCT 502 Lecture Notes packaged by Oladapo Adetunji, RPh, PhD

to a few key ingredients.11 Suppliers have responded by developing special, higher grade product lines that
include provision of extensive supply chain and analytical testing documentation.11

5. Development of Strategies

As mentioned above, to achieve real raw material supply chain security and transparency it is essential
to develop a supply chain management strategy that involves supply chain mapping, analytical/ release
protocols and much more. Close collaboration with preferred suppliers can help lead to simplification of the
supplier network. The use of reliable third-party partners, such as contract development and manufacturing
organizations (CDMOs), to manage much of the supply chain, and particularly the sourcing of materials from
emerging markets, can also be a component of an effective strategy.

With respect to testing, it is essential to confirm the identity of each material that comes into a
manufacturing facility, as well as its purity and the presence of any impurities. Testing is conducted following
methods specified in regional pharmacopeias (Europe, US, Japan) and other standards and regulations, but often
also includes additional methods that manufacturers deem appropriate/necessary for ensuring raw material
quality.

Raman, near-infrared, Fourier-transform infrared, and nuclear magnetic resonance spectroscopy are
commonly used techniques for confirming the identity of raw materials. Mass spectroscopy is much more
sensitive, but is typically too expensive for routine raw material release testing; alternatives include blotting,
capillary electrophoresis (CE), various enzymatic methods (e.g. enzyme-linked immunosorbant assay (ELISA)-
based methods) and high-performance liquid chromatography (HPLC).

The introduction of handheld instrumentation is helping pharmaceutical companies meet the

requirements for 100% identification of raw materials. These lightweight devices are simple to operate and can
be set up to provide a pass/fail reading when determining the identity of the material in a given package.
Materials can be evaluated in the receiving area, eliminating the need to burden the QC department with large
numbers of samples. In addition, materials stored in clear packaging can be evaluated without opening the
package.

Effective management strategies are also essential for achieving true supply chain security and
transparency. The use of cross-functional sourcing teams with representatives for different types of raw
 PCT 502 Lecture Notes packaged by Oladapo Adetunji, RPh, PhD

materials (chemicals, packaging materials, etc.) can more effectively integrate risk evaluation efforts and the
implementation of risk management programs. This approach is particularly effective when combined with
work streams targeting the different raw material types. Specialized software and other technologies designed
for supply chain management in the pharma industry are also crucial for achieving ongoing, real-time visibility
into the full raw material supply chain.

For manufacturers looking to source raw materials from suppliers in emerging markets, ensuring supply
chain transparency can be quite challenging. In this case, it is reasonable to turn to a reliable third-party vendor
with an established track record for serving as a high-quality supplier of these materials. Such vendors have
established relationships with these suppliers and have a much larger demand volume, enabling them to gain
access to necessary information. In many cases they are also manufacturers and have the capability to perform
appropriate analyses and purify materials if necessary.

CDMOs, for example, often have very strong relationships with preferred raw material suppliers who
have a deep understanding of the needs of the pharmaceutical industry. Through their increased purchasing
power and ongoing audit and monitoring programs, these CDMOs have the ability to influence supplier
performance and ensure comprehensive supply chain transparency for reduced risk. Often price and scheduling
advantages can be achieved as well. Other benefits of using effective CDMOs as sourcing partners include
access to a larger number of qualified suppliers, their extensive regulatory and import/export knowledge and
state-of the- art supply chain management systems and technologies.

Source of Document
www.pharmoutsourcing.com