‣ were abandoned in favour of massive outsourcing to Asia and especially China , going up the API supply chain . A few months before the outbreak of the pandemic , the US FDA pointed out the lack of transparency and the excessive complexity across the drug supply chain in a report . ¹ This stated that “ in general , productspecific information regarding supply chains is tightly guarded by firms as a trade secret or commercially confidential information . “ Purchasers of drugs , and intermediaries , such as GPOs , generally have little or no information linking the drug product they buy , or contract for , with the specific sites where they were manufactured . In addition , they have only limited information that could be used to assess the quality management maturity of specific sites .

Figure 1 – Main selection & evaluation factors for drug substance partners before COVID-19

ORGANISATIONAL STABILITY

& RELEVANCE OF THE STRATEGY

TECHNICAL CAPABILITY ASSESSMENT

COMPETITIVENESS

API SUPPLIER EVALUATION

Before COVID-19

ANNUAL PRODUCT REVIEW FOR ALIGNMENT SPONSOR / CDMO

“ This lack of transparency , coupled with difficulty assessing quality management maturity , makes it challenging for health care providers and GPOs to distinguish manufacturers based on whether they can consistently and reliably provide adequate supplies of a drug . Similar transparency issues apply to [ API ] manufacturers , leading drug manufacturers to prioritise API procurement based on price , rather than quality .”

Supply factors then & now

Figure 1 shows the main factors considered by most of the pharmaceutical companies in selecting and evaluating a drug substance partner before COVID-19 . Besides having the right technological capabilities and a CDMO culture compatible with the buyer ’ s , cost ,

QUALITY REGULATORY & SHE COMPLIANCE

CDMO FINANCIAL STABILITY compliance and corporate stability were the most common drivers . The pandemic has triggered strong nationalist reactions , which will impose a new paradigm in defining industrial manufacturing strategies for important drug substances . Two major events can be considered as pivotal . In March 2020 , the Times of India reported , the Indian government “ banned the export of 26 pharmaceutical ingredients including paracetamol , antibiotics and some hormones due to the spread of coronavirus and disruption in supplies from China ”. ² Later , as reported in the South China Morning Post on 10 September 2020 , China debated cutting US access to drugs as a “ nuclear option ” as the US “ ramped up its attacks on Chinese tech firms and the threat of financial decoupling has grown ”. The article specifically mentions precursors for pain relief or HIV medications . ³ This potential ‘ weaponisation ’ of drugs clearly means actually leveraging the API or its chemical precursors . The US-China trade war and the rise in economic nationalism will make the world a different place with different rules . As the global economy moves away from open trade , companies in the life science sector need new strategies and relationships that balance economic efficiency with supply security . We can anticipate that the Big Pharma will progressively integrate these trends in their manufacturing plans . Finally , related to this megatrend , the crisis has raised public awareness about climate change and the impact of human activity on our environment . This will translate into a gradual and persistent pressure on political power in the Western world and probably later in less democratic countries . Figure 2 shows a new set of post- COVID factors to integrate into the traditional API sourcing model . These forces are already in motion now . For example , Kodak Chemicals has been granted a 25-year , $ 765 million loan under the Defense Production Act to manufacture generic APIs .

18 SPECIALITY CHEMICALS MAGAZINE ESTABLISHED 1981

Speciality Chemicals Magazine JAN / FEB 2021 | Page 18