Speciality Chemicals Magazine MAR / APR 2025 | Page 23

PHARMACEUTICALS then transformed using advanced synthesis into highly complex molecules to fight addictions and other serious conditions . These include naltrexone and buprenorphine to treat long-term addiction , while naloxone is the reference overdose reversal medication against synthetic opioids like fentanyl .

EuroAPI ’ s Microbial Fermentation business makes highly sophisticated small molecules using fermenters up to 300 m 3 , while the company is fully integrated from cell banking to downstream processing ( DSP ) and final drug substance production . This integration starts from critical raw material sourcing like vegetal biomass . For example , the Vitamin B12 ( cyanocobalamin ) precursor is sourced from farmers located within a 300 km radius around Normandy .

Finally , the Oligonucleotides & Peptides business is also integrated along the value chain , where precursors and critical side chains such as Galnac could be produced , and in addition along the API lifecycle with capabilities from early clinical support to launch and commercial manufacturing .

Contradictory pressures

Pharmaceutical companies face contradictory forces for off-patent medicines . That said , other than for NCEs , finding the trade-off between sourcing from the lowest spot available price and a longer-term perspective is not an easy task .

The cost pressure for standard generic medicines has reached a tipping point , where any weakness in the supply chain may turn what could have been a short-term disruption into a deeper crisis . Most Western countries are now suffering from chronic shortages of mature medicines , which are caused by

Vertolaye ’ s integration was critical during the COVID crisis

multiple factors often embedded into an overall cost reduction process .

National health agencies are now employing dedicated teams to track and follow medicine shortages , with the option of significant fines . In September 2024 , France ’ s ANSM fined 11 French pharmaceutical laboratories € 8 million in total over this . 7 Consequently , procurement and strategic sourcing in most pharma companies need to reach a fine balance between the multiple factors they need to consider in their API sourcing and supply chain resilience .

Figure 1 shows the forces affecting the API industry . These are now clearly in favour of integration when long-term cost control , strategic fit and environmental aspects are truly considered . Perhaps the most important factor is ‘ economic value added fragmentation ’ associated with multiple actors in the API synthesis . This decreases supply chain robustness under strong economic pressure , creating the temptation to quit manufacturing towards a more profitable product .

Conclusion

The increasing fragmentation of manufacturing processes , which was seen ten years ago as a neverending search for cost reduction , specialisation and leveraging on lowcost intermediates produced in China is now turning into a major weakness .

Where the strategy of buying each chemical at the lowest possible cost , anywhere in the world , can effectively reduce costs in the short term , the consequential supply chain weakness is a dangerous strategy in the long term for many established APIs . The disadvantages are now growing : higher logistical costs , an environmental impact which cannot be hidden where the carbon atoms have travelled several times around the global prior to reaching the drug substance stage and inherent fragility .

Strategic sourcing and procurement teams should therefore take a value chain perspective and consider the integration level among their supplier as a key long-term driver for value creation and supply line robustness . ●

MAR / APR 2025 SPECCHEMONLINE . COM

23