Kaus – Number of CDMOs could shrink drastically
dual sourcing to manage risk across all markets is the paperwork , both on the regulatory and on the risk management side . Raw material suppliers would be “ lazy ” to expect to be single-sourced ; they should expect to be one of two and to perform as if they were competing with the other .
Sterling has seen a desire among its Big Pharma customers to dualsource . “ We often get requests for a Western-based supply chain going as far back as possible ,” said Molyneux . “ The reality we need to face is that the infrastructure doesn ’ t exist in the West to go all the way back to raw materials and solvents . It ’ s about working to limit the risk as much as possible from a geographic standpoint .”
There is still a price gap , he added , and in the short term at least , customers will continue to use Asian providers while having the security of a Western provider on standby should they need one . He has not seen much movement yet as to how early that happens – “ maybe a little earlier in the launch cycle , but I don ’ t see it moving into Phase I or II .”
Making partnerships close
Siegfried , Spaene countered , has carried out risk assessments
Molyneux – CDMOs must have a service approach
to identify risks in customers ’ authorised vendors . Having a second supplier available only for the long term “ does not work in reality , because you need to give him something at the beginning , otherwise he will disappear ”.
“ I think there ’ s an important conversation to be had about ‘ share of wallet ’,” Molyneux agreed . Cost is always a big element of the discussion . “ If we can find a way , through innovation , new techniques and partnerships to guarantee minimum volumes , we could be more aggressive on price . That would be a win-win but it will take a lot of time for companies to get there .”
Yu of PHT asked the panel to remember the vastly truncated timelines of COVID vaccine development . Sometimes partnerships were struck up in just two weeks . PHT itself developed three processes in nine months and each was accepted . It showed what is possible when the need is urgent .
“ I do think it ’ s incumbent on us as suppliers to have that service approach and find innovative ways to support the needs of Big Pharma and biotech customers ,” said Molyneux . “ Can we , as CDMOs , innovate in ways to make things easier for dual-sourcing sooner , to make our registration process happen in parallel with the existing registration without slowing things down ?”
Sterling itself has in the past offered dual-sourcing internally , registering two sites as a supplier so that there is redundant capacity , he added . It has also spread manufacturing steps across different sites to address ever more complex molecules and the lengthening supply chain getting longer . Convergent synthesis sometimes makes it possible to carry this out in parallel , contributing not just to cost- and resourceefficiency but also , inherently , to risk management .
Networked suppliers
“ The big challenge is integrating the sites and operating them as a network rather than as stand-alone profit centres or individual verticals within the business ,” Molyneux continued . This means integrating the project teams and the systems .
Sterling has also worked to globalise and harmonise its costing structure where possible . This enables the company to be more flexible in the event of timeline changes and also gives it internal options to place assets where the gaps are .
Molyneux also stressed the importance of taking a network approach from the beginning and tying it to the assets that can be validated , rather than “ moving after the fact ” and thereby creating regulatory hurdles . “ If you can say ‘ This is what we ’ re going to do to ensure the materials arrive at your site at the time you expected , the cost we promised and in the quality we agreed to ' this can greatly assist customer relationships ", he continued .
Deeper relationships with customers are now the norm , including giving them visibility into your business , he added . Partnership , honesty and transparency – including about internal challenges for the supplier – are Sterling ’ s watchwords . The company always shows the customer why the cost is what it is and what improvements could be
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