PHARMACEUTICALS
supply chains are complex and ones of appropriate quality and scale can ultimately be limited. The nature of the raw material supply chain for a manufacturing project will very much depend upon the stage of development it is in and the innovator’ s attitude to risk.
Late-stage considerations
For late-stage projects or those already commercialised, there will typically already be a set of qualified supply chains for the critical raw materials, negating the need to search for new sources. When Sterling takes on such a project, that means that the detailed qualification steps for the vendors can be avoided, checks are still needed to ensure that they meet the regulatory requirements and internal quality assurance process, so that these supply chains can be adopted when the API transfers into the manufacturing facility.
When this is not the case, it is important for supply chain and procurement experts to examine all potential options and a pertinent starting point would be to review its own existing qualified suppliers. An established global organisation will maintain its own database of vendors covering the whole spectrum of materials, and will have access to online databases and resources to source materials.
The experience of a procurement team also means that there is the opportunity to add value by identifying alternative raw materials or advanced intermediates that can reduce the number of chemistry steps needed, or look to manufacture key starting materials in-house, to potentially save time and expense.
A further aspect of sourcing that is becoming more important to the industry is sustainability. As well as manufacturers being conscious of their direct impact on the environment, this also transfers down supply chains and the auditing of suppliers involves ensuring that their practices meet global regulations. Working with scientists and plant engineers, supply chain experts also can look to replace hazardous or environmentally damaging reagents or solvents with cleaner and safer alternatives.
Mitigating external factors
For many reasons, the global price of goods is increasing. These include energy, labour costs and inflation, as well as political decisions, such as the US tariffs policy. Additionally, the infrastructure to manufacture basic chemicals and reagents at scale simply does not exist in Western countries and, therefore, however unpredictable the fluctuations are in these prices, macroeconomic factors are very difficult to mitigate against.
There are certain strategies that can lessen the impact, such as buying common reagents in bulk across multiple projects, using bulk solvent delivery systems and maximising storage capacity where possible. One of the most beneficial strategies by far is for procurement teams to work with the operational departments to understand production schedules so that materials can be bought in advance. This allows the opportunity to engage cheaper sources, albeit with potentially longer lead times.
The volatility of prices can have consequences for the profitability of manufacturing supply agreements, especially ones where a contract has been in place for some time or where a commercial API campaign is delivered over a period of 12-18 months. Most contracts have an agreed level of raw material costs allocated within them, but this must be monitored to ensure that any fluctuations do not have a detrimental effect on the total project cost.
Close communication and relationship management between the manufacturer and supplier are crucial to ensure any large increases can be mitigated and potential product shortages are identified early so that market changes can be reacted to as soon as possible.
SEP / OCT 2025 SPECCHEMONLINE. COM
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