In our earlier blog about the Heparin incident, you saw evidence of a tragic failure of controls in the supply chain. In spite of this incident, the transition to an increasingly globalized and complex supply chaincontinues to gather pace as the industry looks for cost reduction and manufacturing flexibility. The regulator’s job is to demand that patient safety is uncompromised by the changing shape of the supply chain.
Let’s look at this from the differing perspectives of both purchaser and supplier. The purchaser (tier 1 pharma in this example) is essentially changing its role from audited manufacturer to auditor/receiver, often downsizing part of the company’s manufacturing capacity in the process. The first challenge the purchaser faces is to transfer manufacturing know-how to the Contract Manufacturing Organization (CMO), complete with requisite GMP controls. The second challenge is to oversee manufacturing performance and quality control as the CMO ramps up production, continuously monitoring until the CMO reaches steady state. Over time, the relationship changes from intense and “hands-on” to one of oversight and “hands-off.” It takes time, effort and commitment for the purchaser to develop the confidence to get to a “hands-off” relationship while having confidence in the CMO’s quality assurance system.
In contrast, the supplier (CMO in this example) is on a growth trajectory. Often, suppliers have a pared back approach to quality in contrast to the heavy-duty compliance model of big pharma. These companies may lack the sophistication in quality assurance of the tier 1 customers, but are a more agile and lean organization, capable of manufacturing at a much reduced cost. This, after all, is the basis of the supplier’s relationship with the purchaser. The supplier’s challenge is two-fold as the organization increases scale: meet the more exacting quality assurance demands of tier 1 customers while remaining cost competitive as business grows.
While the end game is the same in terms of patient safety, the quality and compliance needs of each party differs in emphasis. This has an impact on consultants and service providers to both parties. In subsequent blogs we’ll explore a little of the history of both categories.