Life Sciences Supply Chain Disruptions Set to Persist Through 2022

Tony Quiñones, CEO of Bright Path Laboratories / Courtesy of Bright Path Laboratories

Supply chain disruption will affect biopharmaceutical companies for the foreseeable future, according to the recent CFO survey, Supply chain resilience, by BDO. A separate report by Catalent, 2022 Allogeneic and Autologous Cell Therapies Reportagrees, saying, “Bottlenecks are one of the most common obstacles faced by cell and gene therapy developers.

Drilling down to identify specific concerns, BDO found that global life sciences companies are most concerned about rising material costs (51%), supplier risks or delays (46%), supply shortages (41%) and trade compliance violations (41%). For US-only companies, the main issues were slightly different. These respondents were most concerned about rising material costs (37%), unpredictability of demand (37%), lack of supply chain technology (33%) and trade compliance violations (24%). Supply shortages (21%) and supplier risks or delays (19%) were less of a concern.

BDO respondents said their perception of risk was driven by a mix of geopolitical concerns, data protection regulations, geographic commodity concentration and ongoing COVID-19 outbreaks. (Lesser concerns included tariffs, regulations, transfer pricing and international tax incentives for R&D.)

For example, Tony Quiñones, CEO of Bright Path Laboratories, Inc., told BioSpace that many key raw materials come from regions — like China — that still experiencing blockages. A recent article in the South China Morning Post notes that although the port of Shanghai operates 24 hours a day, many warehouses are closed and truckers are reluctant to enter the area due to the risk of being quarantined. Any delay there trickles down to India, which needs those materials to make the intermediates, and then to those who make the finished product.

To cope with this year, life sciences companies are undertaking supply chain risk assessment, conducting manufacturing or purchasing assessments, investing in supply chain technology and identifying suppliers of rescue.

There is also another option. The approach advocated by Bright Path Laboratories is to reduce the number of steps and ingredients required to manufacture the drug of interest. “Often there can be 20 different suppliers or ingredients needed to develop a drug. Our process eliminates a number of these ingredients,” Quiñones said, using rapid synthetic development and highly automated and controlled use of commercial-scale cGMP manufacturing.

“Our process doesn’t require as many solvents and precursors to break down a chemistry and have them react together,” he explained. “In one case, we reduced from 10 suppliers to four.”

Quiñones has predicted supply chain stress for many companies in the fields of rare and orphan diseases, as well as mRNA therapies. The current and limited number of suppliers in this area will be stretched, which will ripple through and put increased pressure on essential medicines.

Bright Path is also working with a Ukrainian vendor to help address customer gaps following the Russian invasion.

“Drug developers are looking for sustainability in their supplies, and the supply is currently unstable. There were issues before the pandemic, and now developers are seeing their six-month supplies dwindle, so they need reliable national partners” , said Quiñones.

Supply chain issues, global uncertainties and “buy American” mandates from the federal government are contributing to the return of some manufacturing to the United States. Buy American Initiative signed by President Biden in 2021 and finalized in March raises the required domestic content for federal buyers from 55% now, to 60% in October, 65% in January 2024 and 75% in January 2029.

Bright Path is bringing its capabilities online in North Carolina and New Mexico and already serving its customers. Quiñones is quick to point out that this was done without receiving money from Operation Warp Speed, while some who received funding to manufacture products domestically are expected to break new ground later this summer.

Cell therapy developers are also feeling the strain, although they are more focused on manufacturing. Respondents to the Catalent report noted the challenges of cell therapy manufacturing – including, “putting themselves in the queue for plasmid and vector production” and “working with an outside party to plan and facilitate improvements in our manufacturing process” – as reasons to develop in-house manufacturing. Some 57% (about the same percentage as those who manufacture in-house) cited the need for better control of the supply chain as the main reason for this decision. Of the 43% who manufacture their cell therapy products with a partner, 53% said the main reason was their lack of internal capacity. Only 29% cited access to their partner’s expertise as a reason for outsourcing.

In 2022, with COVID-19 restrictions and war affecting some of the key geographies that produce pharmaceutical ingredients, any delays impact shipping and manufacturing. To minimize disruption, biotech companies would be well advised to make their supply chains as resilient as possible (by creating layoffs, such as identifying alternative suppliers) and finding on-the-fly sourcing and manufacturing options. shore or near shore.

Quiñones advised suppliers to forecast needs for 6 to 12 months and ensure they each have adequate supplies.

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