Bio/Pharma Executives Provide Insights on What’s Next in Supply Management at Virtual DCAT WeekBy
The industry has risen to a myriad of challenges due to the pandemic, but what is next in supply management? Executives from J&J and Gilead provide their views on adapting industry best practices in supply management, including for risk mitigation.
Lessons learned from the pandemic
In meeting the immense challenge of developing COVID-19 vaccines and treatments, bio/pharmaceutical companies also had to meet the equally substantial task of manufacturing and supplying large volumes of vaccines and treatments under accelerated timelines. In an executive forum, Executive Insights I: Manufacturing and Supply —Lessons Learned from the Pandemic, presented at Virtual DCAT Week, held July 12-16, 2021, Remo Colarusso, Vice President, Janssen Supply Chain, Johnson & Johnson, and Ken Kent, Senior Vice President, Chemical Development and Manufacturing Operations, Gilead Sciences, shared how their companies were able to meet that challenge: J&J with its COVID-19 vaccine and Gilead for remdesivir, its small-molecule antiviral drug for treating COVID-19. The program was moderated by Bob Kanuga, Senior Vice President, Healthcare Logistics and Distribution, UPS Healthcare, Former Vice President, Global Supply Business Development, Merck & Co. Inc., and past DCAT President. DCAT Week is the premier global event for companies engaged in the bio/pharmaceutical manufacturing value chain and is organized by the Drug, Chemical & Associated Technologies Association (DCAT), a global business development association.
Key success factors
In identifying the most important factors for successfully supplying the company’s COVID-19 product, remedesivir, and responding to the challenges from the pandemic, Gilead’s Kent emphasized that existing supply-chain resiliency, already built into the company’s supply chains, was key. “No one would have planned for a pandemic, but in supply chain, you always prepare for what could go wrong,” he said. “Having those what-if scenarios in mind and the mitigations in place in case those possible events could happen was really key,” he said. Although those scenarios evolved around more common issues, such as environmental, health and safety issues, the impact of trade policy, or natural disasters, Kent emphasized that such planning “gave us a mindset that things can go wrong and gave us a playbook to go to and allowed our supply chains to be very resilient and robust.”
J&J’s Colarusso emphasized several key elements that enabled the company to meet the challenge of supplying its vaccine through development to commercialization. “What was really key was our senior management saying that we are going to do this and let’s make it a number one priority and having that alignment and focus throughout the organization,” he said. He explained that key to the company moving forward on the supply side was its prior work in supply-chain resiliency. “It was then about what could go wrong, how do we create global supply, how do we do it quickly, how do we take into account all the risks that usually come with manufacturing a product,” he said.
Building a supply network
In addition to preparing their internal manufacturing networks for the supply of their COVID-19 products, both executives stressed the importance of collaboration with their external manufacturing partners and suppliers in realizing their respective supply targets.
“The partnership with external suppliers was excellent,” said Gilead’s Kent. “They were all motivated to help and prioritized our product over others,” underscoring two important reasons: (1) Gilead’s established position in antivirals and remdesivir’s potential as a COVID-19 treatment and (2) having long-established relationships with their suppliers. “They also understood where we were—that there were a lot of unknowns and that we had to be dynamic and adaptive to change.” Kent explained that adaptability was seen, for example, in conducting technology transfer, which under normal conditions, would have been conducted onsite at their suppliers, but which could not be done onsite due to the pandemic. “The team was very thoughtful, innovative, and precise,” he said, to address the situation and solve the problem.
J&J’s Colarusso explained that a key challenge was just the scale of the project and the nature of the product itself, a vaccine, given across the global population with potential supply of billions of doses, much larger than what would be required for a therapeutic, for example. “We recognized that no one single entity can do that by itself. We knew that we had to work with partners to expand, upscale, and outscale the manufacturing. We knew that we would also leverage internal capabilities and that there would be a mix [of internal and external capacity].” He also emphasized collaboration and the willingness of partners to facilitate the project, given the importance and priority for a vaccine.
Resolving supply-chain challenges
The executives also provided further takeaways on an industry level in addressing supply-chain challenges arising from the pandemic. One of the unintended consequences on the industry’s supply chain collectively has been capacity crunches for materials used in bioprocessing, such as vials, single-use components (e.g., tubing, filters and bags). Demand for these materials, already strong due to the industry’s bioprocessing needs stemming from increased development of biologics and vaccines over recent years, has been taken to a different level with high demand from COVID-19 products. Government interventions and capacity/production increases by suppliers are some of the ways that have been used to address these challenges.The situation also underscored an important point raised by the executives: the value of having full understanding and visibility into a product’s supply chain, including for commonly sourced low-cost materials, commodities, or ancillary supplies. This supply-chain knowledge also extends to how materials sourced are used in other industries and how supply–demand issues in those other industries may affect availability. Both executives also emphasized the importance of having strategic inventory to mitigate potential supply disruptions.
The executives also shared perspectives on other issues that have arisen due to the pandemic and what the industry may consider in future supply management. One issue relates to ongoing debates about global versus regional/national supply chains and the call, by some in public policy formation, to move to national supply chains. The executives pointed out that large, multinational companies typically operate global supply chains and use regional networks to not only supply locally but the world, which helps to mitigate risk by leveraging different regions and redundant supply-chain nodes. The executives also thought that remote interactions, such as virtual supplier audits, used during the pandemic out of necessity, were an important tool and may continue to be used in the future in some form, but would not replace in-person, onsite audits, which will continue to play an important role in supplier interactions.
Aside from pandemic-related issues, the executives were asked what other issues would influence the direction of manufacturing and supply management over the next five to 10 years. One issue was the rise in personalized/precision medicines, such as CAR T therapies and more targeted therapies, which engender new ways to manage those supply chains by segmenting those supply chains based on that personalization. Increased digitalization was noted as another important trend with the application of digital tools, such as machine learning and advanced analytics, to better forecast demand and supply, as well as the use of portable devices in manufacturing to facilitate batch management.