News & Press
DCAT Value Chain Insights’ “5 Minutes With,” part of the DCAT Member Company Community section, features interviews with business and industry leaders on issues impacting the bio/pharmaceutical manufacturing value chain. This “5 Minutes With” features Dr. Michael Quirmbach, CEO & President, CordenPharma, a CDMO of active pharmaceutical ingredients (APIs) and drug products, to discuss key trends/issues impacting the CDMO sector in 2022.
Quirmbach (CordenPharma): Since the beginning of the pandemic in the first quarter of 2020, the CordenPharma team has continuously reviewed and established a more rigorous process for all of our customers’ key product supply chains, with an emphasis placed on developing and supporting their supply-chain resiliency. As a part of this strategy, combined with feedback from customers, we see an even greater market urgency to explore options for multi-sourcing of key raw materials and components as well as to expand geographical diversity of supply into areas such as Europe and the US. In addition, investment in new supply-chain technology (e.g., cloud computing, artificial intelligence [AI], robotic process automation) is a key factor in order to fully visualize and optimize supply-chain management, especially in this ever-changing landscape of manufacturing scale-up and demand for critical medications.
Quirmbach (CordenPharma): Although the pandemic created an unprecedented effort in the pharma industry to find effective vaccines and therapeutics against SARS-CoV-2 over the last two years, other significant programs were given less priorities, thereby causing delayed clinical trial initiation, where enrollment either started very slowly or was altogether suspended. In particular, trials for oncology and central nervous systems drugs greatly suffered. In 2022, we hope to see some of that backlog get cleared, and the focus shifted back to pre-coronavirus times, which is not only important for many biotechs active in these areas, but ultimately for the patients in need of new life-saving medications. Similarly, afteranumber of new product launches stalled or many bio/pharma companies were struggling to get their new drugs to patients, we anticipate an improvement in this area by the second half of 2022.
In addition, the pandemic exposed the weaknesses in the pharmaceutical industry’s global supply chain across various sectors ranging from the sourcing of raw materials and components for the manufacturing of biopharmaceuticals and injectables to API supply. The outdated supply-chain management established over the past decades in the pharma industry proved to be unreliable in the face of crisis and generated unforeseen issues with production caused by events such as a global pandemic. As a consequence, longer manufacturing lead times and unpredictable demands are still likely to cause problems through the end of 2022. As an example, the difficulty in sourcing components required for manufacturing biopharmaceuticals and injectables (aseptic fill–finish)—many of which have lead times today that are at least three times longer compared to 2019—is of course a consequence of the extremely rapid and quite successful scale-up necessary to manufacture and supply billions of vaccine doses worldwide. One can, therefore, only assume the situation will continue into 2022, with the hopes of an improvement by year-end.
Other topics impacting the pharma industry are caused by the reduced demand for prescription drugs, along with continued growth in competition from generics and counterfeit medicines, which will require further attention across the board from pharma companies to CDMOs.
Quirmbach (CordenPharma): Supply-chain problems for biopharma raw materials, including components as elaborated previously, will continue to impact CDMOs active in the field. Careful planning, stockpiling, and the qualification of new / additional sourcing (where possible) will be imperative.
During the pandemic crisis, many CDMOs had to quickly adjust in various ways, such as with the acceleration of their digitization strategy, which was necessary for business processes such as virtual meetings or for more impactful purposes, such as virtual site tours needed to conduct confidential customer visits and audits by customers and regulatory agencies. So what lies ahead for the CDMO sector will be a mandatory digital transformation to ensure the ongoing success and competitiveness of US and European pharmaceutical manufacturers. CDMOs that want to succeed will need to engage with the right people (who have the digital acumen to understand the business-changing impact of new technologies) and start incorporating smart technology into their facilities and processes to increase efficiency, reduce costs, improve quality, and gain full transparency into the supply chain.
In addition, we unfortunately anticipate an elevated number of cyber incidents to occur in 2022, with CDMOs and pharmaceutical companies at an increased risk profile due to the use of information technology and operational technology systems. Potential cyber incidents include ransomware attacks, which seem to have increased over the years, email fraud, and hacking of company and customer confidential data. For a CDMO, it is not only about protecting financial damage due to disrupted operations, but about putting preventatives for cyberattacks in place to avoid safety hazards, loss of reputation, and damage to their overall relationships with customers. CDMOs will, therefore, need to involve professionals to identify vulnerabilities in their network and take their suggested recommendations to close any gaps.
Lastly, many CDMOs will continue their growth trajectory in 2022, which will require an increase in their workforce. As in many industries, CDMOs may face challenges hiring top talent since technical positions such as experienced operators, scientists, and quality personnel (quality control/quality assurance) are increasingly difficult to fill due to the high demand. CDMOs will not only need to put emphasis on their company culture, but also consider other talent pools (e.g., unemployed non-students, students) to meet their workforce needs. In addition, the use of technology to enable scalable and consistent implementation of practices, processes, and programs that support diversity, equity, and inclusion are crucial. Finally, CDMOs will need to prioritize and promote environmental sustainability and social responsibility to attract a younger workforce.
Quirmbach (CordenPharma): Again, the pandemic has demonstrated how bio/pharma companies and CDMOs can jointly achieve great results—namely the rapid development and ultimate joint production of vaccines and other therapeutics. Following this example, bio/pharma companies will need to shift their outlook on CDMOs as not only tactical capacities but strategic partners integral to the formation of their sound supply chain. This will also likely yield an industry transformation which relies more heavily on technologies such as AI, machine learning, and the Internet of Things (IoT), data-driven platforms, and blockchain. It is predicted that future pharma innovation will be built on many of these digital investments for use in supply chains, clinical trials, and drug development. Technology will provide greater visibility and make supply chains more customer-centric. Similar to customers placing an order with an online portal, which allows for order tracking status, the future CDMO landscape will likely allow customers to view the status of their projects and upcoming deliveries in real time via data captured online.