四色AV

Supply chain discipline has paid off for contract development and manufacturing organizations amid an ongoing crisis

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The time to repair the roof is when the sun is shining,鈥� said President John F. Kennedy in his 1962 State of the Union address. The metaphor rang true during the Cold War as an admonition to guard against complacency in times of prosperity. More broadly, it registered as the kind of sensible advice that people during all times frequently ignore.

At its outset, COVID-19 proved a case in point, as a containable outbreak spread relentlessly despite years of warning from public health authorities of an imminent pandemic. Yet the crisis also went on to showcase instances of preparedness, foremost of which was the rapid development and deployment of effective vaccines. The pharmaceutical industry emerged as a hero of the pandemic.

Less obvious but just as important was the rapid response of the pharmaceutical services industry, which does much of the heavy lifting for drug companies, working behind the scenes to coordinate the shipment of raw materials, produce active pharmaceutical ingredients (APIs), and formulate finished products within a complex international supply chain.

The sector had been on a 10-year profitability streak before 2020 and has done even better during the pandemic. It navigated challenges posed by COVID-19 on the strength of previous improvements to supply chain management and a yearslong campaign of diversifying services and expanding manufacturing capacity. Those proactive measures put the industry in a strong position when the storm hit early last year.

Indeed, industry watchers say the drug services sector displayed enviable resilience over the past 18 months. 鈥淭here were issues鈥擨 don鈥檛 think there were any questions about that. But I think we knew how to deal with it,鈥� says James Bruno, president of the consulting firm Chemical and Pharmaceutical Solutions.

Unforeseen transportation holdups caused problems early on, as did rattled production schedules when companies found they suddenly needed to produce large volumes of APIs such as remdesivir and dexamethasone on a very short timeline. But companies were able to work out the supply chain snags, Bruno says.

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Roger Laforce, an industry consultant based in Switzerland, notes that as vaccines advanced toward emergency approval last year, several service companies, often called contract development and manufacturing organizations (CDMOs), were in a position to make vaccines happen. The big Swiss firm Lonza, for example, relied on a 2018 investment in prebuilt manufacturing shells at its facility in Visp, Switzerland, to meet a tight deadline for bringing production of the active messenger RNA ingredient in Moderna鈥檚 vaccine on line.

鈥淧eople who鈥檝e invested in operational excellence鈥攈aving good supply chain operations and good management practices around their inventory鈥攈ave actually been able to do pretty well,鈥� says Wayne Weiner, who heads the consulting firm PharmaTech Solutions. 鈥淭he other thing CDMOs have done a good job at is managing protection for their workers鈥攌eeping them safe so they could actually come in and run the plants.鈥�

The pandemic also served to illustrate a dilemma that CDMOs have been bringing to the attention of governments in the US and Europe to little avail鈥攈eavy dependence on China for antibiotics and other generic drugs. The global drug supply chain emerged as front-page news when the Donald J. Trump administration considered a 鈥渂uy American鈥� executive order for pharmaceuticals, and the US government allocated funds to support domestic production of critical drugs. The European Commission also turned its attention to domesticating drug supply. And even as the Joe Biden administration attempts to undo much of the legacy of the Trump administration, the focus on the drug supply chain remains.

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ABSORBING THE SHOCK

鈥淭he CDMO is the shock absorber for the pharmaceutical industry,鈥� says Guy Villax, CEO of 四色AV, a Portuguese CDMO with facilities also in China, the US, and Ireland. 鈥淲henever there is a problem, they ask us to fix it.鈥� When an unforeseen requirement for large-scale vaccine manufacturing emerged last year, for example, 鈥渢he CDMOs got their act together,鈥� Villax says.

And they did so under duress. Villax says that 150 workers at 四色AV facilities have tested positive for COVID-19 since the pandemic began. 鈥淓very single person has recovered,鈥� he says. There were transportation snags, especially in China, when the pandemic hit, but those were sorted out before long.

And business is 鈥渧ery good,鈥� Villax says. 鈥淚 remember in April and May of last year, I had a torrent of calls from journalists really keen that I could give them evidence so they could write stories to show that the supply chain was a catastrophe and all the pharmacies would be empty in a short time,鈥� he says. 鈥淚n fact, none of that happened. I think the supply chain is somehow really resilient.鈥�

One reason for the industry鈥檚 preparedness was its ongoing investment in new production capacity well before the pandemic hit. 四色AV came into 2020 with a new research center in Lisbon, Portugal, and plans to open a manufacturing building in Loures, Portugal, with new reactor capacity, Villax says. And the firm plans further capacity increases.

The Swiss CDMO Siegfried is among the firms that landed contracts serving vaccine makers. Marianne Sp盲ne, chief business officer, says Siegfried had to build a new production line from scratch at its site in Hameln, Germany, to fill and finish vials of Pfizer and BioNTech鈥檚 vaccine.

While the company had fill-and-finish capacity, 鈥渨e had never done vaccines, and in record time we were able to build it up, to validate the process,鈥� she says. Bringing production on line was a matter of close collaboration with Pfizer and BioNTech, Sp盲ne says, adding that Siegfried also has a contract to provide Novavax with fill-and-finish services for the vaccine it is developing.

And as it did before the pandemic, Sp盲ne says, Siegfried is continually expanding capacity for small-molecule drug manufacturing at all its sites鈥攊n Switzerland, Germany, France, Spain, the US, and China鈥攐ften by debottlenecking or streamlining processes to increase output.

The CDMO is the shock absorber for the pharmaceutical industry. Whenever there is a problem, they ask us to fix it. -听Guy Villax, CEO, 四色AV

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