Ensure transparency, sustainability, and responsibility in your pharmaceutical supply chain

Pharmaceutical companies are embracing the challenge of sustainability and responsible business, with a heavy focus on how the industry can better engage, monitor, and improve their third-party suppliers and contract manufacturers. It’s realized and understood across the industry that environment, safety, and social outcomes are critical to the development and manufacturing of medicines and involve strong engagement to effectively monitor compliance from the supply chain.

But who is interested in and requiring supplier assessments - why are pharmaceutical organizations advancing their approaches to engaging and assessing risk within their supplier base?

Healthcare systems – end customers

Customers of the pharmaceutical industry, such as wholesalers, pharmacies, and healthcare systems, are becoming increasingly more interested in the end-to-end lifecycle of medicines, expecting full transparency from manufacturers regarding their suppliers. While the focus has historically been on quality, efficacy, and safety of the medicines, an expanded focus on EHS and sustainability areas such as:

• Pharmaceuticals in the Environment / Antimicrobial Resistance
• Process safety and chemical management
• Industrial hygiene
• Carbon reduction
• Ethics and human rights
• Governance and management systems controls

Investment Community

The financial investment community has collaboratively produced guidance to the biopharmaceutical sector with the request to communicate and report on key Sustainability and Environment, Social, Governance (ESG) initiatives externally – through the Biopharma Sustainability Roundtable initiative (BSRT).

As a result of this, the financial investment community is looking at how they can attach offerings, such as green bonds, to sustainability programs. While the focus of the financial investment community has been on the R&D pipeline, pricing, access to medicines, and quality – this ESG communication guidance highlights key sustainability focus areas:

• Supply chain management
• Climate Change
• Environmental Impacts
• Antimicrobial Resistance

Governments and Regulations

Governments bring a growing driver to understand how organizations are governing and engaging their supplier base to protect the environment overall, as well as the security of supply. Governments are connecting some of their environmental drivers to their medicine supply incentives, as a continued learning from the pandemic. Focus includes:

• Protect the environment, resource security, and overall population health
• Link supply chain oversight into future regulatory frameworks
• Prioritize sustainable procurement

What are the challenges? BSI believes they come down to four core areas:

Scale

Pharmaceutical industries have a good knowledge of their supplier base as there is a big focus on understanding risk from suppliers to get medicines approved by regulators, but the scale is still vast – especially in the generics market

An evolving need for treatments for rare illnesses and greater access to medicine efforts in the developing world means there’s a need to expand the manufacturing supply base to accommodate new research and development. Contract manufacturing is also on the rise as outsourcing becomes more common.

Control

Control over the supplier base is a challenge for the generics industry, as they don’t necessarily have the buying power or the financial influence to engage suppliers and get them to commit to requirements that are coming through the supply chain.

Volatility

The volatility of supply was evidenced strongly throughout the COVID-19 pandemic, with the need for the quick supply of medicines in crisis situations. Due to forced shutdowns in key supply countries, there were limits in the ongoing supply of key medicines to destination markets.

Velocity

Given the vast array of crises that we experience today, how do we get drugs to certain markets at pace? How do we make sure we have a systematic way of engaging suppliers and understanding the risk and efficiency of those supplier bases so we can quickly adapt to the velocity request?

These market shifts and challenges show the need to have greater control and oversight throughout the supply chain.

If you would like to learn how BSI is supporting the pharmaceutical industry in driving best practices and improvements through their supply chains, please watch on on-demand webinar.

You can also continue exploring our website.

Courtney Soulsby, Sector Director for the Healthcare & Life Sciences, BSI

Working to understand the market challenges and future needs of the healthcare sector, Courtney works with key clients and industry partners to develop holistic solutions, strategies, and programs. Courtney has worked with the Pharmaceutical Medtech industry and their supply chains for over ten years – with a deep understanding of the issues with regulation, compliance, quality, and other risk exposures when transporting medicines and devices.