|Email Newsletters from Pharmaceutical Technology and Pharmaceutical Technology Europe|
Providing the latest business, scientific, and regulatory news for the pharmaceutical and biotech industries.
News from Europe's pharmaceutical manufacturing industry coupled with upcoming events, and exclusive articles and interviews from industry experts.
Executive Insight: Pfizer on the Supply Chain in Emerging Markets
An important consideration for the pharmaceutical industry collectively and as individual companies is to evaluate and implement ways for building supply-chain integrity in emerging markets. The industry’s strategic interest in working with suppliers outside the traditional supply lines in North America and Western Europe is well-established, but there are challenges in building those relationships, including fostering an understanding of pharmaceutical quality systems. Patricia Van Arnum, senior editor of Pharmaceutical Technology and editor of Sourcing and Management, discusses efforts by the industry and Pfizer in managing the supply-chain in emerging markets with Gerry Migliaccio, senior vice-president of network performance for Pfizer Global Manufacturing.
PharmTech: As the level of outsourcing increases into emerging, lower-cost regions, the pharmaceutical industry as a whole faces certain challenges in securing the supply chain in those regions. What would you identify as the most critical areas of concern?
Migliaccio: There are quite a few areas that we are focused on. From my perspective, one of the most critical is the control of suppliers to our suppliers. Assuring that this part of the supply chain is secure is of great importance.
PharmTech: You have said that part of the task of the pharmaceutical industry is to help companies in emerging markets build effective pharmaceutical quality systems through a combination of education, evaluation, and enforcement. In looking at the education component first, can you outline how the pharmaceutical industry as whole, through trade associations and regulatory authorities, is pursuing these educational goals in building understanding of international standards such as ICH Q7 Good Manufacturing Practice Guide for Active Pharmaceutical Ingredients and ICH Q10 Pharmaceutical Quality System ?
Migliaccio: Multinational companies, including Pfizer, have been actively providing educational opportunities on GMP [good manufacturing practices], quality systems, and supply chains to emerging markets through trade organizations and in collaboration with regulatory authorities. Examples include:
PharmTech: Can you outline any projects that Pfizer may be working on individually and/or in tandem with these industry groups?
Migliaccio: Pfizer is working with other PhRMA companies to bring 20 SFDA inspectors to the US for three weeks to provide them insight into our application of GMPs. The plan is to cover all quality systems at manufacturing sites of the companies involved. We are hoping to schedule this in 2010. In addition, in partnership with IPEC [International Pharmaceutical Excipients Council] Federation, we have been working closely with the SFDA regarding excipient GMPs. Pfizer was one of the founding members of IPEC–China.
PharmTech: Is the outreach specific to individual companies and related working relationships or are there other collective areas of educational support?
Migliaccio: Both. The efforts above are collective in nature. We also conduct specific onsite training for companies supplying Pfizer.
PharmTech: In addition to working with individual companies in emerging markets to build their understanding and implementation of pharmaceutical quality systems, how is the pharmaceutical industry or individual drug companies building that level of understanding through educational organizations, universities, or other groups in emerging markets? Can you offer any specific examples of projects?
Migliaccio: In addition to participation in the educational programs listed above, Pfizer has been a strong supporter of Peking University’s master’s degree program of international pharmaceutical engineering management. We hosted the master’s degree students at a Pfizer site and supported a Peking University quality-by-design workshop.
PharmTech: What would you identify as the critical component in the evaluation phase of potential suppliers? What specialized or additional requirements may exist when working with suppliers from emerging markets?
Migliaccio: Again, there are many critical components of an evaluation from business, manufacturing capability, quality systems, and environment, health and safety [EHS] perspectives. Once the basic viability of a potential supplier has been established, we focus on their quality and EHS management systems. Companies in emerging markets that have been supplying multinational companies frequently have reasonably well-established management systems. With others, we find a wide diversity in management systems.
PharmTech: What would you identify as the key elements of enforcement in a strategy for supply-chain security?
Migliaccio: I will oversimplify this response, but in essence: do not enter into supply agreements with companies that do not meet acceptable standards and terminate agreements with companies that do not maintain acceptable standards.
PharmTech: The industry as a whole is evaluating tools such as shared supplier audits as a possible way to manage the costs and logistics in increasing the scope or extent of supplier audits. Do you think this is a viable option, and what are the advantages or disadvantages of such an approach?
Migliaccio: I strongly support collaborations to enhance supply-chain security. Other industries do it without violating antitrust regulations, so I see no reason why the pharmaceutical industry cannot do it. The sharing of information must be fact-based. The sharing of information will help us better understand the state of management systems at a given supplier. However, we cannot rely on shared audits to assess the functionality of a material for a specific product. That assessment must be done on a product-by-product basis.
PharmTech: Looking ahead 5 to 10 years from now, how do you see the pharmaceutical supply chain evolving in terms of the number of suppliers, location of suppliers, and the relationship between suppliers and customers (such as realizing more collaborative planning, i.e., demand forecasting). Are there models now used in other industries that may have future application in the pharmaceutical industry?
Migliaccio: In our industry, looking beyond three years is truly ‘blue sky.’ Consolidation has been ongoing in the pharmaceutical industry, and I would expect that consolidation to continue to occur throughout all elements pharmaceutical supply chain. Clearly, it is our desire to work with a limited number of highly reliable suppliers. Ideally, we will reach a point where the overall planning processes for the external elements of our supply chain are the same as those for our internal supply chain.