Supply Chain Pain - Pharmaceutical Technology

Latest Issue

Latest Issue
PharmTech Europe

Supply Chain Pain
Lessons from the earthquake in Japan show the vulnerability of the bio/pharma supply chain.

PTSM: Pharmaceutical Technology Sourcing and Management
Volume 7, Issue 6

Jim Miller
The tragic earthquake and tsunami in Japan in March rocketed supply-chain issues to a prominent position. Even the most sophisticated supply-chain managers were caught off guard by the event, which caused the shutdown of many manufacturing sites due to earthquake damage or power-supply interruptions.

What is striking about the impact of the Japan earthquake on the supply-chain is the widespread production disruptions caused by supply interruptions of simple components. Automobile manufacturers were forced to shut down manufacturing operations at plants around the world due to component shortages. For example, Ford halted shipments of some cars just because of a shortage of certain paint pigments. Perhaps most famously, production of Apple's iPad2 was threatened by the shutdown of a supplier in northeastern Japan making a connector costing just a few cents.

The automobile and electronics industries are known for their supply-chain sophistication, including their ability to source components globally and have them delivered just-in-time to the manufacturing floor. The fact that their production would be disrupted by such minor components speaks to just how complex effective supply-chain management really is.

Bio/pharma industry vulnerability

Reports so far suggest that the bio/pharmaceutical supply-chain has only been marginally affected by the events in Japan. We have heard of only two interruptions. One was from a supplier of glycine, an ingredient in some common solid-dosage products, which indicated that production may be shut down for up to 24 months. We also heard of disruptions in some supplies of gelatin used in softgel capsules, for which alternative suppliers are readily available.

Nevertheless, the bio/pharmaceutical industry has not been without its own supply-chain difficulties in recent months. A major fire destroyed a warehouse attached to Catalent's commercial packaging facility in Corby, United Kingdom, and problems stemming from delamination in glass vials resulted in a number of injectable products being recalled from the market.

The pharmaceutical industry has done surprisingly little to protect itself from supply-chain interruptions. PharmSource recently conducted a survey about a widely used component for solid-dosage drugs, which typically requires preformulation compatibility testing, and found that few companies have exhibited the foresight to qualify second or third suppliers.

For component-assembly industries, such as automobiles or electronics that are relatively unregulated, the interruption in the supply of a minor component will be disruptive and relatively short-lived. In most cases, it could be a matter of weeks to redesign the component or have substitute suppliers step in for secondary supply. In the bio/pharmaceutical industry, however, the long-term interruption of a minor component could be catastrophic. Even a relatively minor excipient can cause changes in a product's characteristics, thereby requiring full preformulation analysis, stability testing, and testing of production batches. Add to that the supplier qualification and regulatory-filing requirements, and the production time lost can be considerable.

This lack of advanced planning by bio/pharmaceutical companies is surprising because the potential costs are so high. An extended period of lost production means lost sales and loss of market share to competitors that might never be regained.


blog comments powered by Disqus
LCGC E-mail Newsletters

Subscribe: Click to learn more about the newsletter
| Weekly
| Monthly
| Weekly

What role should the US government play in the current Ebola outbreak?
Finance development of drugs to treat/prevent disease.
Oversee medical treatment of patients in the US.
Provide treatment for patients globally.
All of the above.
No government involvement in patient treatment or drug development.
Finance development of drugs to treat/prevent disease.
Oversee medical treatment of patients in the US.
Provide treatment for patients globally.
All of the above.
No government involvement in patient treatment or drug development.
Jim Miller Outsourcing Outlook Jim MillerCMO Industry Thins Out
Cynthia Challener, PhD Ingredients Insider Cynthia ChallenerFluorination Remains Key Challenge in API Synthesis
Marilyn E. Morris Guest EditorialMarilyn E. MorrisBolstering Graduate Education and Research Programs
Jill Wechsler Regulatory Watch Jill Wechsler Biopharma Manufacturers Respond to Ebola Crisis
Sean Milmo European Regulatory WatchSean MilmoHarmonizing Marketing Approval of Generic Drugs in Europe
Seven Steps to Solving Tabletting and Tooling ProblemsStep 1: Clean
Legislators Urge Added Incentives for Ebola Drug Development
FDA Reorganization to Promote Drug Quality
FDA Readies Quality Metrics Measures
New FDA Team to Spur Modern Drug Manufacturing
Source: PTSM: Pharmaceutical Technology Sourcing and Management,
Click here