Joan Connolly, president of the Drug, Chemical, and Associated Technologies Association (DCAT) and principal at Connovan Consulting, examines the key issues affecting sourcing, procurement, and the pharmaceutical supply chain.
As the industry gathers this month for DCAT Week, an annual event featuring educational programs and networking opportunities for sourcing, procurement, and pharmaceutical supply-chain professionals organized by the Drug, Chemical, and Associated Technologies Association (DCAT), Patricia Van Arnum, executive editor of Pharmaceutical Technology and Pharmaceutical Technology Europe spoke with DCAT President Joan Connolly and principal at Connovan Consulting. Connolly became president of DCAT in November 2011 and discusses key industry trends affecting pharmaceutical companies and their suppliers and the association’s focus and activities for 2012. Also, for additional insight from Joan Connolly, listen to our editorial podcast.
PharmTech: In your capacity as DCAT president, the trends affecting the pharmaceutical/biopharmaceutical industry and supply-chain issues are of great importance to your member companies. What are most pressing issues affecting the pharmaceutical/biopharmaceutical industry as a whole and specifically for procurement/sourcing professionals?
Connolly: Our industry is facing significant change and constant pressure to do more, often with declining resources. A recent survey by PharmaIQ showed that 44% of employees in the pharmaceutical industry are concerned about layoffs, which may be a reasonable fear given the scale and frequency of layoff announcements in the industry. For procurement professionals, this often translates to demand for outsourcing more materials and activities as in-house resources are reduced or eliminated, but it can also increase the complexity of their role as they must now leverage external knowledge with less support from in-house technical experts. Of course, the quality and security of the drugs they support can never be compromised, so it is critical that sourcing professionals stay abreast of new regulatory developments and quality initiatives even while potentially managing a higher workload.
In addition to declining resources, the industry is struggling to improve R&D efficiency, both to increase the probability of success in delivering new therapeutic options to patients and to reduce the overall cost of developing these therapies. In today’s world, no organization can expect to have total knowledge within their own four walls and needs to leverage breakthrough technologies and intellectual capacity at external organizations, which could be around the block or around the globe. For the procurement professional, this can require a different level of engagement, in a role that facilitates open dialogue and true collaboration while still respecting the intellectual property of all involved.
Another challenge for the industry is the greater focus on pharmcoeconomics and how that is changing the way new products are evaluated and introduced to the market. Globally, governments and insurers are looking for a much greater return for their healthcare dollar, and this situation is translating to a greater emphasis on patient-targeting tools or personalized medicine. In addition to generating broad safety and efficacy data during clinical evaluations, our member companies are becoming more focused on companion diagnostics that can be approved prior to or in conjunction with a new therapy, so that physicians are able to more accurately select which patient will respond to which drug. While this can translate into a smaller market/lower demand for an individual new drug, there is a significant benefit for patients to limit exposure to drugs that would not be expected to work for their genotype. Because of an enhanced efficacy rate for patients with the correct genetic marker(s), I believe we will see more ‘kit’ launches in the future, where the companion diagnostic becomes an integral part of a successful product launch. While this challenge can be daunting from a sourcing and logistics perspective, the patient benefit is significant, so as an industry, we must deliver innovation for better health solutions as opposed to just better medicines.
PharmTech: Supply-chain security and product integrity are obviously key issues for sourcing, procurement and supply-chain professionals. What specific challenges do you think sourcing and procurement professionals are facing in this area, particularly in the sourcing of raw materials and other ingredients in the pharmaceutical supply chain? What would you identify as key initiatives/programs on an industry level that are helping to resolve some of these challenges?
Connolly: Sourcing and procurement professionals are always challenged to balance risk and reward, and that includes a clear understanding of the security of their supply chain. I think a key to this is simply knowing your supplier and not just relying on remote communications and document review, but physically seeing the manufacturing site and building a relationship with your supplier as a true business partner. In an era of compressed timelines and reduced travel budgets, it can be easy to forego a trip to a remote manufacturing location, but I think it is a mistake to select a manufacturer, regardless of a perceived cost advantage, if you are not prepared to put in the time and miles to foster a real understanding of its supply position and the overall value, including security, of its offering.
Of course, even with the best knowledge of our suppliers, there is still a need for ongoing oversight of the supply chain itself to ensure that adulterated components can be identified and eliminated prior to use in downstream manufacturing and that misbranded products do not enter legitimate distribution chains outside of our control. The efforts of industry consortia, such as RX-360, can be instrumental in identifying vulnerable supply points, and growing collaboration between health authorities (such as he Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme [PIC/S], which FDA recently joined) also help by developing common global standards for auditing that will allow for more information-sharing between agencies, who are dealing with their own resource constraints. Track-and-trace technologies also are evolving, and while not a cure-all, can be an important tool to enhance supply chain security. DCAT is delighted to be hosting Thomas Christl, the new leader of the Office of Supply Chain Security from FDA, to our Supply Chain Security program during DCAT Week. Lt. Christl will highlight specific agency recommendations and requirements, and we hope the program will foster dialogue between FDA and our member companies to jointly address supply-chain risks. The discussion will then continue at DCAT’s annual Sourcing Summit in July, where a panel of industry experts will share their concerns and evolving solutions to secure the pharmaceutical supply chain. This is another area of significant challenge for our industry, but the public-health risk demands that we work together and in partnership with regulatory authorities to ensure that patients can trust in the quality and integrity of the drugs we provide.
PharmTech: What would you identify as key accomplishments for DCAT in 2011 in terms of member services, member activities, educational programs, and membership enlargement? How many new member companies did the association add in 2011?
DCAT added 48 new member companies in 2011, and we continue to grow with an additional 65 new member companies having joined in 2012. We also increased participation levels at many DCAT educational and networking events in 2011 despite ongoing industry consolidation and continuing challenges in the broad economy. DCAT events offer a unique opportunity for our members to establish new connections and build on existing relationships to drive their business forward in a highly efficient and controlled environment, and we believe that the rising participation levels at these events are the best evidence that they represent a valuable service offering to our members.
We also continue to grow the DCAT Week attendance and engagement levels every year, and last year welcomed 1750 guests to our annual ainner at the Waldorf-Astoria. Because so many of our members now stay in New York for essentially the full week, we added a new members reception earlier in the week that generated a great response last year, and we are expecting even greater participation this year. A new DCAT Week mobile app was launched in 2011 to assist our members in getting the most out of the week both in terms of participating in the many educational programs and in helping to facilitate direct member-to-member interaction. The feedback was terrific, so we hope to build on the success of the app by broadening our virtual presence and should be able to share some of those developments in the months ahead.
The organization also is are very interested in supporting science-education initiatives to help build the next generation of scientists and engineers that will drive our industry forward. To further this goal, last year we partnered with the National Lab Network, enabling our members to support the Goggles & Gloves campaign with donations of safety equipment to more than 100 high school classrooms.This program enables higher levels of participation in the hands-on experimentation that we hope will ignite more interest in the study of science and engineering at the university level. We also provided grants to high school science teachers who were recognized by their peers at the National Science Teacher’s Association (NSTA) as developing truly innovative and exciting approaches to science learning. The NSTA grants are supported by member fundraising through an annual charity golf tournament—last year held at the fantastic Jasna Polana course in Princeton.So in addition to supporting a great cause, it was a great time for all attendees.
PharmTech: Looking ahead to 2012, can you outline the association’s key goals and related activities to serve those goals?
Connolly: The purpose of the DCAT organization is to facilitate business development and foster learning among our member community. While we always see tremendous member engagement and participation during DCAT Week itself, our direct interaction with membership can wane somewhat outside of that event. We often find that our members would like to continue their discussions around topics raised during our educational programs, but simply run out of time during the event itself. A key strategic initiative for 2012 is to help harness the energy of our members and provide greater interaction outside of DCAT Week and our other “live” events and programs. To that end, we are evaluating tools to allow broader collaboration throughout the year and to foster ongoing dialogue on some of the key discussion topics broached during our “in person” events. We hope to have more information to share with our members in the coming months.
DCAT is a very special brand. We strive to offer a premier experience, but as a not-for-profit organization, we are also always cognizant of spending our membership dollars wisely and targeting our education investments in areas of strategic importance to member companies. We are very fortunate to have a strong cadre of industry volunteers on our standing Education Committee and Supply Management Committee and can also draw on the collective knowledge of our board of directors and other key association supporters whose industry knowledge and experience helps us deliver exceptional programming. So another of our key initiatives for 2012 is to ensure we leverage that deep industry knowledge to focus our programming in areas that will be most impactful to our members’ businesses. Many of our educational programs this year are focused directly on the key challenges our member companies are facing and which we earlier discussed. And many of our members are participating directly in the programming, so they have an intimate understanding of the challenges and are able to share real-life strategies and solutions in a way that is often not found in ‘for profit’ educational programs.
Of course, we always look for ways to expand our membership as well, to broaden the network of suppliers and buyers within our association. While DCAT has long been engaged with traditional pharmaceutical companies and suppliers and has grown our network within the biopharmaceutical space in recent years, we recognize that many of the newer virtual pharmaceutical companies may not be aware of the benefits of DCAT membership. For companies who do not want to build their own manufacturing capacity, DCAT offers the perfect platform to identify and connect with potential manufacturing partners, and we will be looking for ways to expand our reach to this segment of the industry in the coming years.
PharmTech: Can you explain the organizational structure of DCAT, related committees and their functions, and how they advance the goals of the organization?
Connolly: DCAT is a member-supported and member-run organization, meaning that our leadership is elected by all of our member companies, and that all members of the Executive Committee are employees of member companies.We also attempt to provide balance on the Executive to ensure that companies from both the buy and sell side of the industry and the generic and brand side of the business are represented. This helps us ensure that our leadership is able to represent the needs of all our member companies. This leadership team sets the strategy and priorities for the organization and is also responsible for overseeing the organizations finances. Fortunately, we are blessed with a highly capable Executive Director, in Margaret Timony, and a small but strong staff, who manage the organization on a day-to-day basis and always deliver such exceptional quality in our events.
We also have a very committed group of volunteers who support the execution of DCAT strategy and initiatives by participating in standing and ad hoc committees.Standing committees include the following:
• The Education Committee focuses on identifying the educational needs of our members and delivering excellent educational programs to address those needs.
• The Membership Committee reaches out to qualified companies within the biopharmaceutical industry to encourage and support their application for membership.
• The Member Services Committee helps to assess the needs of our members and deliver programs or tools to address those needs, to enhance the DCAT value proposition, and to encourage member recruitment and retention.
• The Science Education Scholarship Committee identifies the needs of today’s students and educators in the sciences and provides assistance through a variety of organizational projects, grants, and member support.
• The Scholarship Funding Committee is responsible for organizing, promoting, and growing participation in events that increase awareness of and generate funds for DCAT Scholarship initiatives.
• The Supply Management Committee, made of up volunteers from the buy-side of our member community and who deliver the Sourcing Summit program every year, specifically addresses sourcing challenges and trends.
PharmTech: Would you like to explain the educational programming at DCAT Week this year, which is being held Mar. 12 to 15?
Connolly: Our programs are very diverse, and are meant to offer valuable and timely educational content as well as provide an opportunity for our members to interact with and brainstorm with their peers in the industry. Our Education Committee delivers most of the programming during DCAT week and selects topics based on key trends and issues in the industry, including some of those earlier discussed. We also will accept proposals from members who want to take advantage of the critical mass of thought leaders who attend DCAT week to address issues that have broad impact across the industry. Such was the case this year with the Supply Chain Security program, driven largely by Marty van Trieste of Amgen.
For a detailed view of the programs on offer, I would suggest that your readers go to our website, www.dcat.org but at a high level, in addition to the Supply Chain Security program mentioned above, the topics include:
• Successfully Partnering Pharmaceutical Manufacturing Throughout the Product Lifecycle, which is focused on the impact manufacturing can have on licensing valuation and success at different stages of development
• DCAT’s 2012 Pharmaceutical Outlook, which this year is focused on orphan drugs and niche products and their specific challenges for manufacturing and launch
• Excipient Supply—Managing the Cost Without Impacting the Quality, which is an area of increasing focus across the industry, particularly with recent incidents around drug safety that have related directly to excipient inputs
• High-Potency Manufacturing Technologies to Support Today’s Innovative Pharmaceuticals, which will review some of the technologies available to support manufacture of new targeted therapies
• Generic Drug User Fees Act: Government and Industry Perspectives, which will discuss implications of the new pay-to-play system for both generics companies and their suppliers
• Biologics Forum Understanding the Practical Complexity of the Biopharmaceutical Landscape, which will discuss investment drivers in the biologics-based drug industry and the latest on the regulatory pathway for biosimilars.
In conclusion, we talked a lot about the challenges that the industry faces, so I would just like to end by saying that despite these challenges, I wouldn’t want to work in any other industry. We come to work every day to help solve critical health challenges, and the therapies we develop, manufacture, and distribute really impact and improve the lives of patients. While there remains much to be done, I am confident that my colleagues in the industry are up to the challenge, and will continue to deliver innovations that improve and extend people’s lives. I will look forward to seeing many of them at the upcoming DCAT Week—where business gets done.
For additional insight from Joan Connolly, listen to our editorial podcast.