Small CDMOs Can Save The Supply Chain

Small CDMOs Can Save The Supply Chain

small cdmos supply

According to the Harvard Business Review, the US Food and Drug Administration (FDA) currently lists shortages of 115 basic drugs. And the American Medical Association (AMA) considers drug shortages to be an urgent public health crisis. And an estimated 80% of the world’s APIs come from China, India, and a handful of other foreign countries. US dependence on these limited sources hit home when India imposed an export ban on medicines during the pandemic.

Fortunately, CDMOs can right the ship by deploying strategies that bring the supply chain back onto US shores, using component alternatives, and develop relationships with pharma/biopharma to bring their pre-COVID projects to clinical trials and commercialization.

Onshoring the Supply Chain

This is a massive global health challenge and given the transmission rates and frequency of new variants emerging it’s going to be around for a long time. Vaccination rates outside the US are woefully small – less than 1% which adds to the challenges ahead for the global community. There are 11 billion doses of vaccine needed outside the US. Pii has an opportunity to be part of that global supply chain to provide initial and booster vaccinations to millions of people.

Pii will onshore the pharmaceutical supply chain back to the US. It’s been moving east for over 40 years: Europe to India to China. The COVID pandemic has highlighted the need for governments across the globe, including the US, to re-evaluate the long, complex supply chains that were put in place to take cost out of the system. That strategy worked when the increasingly globalizing supply chain was serving near term profit demands in the retail and institutional distribution channels. However, with the rise of Populism globally and in the US, as well as, the democratization of healthcare in the US, the US Government has stepped in to provide grants, loans, and contracts to many healthcare businesses to build and revitalize infrastructure in the US. But when you talk about providing care to larger numbers of people, it’s a different motive than simply profit. In order to further democratize healthcare, infrastructure is needed onshore: accessible, modern, adaptable, flexible, and ready to perform here in the US.

Packaging Alternatives Address Component Supply

glass vialsThere are only a few major medical glass vial manufacturers in the world, which is leading to a glass shortage as we make our way through this pandemic. As a result, companies can consider glass alternatives. Choosing the correct container is crucial for the stability of the drug and the safety of the patient. Options include:

  • Polymeric materials such as cyclic olefin copolymer (COC).This combines glass and COC for greater formability, break resistance,  lightweight, glass-like transparency, strong barrier, and chemical compatibility. These systems are ideal for high-value, complex molecules. An example of this is the Crystal Zenith® CZ system.
  • A hybrid material consisting of a molded, engineered polymer and an inert glass-like barrier coating system, such as the SiO2®The inert glass-like barrier is chemically resistant, contaminant-free, and consistent surface irrespective of the container geometry or materials of construction.

Booster Shots Will Add Supply Chain Pressure

aseptic chainIt will put a lot more pressure on the supply chain, especially for components and ingredients. And when it comes to the fill-finish and testing for release of those products, there is more capacity coming online. Businesses need to make decisions to allocate capital to add fill-finish and testing capacity. While there isn’t enough right now, in two years there will be more online.

When it comes to ingredients and components (vials, stoppers, seals), there is a difference. For instance, when we talk about ingredients, supply chains will be stretched and far flung across the globe. They tend to be chemicals that go into a number of different products so bringing that capacity online is more expensive and takes longer. A lot of times companies are comfortable with demand outstripped supply because it brings pricing power. On the component side, those supply chains go to basic raw materials like petroleum and silica. Pricing is based on those fundamental raw materials.

But when it comes to glass vials, there are only a few industrial kilns in the world that make the glass stock as a feedstock for vials. This has created an opportunity for alternatives to enter the fray like hybrid materials. For example, companies like SiO2have a plastic vial but the inside is glass. So you need less glass and alleviates some of the supply chain challenges for components. Or ApiJect uses blow/fill/seal technology to make injection devices instead of relying on a glass syringe. West also has plastic vials and syringes.

So I think the pressures on the supply chain that have been highlighted with the pandemic, the US government has stepped in to fuel this innovation. So, like onshoring, these breakthroughs are things that I don’t think we would have gotten otherwise. Global interdependence on the supply chain has created value but a lot of sensitivity has been built into it and a lot of risk that folks weren’t willing to guard against. It was a risk they were willing to take.

The Supply Chain Post-COVID

Demystifying 3HPAPIOn the one hand, I would say it will be easy to fix. Bringing more capacity online is easy to do, relatively speaking. You know what is needed to have the current output in productivity. Getting more is either a question of continuous improvement or adding lines. The part that is much more difficult is making the decision to do it and all the things that go into that decision. Do business have the capital to do it? If they do, how does one project stack up against another to generate a return? Is the management team incentivized? And is the opportunity long lasting?

For us, we’ve seen a number of programs come to us where they were basically shelved. Their government supplier had a contract and were clear about where their priorities were. That’s just the nature of business. Those companies should have a risk management and supply continuity plan that, even if they are ok today shouldn’t assume they will be ok tomorrow. You need a strategy where you develop relationships with a network of smaller CDMOs that aren’t big players in the vaccine supply chain and they have capacity and capability at a scale that works for you.

Talk to a Pii Scientist


Pharmaceutics International, Inc. (Pii) is a US-based contract development and manufacturing organization (CDMO) located in Hunt Valley, Maryland. The experienced scientists, engineers, and staff at Pii pride themselves on adroitly employing a phase appropriate method of drug development for the prudent use of their customer’s resources as they solve challenging problems. In addition to offering end-to-end development services, Pii manufactures a variety of dosage forms to include complex parenteral drugs and has a wealth of analytical testing capabilities. Its Hunt Valley campus has four aseptic suites with lyophilization capabilities. Our talented professionals stand ready to help!

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