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A Golden Mine To Challenge Current Supplier Compliance Systems

Regulatory bodies have increased awareness about falsified drugs and subsequently worked out requirements to prevent falsified drugs entering the legal pharmaceutical supply chain. The basic idea is about KNOWING its supply chain. It appears simple, but it is not in reality.

How come that in one of the most regulated industries of the world, 100% of the stakeholders ignore their full supply chains? Numerous aspects explain this matter of fact.

The Value Chain

In general, downstream value chain is known and traceable since Pharmacovigilance has to be ensured. On the other hand, upstream value chain is far less mastered. Stakeholders know well their tier one suppliers and suppliers beyond become (almost) distant satellites.

There is one exception imposed by regulatory bodies regarding active pharmaceutical ingredients. That is the only supplied category for which a market authorization holder is requested to have in depth-knowledge. This means, focus and efforts are primarily targeted to this supplier category.

Companies put in place various processes and tools to ensure accurate Supplier Management Systems. These systems currently suffer from scattered information throughout IT systems, servers, MS Excel files, emails, papers, etc. Which in return means a clear lack of traceability, hence lack of access to information, hence lack of transparency and integrity of data.

Not only companies lose immense time (hidden costs at all levels of the upstream supply chain) on putting bits and pieces together when needed, but how is this acceptable in case of an inspection or worse, a drug recall?

Increasing Regulatory Requirements = Increased Costs

Knowing its supply chain comes down to reconcile the demand (sales) with purchasing, logistics, quality constrains and knowledge of underlying processes.

To respond to increasing regulatory and quality constraints which result in even more controls, information and documentation, Market Authorization holders and all upstream stakeholders (it is a chain after all) have increased human capabilities to adapt current processes to the increased constrains.

Yet, increased volumes of data combined with ongoing shifts in supply chain and existing siloes between various stakeholders result in gigantic inefficiencies, loss of information, errors.

Inestimable hidden costs inevitably occur.

Hence, how does this impact supplier risk assessment, patient safety and (non)sales?

Snippet of a certification process, as example

To approve a new raw material or supplier requires to:

  1. Map the supply chain stakeholders

  2. Collect supplier documentation

  3. Review the documentation against compliance re


  1. Conclude technical and/or quality agreements

  2. Do GMP audits of critical stakeholders

  3. Perform material and production testing and scale-up

  4. Negotiate supply terms

  5. Submit the supplier dossier to authorities

  6. Once the business is running, monitor overall supplier quality, logistic, commercial and compliance performance.

At least six of these steps are manual, and involve people from various departments, not mentioning if there are several production sites concerned.

Knowing that this applies to

  • each supplier of raw material

  • times the number of finished products concerned

  • times the number of people involved

  • times the inefficiencies due to errors, bottlenecks, lack of information, etc

One can easily imagine the vast room for improvement given the lack of digitization among these processes.

To Conclude

The pharmaceutical industry is clearly lagging behind in digitizing its supplier compliance processes and related data. It misses therefore significant opportunities to sell and to improve ongoing supplier assessments, which provide the basics for patient safety.

In times when supply chains and demand are being shifted, when production of drugs will likely shift even more to CMOs, will the awareness on these processes increase among Qualified Persons, CMOs, and MA-Holders?

Knowledge and connection to suppliers above tier 1 or 2 are key to unveil unprecedented compliance data and efficiencies.

Therefore, digitizing the supply chain data is a win-win-win for the industry, the regulatory bodies and the patients.

By Gaëlle Jaron,

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