Second and Third Suppliers: Reduce Risk and Build Sustainable Operations
When it comes to Supplier Management, it is always better to have alternate suppliers for Active Pharmaceutical Ingredients (APIs), Key Starting Materials (KSMs), and Excipients. When evaluating alternative suppliers in the pharmaceutical supply chain, several key priorities are typically considered.
- Regulatory Compliance: Ensuring suppliers meet stringent quality standards and adhere to guidelines set by agencies like the FDA, EMA, and other relevant bodies is crucial for patient safety and market authorization. Ensure you learn about the regulatory history of the supplier ahead of time.
- Quality Assurance: A robust quality management system and consistent product quality are non-negotiable, as they directly impact the efficacy and safety of pharmaceuticals. Certificates of Analysis (CoAs) are required, as is testing for key attributes like quantity, identity and micro for every batch until known quality is established and then testing can be reduced to defined and justified intervals thereafter. Physically auditing the supplier facility can be required for key materials, APIs, etc. and paper audits are done at intervals. Notice of process changes, facility changes, and regulatory actions shall be disclosed in a quality agreement or manufacturing supply agreement. All of these considerations need to be documented in a Quality Manual that defines your controls.
- Reliability and Consistency: Assessing the supplier’s track record and regulatory history in terms of delivery performance, quality, production capacity, and their ability to manage supply disruptions helps ensure continuity. This means a strong 3rd party audit program and a robust Quality Agreement between supplier and purchaser are needed.
- Financial Stability: A financially sound supplier is more likely to invest in technology, maintain quality systems, and sustain operations during market fluctuations. Ensure research is done to evaluate longevity and ability and desire to innovate to meet additional demands of the US manufacturer.
- Scalability and Capacity: The ability to scale production to meet increasing demands or sudden market changes is essential, especially during times of high demand or emergency situations. Understanding the capacity of the supplier is necessary, but projecting volumes needed over a certain period is key. Communication to meet these expectations should be documented in a supplier agreement or contract.
- Risk Management: Evaluating geographic risks (such as political instability or natural disasters) and diversifying sources to mitigate over-reliance on a single supplier are key to reducing potential supply chain disruptions.
By prioritizing these factors, companies can build a more resilient and agile supply chain, ensuring that they are well-prepared to manage risks and maintain a steady flow of high-quality products. The Quality Agreement and Supply Agreements are good second steps, next to auditing, but they need to be specific, enforceable and clear for both parties.
CTA – QxP can support your diversification and redundancy of suppliers to ensure your medicine supply never fails you.
QxP Vice President Christine Feaster is a 20+ year veteran in pharma quality assurance. Prior to joining QxP, Christine was a vice president of U.S. Pharmacopeia.
