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Fill-Finish Podcast 3 – “Global Supply Chain Management and Capacity Planning”

Participants

  • Guest: Omair Ahmed, Chief Strategy Officer, Nexus Pharmaceuticals
  • Hosted by: Rizwan Chaudhrey


Rizwan Chaudhrey:
Hi everybody, this is Rizwan Chaudhrey, and you are listening to the Fill-Finish Podcast sponsored by ApiJect, the show that shares expertise in all aspects of injectables vaccines and aseptic fill-finish.

Rizwan Chaudhrey: Today I’m delighted to be joined by Omair Ahmed, who is Chief Strategy Officer at Nexus Pharmaceuticals and today the topic is Global Supply Chain Management and Capacity Planning. So Omair, it’s nice to meet you, how are you?

Omair Ahmed: Thank you, Rizwan, It’s a pleasure to be on. How are you?

Rizwan Chaudhrey: I’m very well, thank you very much. Now, before we start talking about global supply chain management, which is obviously a huge topic at the moment. Would you mind giving listeners a quick overview about yourself and the company?

Omair Ahmed: Sure, sure. So Nexus Pharmaceuticals was founded in 2003. We are a specialty generic and injectable company, that’s our specialization. We really try to work on first to market generics, as well as innovative products to improve hospital slow and just tried to be a pillar overall in the injectable hospital market space. We’ve recently expanded quite a bit. Most notably an aseptic fill-finish facility in Pleasant Prairie, Wisconsin with the capability to do vials, pre-filled syringes, and other dosage forms as well as lyophilization capabilities, which we see is very important globally. So, we’re really excited to bring that online mine. It’s been a project about four years in the making, but it’s been a great journey for us.

Rizwan Chaudhrey: Okay, thank you for sharing that with me sees a big question is sort of straightaway. What can we expect in the future, regarding outsourced pharmaceutical manufacturers? We’re not going to start with a little question, were going to start with a big question straight away.

Omair Ahmed: You know, I mean it’s the questions on everyone’s mind. There’s not probably a company in the global marketplace that is not using outsource pharma in one way, shape or form. We continue to see utilization be compressed as more and more big pharma traditional players have spun off sites and now those have become standalone outsource whether it is fill-finish or packaging or what have you. So, I think the biggest thing that everybody knows, was the COVID vaccine and as that continues to use up a lot of the supply both on fill-finish, as well as containers. I imagine for probably at least the next two years will continue to face an uphill battle, both from a supply chain product side as well as overall capacity. There’s a lot of new projects going on around the world, but, as everybody knows, it does take time, not only to construct, but also to get regulatory approval. So, I think we’ll continue to see headwinds as we reach through 2022 into 2023. We’re bringing on capacity, other folks are bringing on capacity, so we think there’s a light at the end of the tunnel. But again, that’s just assumes that there’s not the next virus or another variant that can, at any time, put a big stranglehold on what’s available for pharma in general right.

Rizwan Chaudhrey: So, why is the consumer demand pushing for more syringes?

Omair Ahmed: A lot of what we’ve seen is due to the labor shortage, especially here in North America there’s a huge, very well-known problem in the healthcare sector. Just not enough labor whether it’s nurses, pharmacists, pharmacy techs. We’ve seen this push by large hospital systems to improve patient flow by basically taking the human out of it. If we can deliver ready to use products so nurses and pharmacists don’t have to spend time formulating, drawing up, that’s really what they’re looking for. Although usually these products have a higher price tag, it’s more than made up for it and the reduced labor as well as allocating labor and other ways to not necessarily the delivery and we saw both with the vaccine, as well as just products in general. Once you bring it in a ready to syringe form it’s so much easier to administer. So, although patient adherence isn’t as big of an issue sometimes, syringe definitely acknowledges that part, as well as just improving hospital slow in general. So, a lot of customers are asking what’s the next product we can get in a prefilled syringe.

Rizwan Chaudhrey: And you mentioned the pandemic there. So, what issues came out from the COVID-19 pandemic and what could we have learned from that?

Omair Ahmed: We weren’t ready. That’s probably the number one issue. You can see, I don’t think in our lifetime we’ve never seen anything like it. And I think we took a lot for granted as a society in general that medication always be there, but we were already running pretty thin. Capacity worldwide was expanding, but so is our population, so is demand. Especially as you see, as the developing countries, the demand for higher levels of healthcare was rising quite a bit so while Western Europe or the US, North America was relying on more outsourced pharma. Whether it’s India or China, they themselves have an increasing burden on that. So now, on top of that, you had a pandemic which there was not necessarily a globally organized effort. I know WHO tried, but there’s a lot of different companies out there, working in different governments, to be quite frank, and a big push for reshoring that manufacturing is part of national security. We saw that those don’t necessarily align with a global approach to ensuring that there’s pharmaceuticals available. So that kind of, I won’t call it misshapen, but kind of an individualistic approach didn’t help the industry overall because pharma is such a globalized industry. So, just because we say we have created a fill-finish facility here in the US, well, a lot of those components are coming from Germany. But Germany wants the filling lines for themselves, so it just became this kind of push and pull globally, that really, I think hampered the response. I think if we would have utilized capabilities or better cross functionally, we could have not had those initial issues which was not enough vaccine for everybody. I think we really could have addressed that if there was a more comprehensive approach, which I know is hard during a pandemic, but maybe that’s a lesson learned.

Rizwan Chaudhrey: Talking about lessons learned, what else do you think we could have learned from the pandemic?

Omair Ahmed: That the components are a big issue. Whether it’s stoppers, filling bags, vials, syringes, those kinds of lowest common denominators became our biggest issue. We had more than enough viral- vector we just didn’t have a place to fill it and just available capacity, there’s almost no idle time. To run an aseptic facility, you have to keep it on 24/7, so in that sense, almost everybody running a fill-finish facility wants to keep it busy. When you don’t have any lag, when the government hasn’t necessarily put in, we’ll call it a layaway time that’s available to them, you get into these issues because you can start moving other batches but those are also critical drugs. So, understanding that having an aseptic fill-finish line time itself is a resource, and paying for that resource, on top of trying to strengthen both syringe, vials, stoppers, tries to really strengthen the bottom line of container closure is really necessary to ensure that we can appropriately respond as quickly as possible.

Rizwan Chaudhrey: How adequate is the software out there to help you to sort of maintain the flow of the components and do the manufacturing and making sure you are utilizing the time well?

Omair Ahmed: There’s definitely no shortage of available software. It’s out there. I think what the shortage is sometimes a will to change how things are being used right now. A lot of times, especially during a pandemic, it’s okay how do we just do this fast? We don’t invest necessarily in the system, because the systems sometimes are meant to be changed on a dime, but I think there’s also a global issue of we have the systems in place, but are we using them for full capability? Are we fully automated? How we are approaching it. Some of the larger companies yeah that’s true but it’s usually for legacy products that have been being made for a long time to even established a good system. Are you able to utilize the software at the turn of a dime. right? When we’re creating new products, whether it’s an ERP system or quality management system or an overall scada system for a facility that can run automatically. Are we able to implement those changes quickly as possible? Knowing that IT itself is a resource and they have a day job. Can we bring them in to update these systems and utilize their full capability?

Rizwan Chaudhrey: How is the pharmaceutical supply chain evolving and what changes can we expect going forward?

Omair Ahmed: I think reshoring is probably the biggest word that everybody is talking about. I think every country that has the means is trying to bolster domestic manufacturing because they don’t necessarily want to be beholden to any other country when it comes to scarce supplies. I.e., vaccines. So that has been the biggest push. That will continue to be whether it’s signing agreements to make syringes and vials, just the glassware, whether it’s fill-finish capability, or whether it’s starting material. I think that’s what you’re going to see a lot of government investment to ensure that there’s enough resource available to not be beholden. The biggest issue right now has spent the better part of two decades offshoring a lot of this production, and now at the turn of a dime we will re-shore it, which can be very difficult, because we’ve come to rely on the global supply chain. But that’s the biggest difference, I think you’ll see is a lot more capacity coming up domestically in the developed world. While the developing nations, especially India and China, continue to expand domestic manufacturing, you’ll definitely see and it just a question of how long people will remember as well. it usually takes five years to put up a facility. So, five years from now, when we hopefully have forgotten about coronavirus will people continue on with that investment or will you just see a bunch of mothballed facilities. Then all of a sudden when there’s the next pandemic, people are trying to restart them. So, that vision is going to be interesting to see because of the allure of foreign, many times inexpensive, pharma resources. That we can be very alluring so it’s going to be interesting to see how that continues on.

Rizwan Chaudhrey: Leaving off from that load, does that mean, though, that they will be different types of facilities being built for the future to reflect that, though, so that your investment isn’t maybe so huge in the first place, or is more adaptable to change which progress in the future.

Omair Ahmed: I think, as we get more technology focused, I think we’ve seen the success of viral vector and we can continue see expansion there on that availability, as well as different filling technology . Those sorts of avenues, and that technology, I think you’ll definitely see a ramp up because they’ve shown their value over this pandemic, because the faster you get the product to the people, the better off we are. So, I think we’ll continue to see expansion on those kinds of technologies that (A) require less human labor and (B) are actually safer for the patient. That’s really going to push. I think you’ll see some facilities changing, and I know the US Government has invested a lot In some of the domestic facilities, but I think there’ll be more technology being used, which is a good thing, because a lot of the aseptic facilities we’ve seen were unchanged for 20 years because it worked or wasn’t broken don’t fix it, but I think now we have that push to really improve and create more efficiencies throughout the supply chain.

Rizwan Chaudhrey: My final question is what risks exist today within a globalized fill-finish environment?

Omair Ahmed: As we sit here right now and there’s so much turmoil in Europe. There’s definitely that added supply chain risk that you won’t be able to get supplies in time, because we know we’re a very time sensitive overall industry. If you don’t have one starting point, you can’t do anything and sometimes you need to make the starting material, get it to the fill-finish facility. It’s a much longer timeline than people, I think, give it credit for. So, the risks are we can’t continue to do business as we know we can’t rely on any country or any two countries. We need to diversify, because we have no idea what might happen there. A shut down in India, for example, they stopped the export of starting materials, so if we’re not getting them from India, where are we going to get them from. I think the biggest risk exists is that are we going to have that sense of urgency, two or three years down the line? When really some of the big bills are due and we really have to assess society. Do we want to continue to invest in pandemic preparedness and, generally speaking, a strong domestic supply chain for fill-finish? I think that’s going to be the biggest risk because people will forget about it and then will fall into our own way old ways and not really see that change and they’re putting a lot of the onus is on industry, for example. Whether it’s on the container closure side or fill-finish. The private companies are the ones that are actually pushing a lot of this forward so if there’s a big profit incentive, or if there’s not a big profit incentive, will you continue to see that, and I think those are the biggest risk, as we try to do globalize a little bit, or at least re-shore a lot of these capabilities.

Rizwan Chaudhrey: And I said that was the last question where you just made me think one other question. We’ve talked about the risk, but what are the opportunities then within a globalized fill-finish environment? What opportunities do you see out there?

Omair Ahmed: I think there’s definitely opportunities to be had, especially from a quality standpoint. Generally speaking, the new facilities are being built or just have a higher quality and consumers are becoming more educated, whether it’s the hospital system, whether it’s governments, regulatory bodies, they are becoming more and more interested in how the product is being made. Just because it’s being made this way for 15 years doesn’t necessarily mean that was the right way to do it. So I think there’s a lot of opportunities for those organizations that really embrace the new technology and trying to push forward and, overall, in most of the Western world, there’s a huge labor shortage. Those companies that are able to get more automated whether it’s continuous manufacturing or in line robotics or things of that nature, I think those are the ones that are going to succeed and able to keep up with the global economy. I think that’s really the opportunity you see there because, whether it’s China or India or even Africa, I think the Western world can start to become more of an exporter of products as cost of goods start to go down and we embrace more efficient packaging and processing versus kind of how we’ve been doing it in the past.

Rizwan Chaudhrey: Omair, thank you very much for your time today. That’s really interesting. If you want to know more about Nexus Pharmaceuticals, where can they go and get more information?

Omair Ahmed: Go to our website www.nexuspharma.net and you can learn all about what our investments are for the future and kind of globally, where we think the markets headed.

Rizwan Chaudhrey: There you go listeners; I hope you found that interesting, I certainly did. And you can learn more about fill-finish and other topics by visiting the podcast website which is fillfinishpodcast.com, Thank you for listening, and until next time, stay well. Bye bye.


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