Globalization in the pharma and biopharma industry has contributed to an increasingly complex supply chain fraught with numerous challenges. And, outsourcing to emerging markets of India and China, for example, have led to increased regulatory scrutiny following numerous incidents of contaminated raw materials. Since then, APIs sourced from these, and other countries, have been subject to increased testing and regulatory inspections. Today, concerns about the supply chain and drug quality persist.
 
PCI Synthesis, a manufacturer of new chemical entities (NCEs), generic active pharmaceutical ingredients (APIs), and other specialty chemical products, based in the greater Boston area, provides a domestic perspective.Contract Pharma spoke with Ed Price, the company’s president and chief executive officer, to discuss the latest API sourcing trends, regulatory and supply chain hurdles, and quality concerns. -KB
 
Contract Pharma: What trends are you seeing with respect to API sourcing?
 
Ed Price: Increasingly we see companies less interested in outsourcing to places like China and India. Companies that hoped to save their way to success have discovered they can save money overseas but they can’t guarantee they will get the right results. The FDA has heightened its level of regulatory scrutiny, holding overseas manufacturers to the same standards as those enforced in the U.S. But that will take time.
 
Meanwhile, time zone hurdles, delivery timetables, occasional language barriers and the like, just make it more difficult for these companies to outsource overseas. By turning to a local manufacturer, they have the ability to forge a personal relationship, their issues can be addressed quickly, and they have the opportunity to closely monitor the quality of manufacturing on a continuous basis.

CP: What types of product do you see an increased demand for? 

EP: There is a steady demand for the manufacture of active ingredients, which is great for companies like PCI Synthesis, which specializes in this area. We also see a steady flow of new opportunities from smaller, virtual companies.
 
CP: What are some of the main challenges clients approach PCI with?
 
EP: Many clients who approach us have come to realize that their technology is not as advanced as they thought it was for clinical development. They are surprised at the level of investment, time and resources needed to get ready.
 
CP: As a domestic supplier, how have continued challenges with India and China impacted your business?
 
EP: Drugs or raw ingredients that come from overseas and found to be subpar hurt the entire industry. American consumers need to have faith that the medicines they are taking or giving to their children are of high quality and at the dosage their doctors’ recommend. 
 
We’ve heard horror stories from our clients about their experiences overseas. Many of them have learned that lesson the hard way. When they work with us, we see first-hand how our culture, project management and quality products have a positive impact on them, their business and our business. As their contract manufacturer, we continually evaluate what we need to do to help our clients most effectively, independent of where they have been or where they might go in the future.
 
CP: What do you anticipate in the near term as far as any progress in these regions? 
 
EP: The FDA’s site inspections and increased scrutiny, coupled with oversees manufacturers’ improved adherence and compliance to the FDA’s regulations, will ultimately help the industry and the American public. But it is a slow road to travel, and it will be patchwork progress for a long while.
 
CP: What are the major supply chain hurdles experienced today? How can they be overcome?
 
EP: There is definitely a seasonal angle to supply chain hurdles. As all of us in the Northeast can probably tell you, the historic winter of 2015 impacted the supply chain in ways we had not seen before. Delivery delays were felt at every point in the supply chain. For PCI, for example, that translated in delays in raw materials that fortunately we were able to address in our production schedules. We were able to continue to deliver the high quality active ingredients and excellent service our clients expect of us because we were on top of the situation and communicated regularly and immediately with our clients. But the weather-induced delays wreaked havoc for other vendors, and for many it was a real struggle.
 
Even when a hurdle is not tied to bad weather, delivery date slippage is a very real concern, particularly when the goods are coming from overseas. It takes a lot more work to manage those delivery delays when dealing with overseas suppliers; you don’t always get to the root of the real cause of the delays. Whether it is corruption, bad business models, inexperienced staff or something else, delays from overseas suppliers are just more challenging to deal with than delays you may find from U.S. suppliers.
 
CP: How do you avoid interruptions, unexpected expenses, and quality control issues?
 
EP: Every CMO can make its case on paper; but it is in the finer things – the day-to-day details – where a CMO really shows its value. We find that the project manager not only has to excel at delivering “the goods” but also has to ensure expectations are met and communication is effective and timely throughout the project lifecycle. Transparency, predictability and even chemistry all play a part in it. It’s important to always have a plan and a backup plan to avoid delays and interruptions, but more importantly, to keep customers in the loop at every stage, and have solid recommendations for any hurdles that we face. 
 
CP: How do you help clients navigate increased legal and regulatory hurdles?
 
EP: Staying on top of details is important in this business. But with increased competition, global outsourcing, higher levels of compliance and increasing regulation, those details are more complex than ever in this industry. You have to stay on top of what is coming down from the FDA, but also act immediately rather than defer until a later date. Also, it’s imperative to have ongoing, effective communication with our clients. We advise them on what the FDA is looking for and steer them in the right direction using our experience and best practices. The whole industry is very dynamic, and every company needs to be closely in tune to respond appropriately.
 
 
Edward S. Price is a founding member of the New England CRO/CMO Council and the president of PCI, a 16-year-old custom chemical manufacturer of new chemical entities (NCEs), generic active pharmaceutical ingredients (APIs), and other specialty chemical products. He can be reached at Ed.Price@pcisynthesis.com.

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Kristin Brooks has been associate editor at Contract Pharma since 2004.