Life Science Leader Magazine

MAR 2015

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LIFESCIENCELEADER.COM 45 MARCH 2015 goals and measurements before engaging suppliers. CATALYSTS: FDASIA, AND AN OIL SHOCK? Xavier Health hosts two annual confer- ences: PharmaLink for biopharma and MedCon for medical device. Discussions at both identified the need for the Integrity of Supply Initiative. Lowndes of Shire sits on the governing board. "The overall initial driver and why I got personally interested was because of FDASIA [Food and Drug Administration Safety and Innovation Act of 2012]. Embarrassingly for our industry, the FDA has legislated for us to pay more attention to our own supply chains," he says. He adds, "It was important when the FDA came out with a clear message regarding what they saw as the issues, and their desire to work with us. I think back to the PharmaLink conference when we talked about why FDASIA was being put in place, specifically Title 7 for the safety and quality of supply and Title 10 for drug shortages." Both Lowndes and Phillips bring up another seminal scene that unfolded dur- ing a 2014 meeting of Initiative leaders. Norman McLennan, VP of supply chain at Sasol Petroleum International (U.K.), presented on his industry's best practices for working with suppliers. "He brought the whole upside-down nature of the way we look at our suppli- ers to light," Lowndes explains. "Here's oil and gas saying they treat their suppliers as if they are dependent upon them and need to look after them. Meanwhile, we often behave as though the opposite is true, as if they should be glad to have us as customers even while we are depen- dent on their performances to meet the profound needs of our patients." READY FOR A NEW ATTITUDEā€¦ AND MODEL? Lowndes presides over a fully outsourced supply chain for some Shire products. PharmaLink was a vehicle to interface with the FDA and fellow biopharma compa- nies, and a way to share best practices. He also wants to change the entire supplier- manufacturer business model. According to Lowndes, the current model was created by "Big Pharma mov- ing late life cycle products out of their plants to make space and harvest as much residual value as possible. The process is frequently led by a part of a procurement organization. CMOs get negotiated down to small margins for large quantities." Unfortunately, this leads to a need to standardize production and relationships to drive efficiency. It might have worked in the past with high-volume products, but with the increasing demand for specialty

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