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For fine chemicals in particular, the growing complexity of the compounds being developed as drug candidates has resulted in more complex production routes requiring more steps (that might be performed at different facilities) and greater numbers of raw materials, including specialized compounds. An increasing percentage of drug candidates are highly potent and/or niche products for the treatment of smaller patient populations and require smaller volumes, leading to an increase in the use of multi-product manufacturing facilities.

As a result, manufacturers find themselves dependent on a greater number of suppliers from varying locations around the world. Suppliers can in fact number in the hundreds and vary in size from small, specialized producers to large international chemical companies, each of which may have multiple production sites and their own supplier networks.1

Even small disruptions can have dramatic effects on such complex supply chains, and there are many potential causes of such disruptions.2 Geopolitical instability and natural disasters can interrupt production and/or distribution, thus affecting raw material availability. Variability in the quality of electronic chemicals can affect production yields and final product quality, safety and efficacy. Contamination of materials – accidentally or deliberately – is an additional significant concern.

Rapidly changing market trends can be a further factor. For instance, the decline in demand for raw materials used in larger quantities in other industries can lead to the reduced availability for pharmaceutical applications. Alternatively, sudden increases in demand for non-pharma applications could also lead to reduced availability to drug manufacturers.

The Upstream Supply Chain Security working group of the not-for-profit pharmaceutical and biotech industry consortium Rx-360 conducted a survey in August 2013 to identify issues of concern for the pharmaceutical industry regarding raw material supply chain security.3 The group found that nearly half of the respondents did not use supply-chain mapping (a tool for understanding the origins of pharmaceutical raw materials) for some or all of their materials or audit beyond their suppliers’ suppliers.

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