Ensuring compliance, strengthening resilience: Strategies for pharma supply chains

With people’s health and lives at stake, maintaining a resilient pharmaceutical supply chain to ensure the timely delivery of life-saving medication is critical. But as the sector rapidly grows and becomes increasingly interconnected, operational vulnerabilities arise, with compliance issues often looming large.

Over the past decade, the pharmaceutical industry has faced significant financial consequences due to non-compliance problems. Since 2010, the industry has had to pay more than $80 billion in fines across more than 500 cases of recorded violations. What’s more, last year the life sciences industry witnessed a staggering 72% surge in fine-related alerts globally, alongside a 38% increase in alerts concerning legal actions. This data comes from Resilinc’s AI monitoring system.

At the heart of many compliance issues lies adherence to Good Manufacturing Practices (GMPs), indicating the minimum standards that pharmaceutical manufacturers have to follow in their production processes. Every manufacturer operating within or selling to the EU market, regardless of their geographical location, must comply with these. GMP violations include issues such as insufficient quality control, inadequate documentation, and non-compliance with standard operating procedures, to name just a few. As a result, these can lead to product recalls, fines, shortages, reputational damage, and even bankruptcies.

Compliance with GMPs and other regulatory frameworks is an ever-present challenge that could be the next big threat to supply chains in the life science industry. To ensure compliance and proactively mitigate potential risks, organisations need to effectively implement due diligence and have full visibility across their entire supply chain.

Here are four ways to get started:

1. Map to build transparency

The first fundamental step towards an enhanced, transparent, and efficient supply chain is mapping. It provides a complete overview of the supply chain down multiple tiers and offers a comprehensive understanding of how all suppliers are linked. As much as 85% of supply disruptions originate with sub-tier suppliers, where many businesses don’t have visibility. This is why it’s critical to map out the entire supplier network beyond tier-one suppliers. Only then can pharmaceutical manufacturers pinpoint potential compliance risks and bottlenecks at each and every stage of the process.

2. Maintain visibility through proactive monitoring

Next, having gained insight into the entire supply chain, it’s crucial to detect other factors that may potentially disrupt supply continuity. Particularly when it comes to compliance, staying up to date with new regulations and legislation is key. Many companies invest in AI-powered monitoring tools designed to swiftly identify and flag events that can have an impact on operations. Reporting 24/7, such early warning systems provide real-time alerts and enable immediate reaction. This gives pharmaceutical companies a competitive advantage to secure supply when problems inevitably arise.

3. Conduct due diligence

Conducting due diligence on suppliers to identify risks of breaches in their supply chains and at their sites is another recommended practice. It should include carrying out regular risk assessments designed to ensure suppliers know the organisation’s foundational policies, code of conduct, requirements for doing business, and compliance.

By adopting this approach, pharmaceutical manufacturers can collaborate more effectively to promptly address non-compliance issues and avoid safety incidents, regulatory fines, lawsuits, and more. By fostering good relationships with partners, remedies to non-compliance can be effectively implemented before problems escalate. But should the risk prove too great, pharmaceutical companies also have the option to seek alternative suppliers.

4. Mitigate the impact

Despite having all precautions in place, some disruptions are unavoidable. This was clear during the COVID-19 pandemic, which caused widespread disruption to virtually every possible sector. Organisations need to have a business continuity plan (BCP) in place to be ready for similar situations. With any disruption in a pharmaceutical supply chain, it can be a matter of life and death, that’s why ensuring business continuity is mission-critical.

A BCP should include measures such as site readiness and recovery plans for operations, logistics, data management, personnel, backup power systems, safety procedures, and communication protocols. Regular testing and evaluation of the plan's effectiveness are just as important. Companies need to be able to turn to their backup plan to respond quickly, ensure continuity of operations and - ultimately - emerge from the crisis in good shape.

In today’s complex and pressured pharmaceutical industry, supply chain due diligence is a key component of any risk management strategy. By prioritising visibility and transparency throughout the supply chain, pharmaceutical businesses can safeguard operations and ensure an uninterrupted supply of vital medicines. Understanding all links in the supply chain, having real-time insights into new regulations, and leveraging the latest technology open the door to enhanced resilience and supply continuity.