Top Consideration for Onshoring Pharmaceutical Manufacturing: Find the Right CMO


The Covid-19 pandemic pulled the curtain back and showed the American people the pharmaceutical supply chain's vulnerabilities, highlighting the U.S' dependency on China and other countries. Over the last few decades, drug manufacturers have been gradually moving production offshore, but policymakers and others are examining the need to bring manufacturing back to the U.S. When drug and API manufacturers decide to make the onshoring shift, they should be prepared with a well-designed quality system and a thorough tech transfer process. Partnering with the right CMO will ensure a smoother transfer.

Dependency on Overseas Manufacturing Creates Vulnerabilities

Even before the pandemic hit U.S. soil, the U.S. government was aware of the dangers globalization may create for the pharmaceutical industry.  In October 2019, Janet Woodcock, M.D., Director of the Center for Drug Evaluation and Research (CDER) at the Food and Drug Administration (FDA), provided congressional testimony stating that 72 percent of the API manufacturers supplying the U.S. market were overseas; with 13 percent being in China. She referred to FDA data that showed the number of registered facilities making APIs in China more than doubled between 2010 and 2019.

She also testified that the pharmaceutical sector relies heavily on foreign sourcing for critical components, materials, and finished products, creating vulnerabilities in the U.S. Supply Chain. For example, the CDER maintains a catalog of all facilities that make drugs for the U.S. market. However, there are limitations to the information collected, such as not being able to calculate the volume of APIs being used for U.S.-marketed drugs from China or India and what percentage of U.S. drug consumption this represents.

U.S. Pharma Manufacturers Reach Highest Capacity Since 2015

Once the pandemic hit, U.S suppliers ramped up production. According to a U.S. International Trade Commission report, "U.S. manufacturers responded to the pandemic by substantially increasing pharmaceutical shipments. Domestic shipments of pharmaceuticals reached $221 billion during January–September 2020, up 11 percent from the same period in 2019, and capacity utilization at domestic plants reached 87 percent in the second quarter of 2020 (higher than any other time during January 2015–June 2020)."

The same report stated that U.S. pharmaceutical imports from China increased 46 percent by volume from January–September 2020 compared to the same period in 2019. 

Ensuring the pharmaceutical supply chain's integrity has been at the forefront for both the previous and current administrations. Former President Donald Trump signed an executive order (E.O.) in August 2020 to ensure essential medicines are made in the United States. In January 2021, President Joe Biden signed a Buy American E.O. This rolled back many of Trump's E.O.s but left in place his E.O. Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the U.S. President Biden's E.O. further called for a review of the pharmaceutical and API supply chains to identify and provide recommendations to address risks.

Given the supply chain struggles seen in the past year, it is predicted that onshoring investments will increase. A pre-election survey by E.Y. of 500 C-level executives revealed that if the focus on onshoring continues, 64% would consider acquiring or building more domestic production.

Critical Considerations for Onshoring Tech Transfer

Transferring pharmaceutical production from overseas to the U.S. is not without its challenges. Realizing product and process consistency from site to site is not guaranteed. Concerns arise over possible supply interruptions, program delays, unexpected costs, or regulatory implications as production sites are filed. 

One way to ensure a smooth transition is to partner with a contract manufacturing organization (CMOs) with a proven track record across the entire drug development and manufacturing continuum.  If realistic expectations are established from the outset, potential challenges can be identified and addressed early on to ensure tech transfer runs smoothly. Some things to consider when choosing a partner for tech transfer are:

  • Your goals for tech transfer – By identifying your goals, such as uninterrupted supply chain or logistics simplification, you will be able to choose a partner that has experience helping companies meet those goals by identifying challenges and offering advice for a smooth transfer.
  • Challenges – Understand if they have the scientific and technical know-how to resolve any problematic production steps, such as what methods they use to understand critical process parameters to reduce variations. They should also have a comprehensive equipment train to ensure the right tools are used.
  • Approaches for success – Your chosen partner should have robust analytical capabilities and cutting-edge technologies, such as modeling and simulation tools, to build confidence and uncover areas of change during tech transfer. 

If your CMOs quality system is designed with a global scope that incorporates guidelines from all relevant markets, they will have established a baseline for quality assurance that creates a smoother global tech transfer. The CMO should also have a process for evaluating and efficiently implementing global changes as they occur. With a well-designed global quality system, continuity of quality will remain between sites.   

Furthermore, your partner CMO's quality policy must address management responsibilities, risk management, documentation, change management, CAPA, process performance, and product quality. Leveraging the expertise of a CMO to assure product safety is a proven approach to product onshoring.

Partner with Abbvie

AbbVie Contract Manufacturing is an embedded CMO with pharmaceutical expertise that draws on 40 years of experience with developing, manufacturing, and scaling a variety of drugs. We leverage this wealth of experience, combined with cutting-edge equipment at varying scales and the latest modeling and simulation tools to enable a broad range of tech transfers.

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