PharmaSource Podcast

Susan Walsh, AKA the The Classification Guru about her advice on how to improve, classify and normalise ‘data data’ and why it’s so important.

“Data is the foundation of everything that you do in procurement, whether that is reviewing contracts, negotiating with supplier or looking for fraud.”

In this episode she discusses her C.O.A.T. framework for better quality procurement data, including the importance of normalisation and classification is so important for actionable procurement insights.

Normalisation vs Classification

Normalisation and classification are both important to extract usable insights from your data.

“If you don’t normalise your suppliers, you’re going to end up with10 versions of PwC, IBM or Dell. As a procurement professional, you just need to know ‘how much did I spend with Dell’ you don’t need to know the financial and financial or legal entity. “

“Normalising data means is when you go to those companies, whether that be on a global or a regional level, you have more accurate data and potentially more bargaining and leverage to get better prices, better contracts with these suppliers, because you have the right information.

If you don’t do that you could be missing out on on really good opportunities. You might think you’ve got a great deal. But your supplier on the other side is laughing because they’ve got the correct data and they know that you don’t have the right data.

It’s also important to be able to searching for company information such as ESG or Diversity, to make sure that the companies in your supply chain are ethical responsible. If you haven’t normalised you might miss out on a company, that’s actually a subsidiary of something else.

It can be quite tricky, because there’s companies like Microsoft, that also own LinkedIn. We would always normalise LinkedIn to LinkedIn, not Microsoft because otherwise inevitably ends up getting classified as software. “

Classification

The next area is to arrive at correctly classified data.

“Classification can tell you things like the number of suppliers you have per category per country per business unit. It can tell you how much you’re spending with them. For example, if you’ve got suppliers you’ve spent $50 with, do you need them on your systems at all? Or are they diverse suppliers and you need them there for a reason?

The only way you’ll know that is if you have the suppliers classification as detailed as possible. You need to have a good taxonomy”

Stephan is responsible for operations across all CARBOGEN AMCIS manufacturing sites worldwide, including sites in France, four in Switzerland, United Kingdom, Netherlands and China.

The contract manufacturer supports customers at all stages of drug development, from clinical trials to being released on the market as a commercial product. Their services include Highly Potent API facilities and a clean room for Antibody Drug Conjugates. 

“We are specialists in providing services in developing chemical processes and produce drugs up to the final product. Depending on the nature of the projects, we can either run our activities from a single site or using multiple sites together." says Stephan.

“We normally start our relationship with clients at a very early phase through clinical phases and then we build up a trustworthy relationship. This normally lasts five to 10 years when finally, if the product is successful on the market, we will produce commercially.”

Inside Dechra Pharma's 3-Year Procurement Transformation

Dechra Pharmaceuticals is a global specialist in the development, manufacturer and sales of veterinary pharmaceuticals worldwide.

In the latest episode of the PharmaSource podcast, we spoke to Kateryna Holovnia, Head of Procurement at Dechra Pharmaceuticals about the global transformation of the procurement function, moving from a fragmented and transactional to a unified and strategic partner to the business.

The organisation is made up of a number of acquisitions which previously operated independently, so they are in the middle of a three year strategy to harmonise and unify procurement operations.

Kateryna explains how their objective is to standardise technology and processes across the nine in-house manufacturing sites they operate, and about 70 different Contract Manufacturing Organisations (CMOs) they partner with.

“We are right now integrating our systems, and platforms, bringing all this visibility where we can consolidate where in-house manufacturing overlaps with our CDMOs, what we can leverage to get access to get one-click information."

"We have brought in global category management which has the visibility to have a helicopter view of what's going on, and what are the opportunities are regionally.”

Kateryna found moving to Dechra refreshing, finding the company open and receptive to implementing the best practices she had learned in previous roles and through her network.

Listen to the full epsiode

Len DeCandia is an award-winning Supply Chain and Procurement Executive with 40+ years of experience, most recently as Chief Procurement Officer for Johnson & Johnson, AmerisourceBergen and Roche.

In the latest episode of the PharmaSource podcast Len describes the changes he has seen in procurement, including his experience in mobilising during COVID, and explains why he believes enlightened organisations must prioritise suppliers.

Here are some of the key takeaways from the conversation: 

1. 'Enlightened' organisations prioritise and centralise supplier relationships

2. You need strong sponsorship from the board to be successful

3. The budget owner is the customer 

4. Use technology to create trust and transparency

5. Be early when finding business solutions 

6. Change the story to win hearts and minds

7. Make an impact on the world

"One of the important aspects was our commitment to purposeful spending. And so one of the commitments that we made as a team to the business was we were going to double our spend with women-owned and minority-owned suppliers.

To do that, they needed to engage the budget holder in that conversation, to prove they wouldn't have to sacrifice innovation, We had to educate them on the community impact.

Johnson and Johnson regularly publishes a Health for Humanity report which quantifies the impact they make each year. More than just numbers, Len explains that when investing in local and diverse suppliers you can see the difference yourself "They are the people you're going to church with, on Sunday, or you're seeing in the grocery store, or whose children go to school with their children, because we made it part of their community. They brought us insights and innovations that we never thought of before."

Listen to the full episode podcast for more advice and inspiration.

Laurent Bosseler is Digital Procurement and COE lead at UCB. He focused on making technology for colleagues at the pharma company as simple and seamless as possible.

In the latest episode of the PharmaSource podcast, he discussed how he is currently grappling with how to make the most of exciting Natural Language Processing (NLP) technology such as ChatGPT - but without exposing his company to preventable risk.

“The power of the tool is amazing” says Laurent but adds “you must keep your critical mind and don’t upload any company content there.

“The risk of a security breach is way too high. There have been a number cases in the press recently with Toyota and Samsung reporting security breaches”

"What you pump into the system could easily be leaked. The CEO of OpenAI even mentioned it himself.“

In March 2023, OpenAI CEO Sam Altman said he "felt awful" about leaking users' chat histories and payment details.

Laurent’s advice is to use chatbots to validate your thinking. 

“ChatGPT is a gamechanger in helping the professional buyer. Use it to validate your thinking. Use it to discover new ideas, to come up with new questions for your suppliers. 

If you’re not an expert in a category, it can help you write a brief for suppliers.  It really has a knowledge power that no human being can have so use it wisely to enrich your thinking.”

However, he warns against uploading confidential information. 

“Don’t upload anything! Be extremely cautious. Do not upload anything confidential such as a contract. Wait for your company to install a ChatGPT-like tool that is behind a firewall and has the necessary security.”

“The system is clever .Even if I say ‘I'm working in a Belgian pharma company, specialised in neurology and immunology’ but I've not mentioned the name, within three seconds the system will say that you work in UCB. 

Intellectual property is also an important issue to address. "Very few people read the terms and condition when you join those sites, because it's five pages but it says that everything you post is the property of OpenAI.

“I'm trying to block colleagues using ChatGPT and discussing with my IT department to see how we can have a GPT-like, way of working within UCB firewall so that you are safe to upload something.

A case study Laurent is looking at is how NLP can improve the usefulness of their intranet.

“Sharepoint is is very good for storage of document, but we are less good at removing old documents. So if you ask a question, you might find six documents which are expired but end user might not realise. A GPT would be ideal for that kind of question and could highlight all the inconsistencies between documents” 

In the latest episode of the PharmaSource podcast we spoke to  Mark Burfoot, Vice President Research Procurement at Novartis about how advances in Machine Learning allow procurement to have a more strategic role in optimising life science research.

Prior to his work at Novartis and Pfizer, Mark’s educational background is in immunology. That knowledge of the scientific process has allowed him to create new frameworks and forms of value that go far beyond cost savings.

“There are different ways of approaching procurement.” Mark says. “You can take the traditional and transactional approach –  build contracts, help your scientists gain access to the array of suppliers and services that they require in order to achieve their work.”

“But with the advent of machine learning techniques and other types of approaches, there are other ways of looking at a problem that can help redefine how we can add value. 

Rather than looking at the cheapest product, or trying to provide the widest range of options to a scientist, we can now offer tools that help the scientist to choose the products and services most likely to lead to success.“

The insight procurement provides has been proven to reduce the number of failed experiments, putting Mark and his team in a far more strategic position to steer and inform decisions about which projects to invest in.

“The nature of research is that there is a huge amount of experimentation and failed experiments. But a lot of experimental failure happens just because we haven’t picked the best reagent.”

“We are exploring tools and approaches that can help us  guide the scientists and give them insights to say, ‘“’Hey, you’re better choosing this set of reagents versus testing all these other ones that most have have a cost effective approach.'”

“There’s a cost gain to that, but it has a productivity impact because now you’re moving faster and getting less failed experiments” as a result of that. “

Mark and his team are now helping the scientists make more informed choices which are proven to increase the success rate of experiments.

“Suppliers will always tell you their product is the best and will meet all your needs. And as I know from when  I was in the lab, scientists are still very dependent on reading materials and methods and what appears in peer reviewed literature.

Procurement is now able to provide a new perspective, offering insights to suggest better ways of doing things – different materials and methods which are more likely to get the end result they are looking for.    

“It has become a very unique partnership. We are redefining the ecosystem and the supplier base and the reagents and the services that are required in order to help drive the science.“

Measuring success

“For me, driving the speed of the science more effectively is so much more valuable than just giving more choices and having the best contracts in place. “ say Mark.

“Adoption of some of the tools that we use in this space have had a 70-80% uptake, across our scientists globally. There is still a massive opportunity in this space to do more, but the desire to play, to adopt is very good.”

“By making these kind of improvements it’s possible to see savings of 10 -20 million USD over a period of a few years in a particular region or class, which you can use for reinvestment in other areas. You can keep exponentially growing.”

“We’ve seen significant increases in productivity as a result of improvements in different types of reagent classes that we purchase, for example. That has a very positive effect. I would say that there’s probably been a four-fold increase in time saved.”

“You’re getting both cost savings on one end, but you’re also getting speed and productivity gains at the other end that’s helping you accelerate the science. It is a really nice position to be in.”

https://pharmasource.global/content/how-novartis-procurement-is-cutting-failed-rd-experiments-with-ai/

We spoke to the two Vice Presidents from Olon Group responsible for their Biotech and Small Molecules businesses respectively, Andrea Conforto VP for Biotech and Roberta Pachera, VP Small Molecules.

Andrea Conforo explains how Olon use ,icrobial fermentation technology, with two anufacturing sites located in Italy. 

“We are very flexible and can offer fermentation capabilities that support the product from early clinical stages up to large commercial production with 100,000 litres of capability”

“When partnering we typically create a ‘mirror team’ to communicate directly with all the project subject matter experts a partner has. Speed is a key milestone for us, and we try to set reasonable project stages to match the customer’s timeline."

Olon Small Molecules

Roberta Pachera leads the team focusing primarily on production of Intermediates and  final APIs on behalf of innovators or generic companies, from large, mid-sized companies or startups.

Roberta highlights how Olon is able to reduce customer time to market while maintaining product quality because ” everything is under one roof”.

“We suppor customers through the entire product lifecycle, which means we don’t need to go through multiple technology transfers from one company to another. In addition we have  a technology platform which offers a toolbox of small molecules which we can offer to customers.”

Roberta gave the example of how they worked during COVID to support a small startup to go from from initial preclinical research, to producing clinical batches to face-to-face clinical studies, all within less than 18 months.

Olon have over 300 people in Research and Development, and have forged strong links with academia in Italy, Netherlands and United States which helps them to stay on the cutting-edge. 

“We have an innovative R&D team who have, amongst other things, been working on our sustainability impact with the water we use. We now measure the water quality at the start and end of the manufacturing process.”

The first step is to make sure the CDMO project team fully understand the goals and drivers of a project in detail so that they can add real value.

“We always aim to have an open environment with partners, so that we can better understand why a customer is asking for something. We are the operational experts so with the right information will often make recommendations and propose a better  solution.” says Andrea.

A two-way relationship will generally help to reduce costs. 

“Our aim is always to reduce the customer’s investment as much as possible.  For example, our Downsteam Processing (DSP) purification will work with customers to reuse as much technology as possible from what we have already in-house.  This can dramatically reduce the cost of goods. All this implies a long collaboration, moving from transactional customer relationship to partner.”

Roberta adds that there are additional savings that comes from process optimisation when manufacturing large quantities.  

“When you are manufacturing large quantities of Intermediates or Active Pharmaceutical Ingredients, it is recommended to use modern tools like Process Modelling to help you reduce production costs.” 

To find out more, check out the Olon website

“We're charged a higher premium, because Pharma is considered a high margin industry.”

In the latest episode of the PharmaSource podcast Alejandra shares her initiative at DSM to protect Margins, and how she uncovered and reduced the 'Pharma Premium' suppliers were charging her business.

"Margin Protection comes down to three main levers. the supply lever, the demand lever and then the process lever.

1. The Supply lever really address a question from whom we buy

What are other sources here, how we can maximise how we can bring more diversity to our supplier base. How we can bring this diversification in terms of value performance or service with suppliers and also increase our supplier diversity.

2. The Demand Lever which is for whom we buy, This is where the work and alignment with the business is critical. Because this is where we go into strategic planning into inventory optimization and operational efficiencies in the supply chain.

3. The Process Lever. We need to have good visibility on data around cost allocation and pricing for example. We also need to assess with our suppliers if we can go to design for value or performance for value.

"Fantastic procurement should reduce the waste across the supply chain. So we have joint targets with the business, and then make sure that we have good compliance.

We can achieve this by bringing our suppliers all together to reduce waste in our supply chain, "

Alejandra explains how she worked with peers across different industries to uncover the “Pharma Premium” that suppliers were charging DSM. 

“We did is a series of different workshops, inviting companies with lower margin such as banking to benchmark certain services that we were buying with these companies. We benchmarked categories that are not highly specialised such as computer maintenance and consultancy services."

“We had a candid conversation with them and surprise, surprise, we proved the hypothesis that we were paying over-price on certain products and services because suppliers know we play in a high margin industry.”

“The premium was in the range from five to twenty percent, depending on the service and the product again, and also the region”

The benchmarking took place initially in Europe and then was rolled out in the United States and Asia. In all cases, these pilots confirmed that DSM were overpaying services.

"While some might argue that Pharma needs a unique price structure,  At the end of the day, if I have my Dell computer here, it's completely irrelevant if I use this for pharma, or for banking, or for an insurance”

The team as DSM used this information to proactively negotiate new terms and the conditions with suppliers, aligning contracts to what they discovered in the benchmarking

“With this information, we went back to our suppliers to have an open conversation, say, 'Hey, we're finding out what's going on'"

DSM were able to present suppliers with a clear framework of well-research information and use this to renegotiated agreements, reduce price or adjust payment terms. 

Alejandra acknowledges that driving an initiative like this can be uncomfortable.

“This approach may be provocative. Some of my colleagues, when I discuss these over a couple of drinks,  find it uncomfortable to challenge the status quo, because we like to think that that Pharma is a high margin industry. 

But I think that times has changed. We need to be mindful that unprecedented inflation and cost impact will stay longer and will have a permanent mark in the way that we buy. 

Customers and consumers are suffering from it. So we also need to be mindful and find new solutions and new ways to make it happen."

Virginie Mathieu has deep experience in R&D Procurement having worked at some of the world's biggest Pharmaceutical companies in France and Canada.

In the latest episode of the PharmaSource podcast she shares her experiences in supporting the experimental end of pharma and advice for partnering with scientists.

“R&D is a very specialised form of procurement. You really need to know what you're talking about, so it helps to have a scientific background."

When it comes to recruiting team members into the R&D Procurement roles Virginie says it’s hard to find people with knowledge of both (procurement and science) "so we train team members build the skills to learn about the other side “

Find out more https://pharmasource.global/

In response, a cross-industry consortium was formed with a mission to prevent this from happening again by protecting the pharmaceutical supply chain and ensuring the quality of materials are always at an optimum level.

In the latest episode of the PharmaSource Podcast we sat down with Rx360 CEO Jim Fries to understand how big an issue counterfeit drugs is in the supply chain today, and how procurement teams should engage with this most critical of issues.

“Let’s face it, in the pharma supply chain there are bad guys and we’re always trying to stay one step ahead. There’s a big financial gain to be made from counterfeiting drugs” says Jim.

“It only takes one incident to have it become a really bad issue again.”

As recently as 2022 Gilead were forced to take action to battle the counterfeit drug rings responsible for manufacturing counterfeit bottles of their HIV antiviral pills. It was a high profile case that saw more than 50 counterfeiters identified in a wide reaching investigation. 

“Law enforcement worked with legal experts in conjunction with Gilead to uncover and take down a massive counterfeiting ring. Not only did the industry identify the problem,  it was researched, the people responsible were found and it was stopped dead in its tracks.” says Jim.

“It really set a precedent moving forward that maybe scares the next people before they decide to do something like that.”

Supply contamination is not always deliberate. “Sometimes contamination is by accident. The best way to combat that is to stay vigilant and keep your eyes open”.

“ The amount of time, energy and money that pharmaceutical companies spend on quality initiatives is just immense. I think a lot of people walking down the street don’t understand the amount of audits that they do with suppliers”.

Lockdowns and supply chain disruption during the COVID-19 pandemic presented a major challenge to auditing supply chain integrity. 

“When the pandemic hit all of a sudden, literally in a 24 hour period, we went from doing on-site audits to wondering how we going to audit our suppliers. It’s not like the manufacturing of drugs stopped during the pandemic, it continued to move forward. The issue was how do we optimise and maintain that quality during the pandemic, when we can’t go on-site to do an audit of a facility?”

“In response to this the industry began to focus on remote audit programmes through the use of different technologies. It was exciting to watch it happen so quickly in order to maintain the safety of those drugs throughout the pandemic.”

Jim provides this advice for anyone sourcing pharmaceuticals to include in their process.

“It really comes down to making sure that the audit foundation is solid.” says Jim.

“Make sure that the supplier that you’re working with checks the necessary quality boxes.   Make sure the audit is recent and that it comes from the root source and wasn’t passed along from, from one auditor to another. “

“If you not conducting audits yourself, make sure you’re working with an audit partner that has a background in what you’re trying to accomplish. Get all the background and what’s included in that audit report and the timing of it. “

“If you’re a procurement person at a pharma company, make sure that you have open lines of communication with your quality departments. Those two departments have to work hand in hand to help each other. “

What advice do you have for situations where quality comes into conflict with other objectives such as cost containment or speed to market?

“I think we’d be a little bit naive if we said that internal conflict didn’t exist. But to me, it comes down to one thing: what’s good for the patient?"