Pharmaceutical supply chain

In many parts of the world, medicines are not always available where they are urgently needed. We want patients in low- and middle-income countries to have fast, safe and affordable access to medicines. We believe that efficient supply chain management is key to accomplishing this, as is support for local manufacturing in line with our high standards.

Our approach to efficient supply chain management

Our pharmaceutical supply chains are organized efficiently to ensure that our products reach the right place in the right condition and quantity, at an affordable price and on time. Modern supply chain solutions allow us to monitor our inventory and current deliveries, as well as to predict expected demand for medicines, partly in real time.

Hand in hand with our partners we endeavor to improve supply chains, even in developing countries, and to guarantee the targeted supply of medicines. To this end, we partner with pharmaceutical companies and other supply chain . We manufacture some of our products directly in the regions where they are needed, thereby shortening the distance to the consumer. Furthermore, thanks to local manufacturing we can offer medicines in these countries at considerably lower prices than in Europe.

How we organize our supply chains efficiently

Global Planning is the unit responsible for our efficient medicine supply chains and is part of the Biopharma Supply Network Operations unit within our Healthcare business sector. Global Planning collaborates with our Access to Health unit and consults experts from other business sectors as needed.

Our commitment: High quality standards for pharmaceutical production

All our pharmaceutical production plants operate to the same high standard of quality worldwide. We thus fully comply with the internationally harmonized guidelines set out in and . This also applies to contract manufacturers.

Our uniform quality assurance system ensures that our quality standard is adhered to everywhere. It comprises training courses, quality control monitoring and technologies that are tailored to each site. The results of all audits conducted by health authorities are published Group-wide, allowing the respective units to share lessons learned and benefit from one another’s improvements.

Through our Virtual Plant Teams, we provide our contract manufacturers with the support they need to comply with our quality standards. In Africa, Asia and Latin America, our external partners are each assigned a production expert from our company to act as a virtual site leader and provide guidance. Our Virtual Plant Teams were recognized as a best practice in the 2016 Access to Medicine Index.

Leveraging organizational and technological possibilities

Accurate business forecasts are the foundation of efficient supply chain management. In 2017, we harmonized our Biopharmaceutical business planning processes across the Group and joined them together. We furthermore rolled out a special platform enabling us to plan specific demand for medicines centrally. This data is used to manufacture and deliver medicines according to demand, which allows us to prevent local inventories from running out or expiring. Our activities start with demand forecasts compiled at the local level, which are rolled out to the regional level and finally aggregated at the global level. All units involved coordinate with one another at least once a month.

In 2015, we rolled out a software-based solution for our customers in northwestern Africa. They can visit our e-shop at any time to quickly and easily order medicines that have been approved by the respective regulatory authorities. The system makes demand more transparent while also reducing lead times and miscommunications.

Working with partners to achieve more

Our collaborations and partnerships are founded on the Group-wide exchange of centrally stored information, which allows us to organize shared supply chains in a more efficient manner.

Shared data platform for medicine donations

In 2016, we launched NTDeliver, a digital information tool supporting transparent supply chains for medicine donations. This tool was developed under the auspices of the Neglected Tropical Diseases Supply Chain Forum, a . Forum members include the World Health Organization (WHO), the Bill & Melinda Gates Foundation, the logistics firm DHL, and six pharmaceutical companies that run donation programs: Merck KGaA, Darmstadt, Germany, MSD Sharp & Dohme, GlaxoSmithKline, Pfizer, Johnson & Johnson, and Eisai. NTDeliver transparently displays the deliveries from the donating companies – from purchase orders made by WHO through to delivery to the first warehouse in the destination country. Moreover, in 2017 we ran a pilot that also tracked the deliveries all the way to the treatment point in the destination country, providing end-to-end visibility of our shipments. This improves coordination of our efforts on the last mile as well as providing us, the local experts and WHO with a more transparent overview of in-country inventory.

Further partnerships

In addition to these initiatives, we are also a founding member of the Accessibility Platform, which convened in 2017 to discuss local supply chains during our Access Dialogues. This is an informal effort spearheaded by the private sector that aims to raise awareness of supply chain issues as part of the access to health challenge. It also seeks to increase knowledge-sharing and information exchange through open, multi-stakeholder dialogue, and to identify opportunities for collective action. We also share best practices with other companies and partners on efficient, end-to-end, secure supply chains.

Promoting local production

At the end of 2017 we inaugurated a new production facility in Nantong (China) that will soon supply China directly with our pharmaceutical products. In India and Indonesia, too, we manufacture drugs for diabetes, cardiovascular conditions, and diseases of the lower respiratory tract. This allows us to supply medicines faster and more affordably to local markets, as well as to neighboring countries such as Sri Lanka and Myanmar.

Supporting regional vaccine manufacturers

In partnership with the Developing Countries Vaccine Manufacturers Network (DCVMN), we sponsor educational programs for vaccine manufacturers in developing and emerging markets and pass on our knowledge to ensure the safe, high-quality production of vaccines. Since 2014, we have conducted more than 12 training sessions as well as various technical workshops in the Asia-Pacific region and Latin America. In 2017, three seminars were held in Vietnam, India and China.

People or organizations that have a legitimate interest in a company, entitling them to make justified demands. Stakeholders include people such as employees, business partners, neighbors in the vicinity of our sites, and shareholders.
Good manufacturing practice (GMP)
Good manufacturing practices (GMP) is a system for ensuring that products are consistently manufactured and controlled according to quality standards. These guidelines are used in the production of medicines, pharmaceutical active ingredients and cosmetics, as well as foodstuffs and feed.
Good distribution practice (GDP)
An EU guideline that regulates the proper distribution of medicinal products for human use.
Public-private partnership (PPP)
A collaboration between public sector (government) organizations, private companies and/or not-for-profit organizations.

Sustainable Development Goals

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