Skip to Main Content

How leaders are navigating the changing biopharmaceutical supply chain

By EMEA Healthcare Practice
November 2023


  • EMEA Healthcare Practice

Biopharmaceutical leaders have faced numerous challenges in recent years. Bringing COVID-19 therapeutics and vaccines to the market at record scope, scale, and speed meant that the supply chain was pushed to new limits. Inflation has set in, causing prices to spike, and drug shortages have occurred around the world — causing some regulators to look for root causes and potential policy solutions.

As interest rates have risen, companies have had less access to capital to invest in new products, improved processes, and other forms of innovation. Economic turbulence has made planning and forecasting a challenge. And, more recently, the ongoing tragedy in the Middle East and Ukraine has disrupted supply chains globally — with the potential for more disruption looming large.

In this era of increasing complexity and volatility, the role of leadership has taken on a renewed significance. There is a need for CEOs and other C-suite leaders characterised by grit, resilience, and an unwavering focus on disciplined execution. Sticking with the status quo is not an option; leaders must embrace and work through the complexity and volatility.

Biopharmaceutical industry leaders, including CEOs, C-suite executives and private equity investors, gathered in Barcelona recently for the annual CPHl conference to discuss the challenges facing the biopharmaceutical supply chain, and the opportunities to work together to solve these challenges. Here is our perspective on the top biopharmaceutical supply chain trends from this annual event and their leadership implications.

1. Strategic partnerships are on the rise. Rising energy and material costs have persuaded biopharma chief procurement officers to pursue strategic partnerships with suppliers. Increasingly this means long-term contracts between suppliers and biopharma companies, giving biopharma companies some stability in the supply and pricing of materials and suppliers a more stable, enduring source of revenue. Additionally, strategic partnerships between pharmaceutical companies and contract development and manufacturing organizations (CDMOs) are helping build additional capabilities and expand geographically in regions such as Asia.

2. Collaborative partnerships are popping up in unexpected places. A somewhat surprising trend is the interest in increased collaboration among CDMOs to develop complementary solutions for their shared biopharma clients. This type of collaboration has been seen in the aerospace industry but is not common among CDMOs. As this trend is still nascent, it is unclear what these arrangements will look like  something CDMO leaders will have to navigate.

3. Increased diversity of product portfolios has created a more complex supply chain. Pharma companies are managing increasingly complex product portfolios, spanning from targeted and personalized therapies to blockbuster drugs to high-volume generics. In turn, the supply chains supporting these product portfolios are growing increasingly complex.

4. Accelerated timeline to bring products to the market puts pressure on the supply chain. Since the pandemic when COVID-19 vaccines and therapeutics were brought to the market in record time, there has been heightened demand for faster time-to-market capabilities. Pharmaceutical companies and their partners are looking for ways to streamline and innovate existing operations to accelerate time to market and avoid supply issues becoming an impediment.

5. Geopolitical turmoil raises risks for the global supply chain. The conflicts in the Middle East and Ukraine, together with the potential for escalating tensions elsewhere in the world, means that pharma leaders must proactively monitor the risks posed to their global supply chain and plan for their potential impact on the procurement of materials, manufacturing of products and distribution of those products.

6. Current market conditions are creating challenges for Private Equity. Several private equity sale processes faced hurdles due to unrealistic EBITDA multiples. Given the high multiples that funds acquired these assets at, there has been a delay in bringing them to market due to current interest rates and a lack of financing. Most processes are stalling due to valuation expectations and many funds don’t have the appetite to see their business go through a failed process. At the same time, though, funds remain keen to test the market, given the urgency to return capital to limited partners (LPs).

The supply chain challenges and opportunities faced by biopharmaceutical companies are not solely the responsibility of the Chief Procurement Officer. Without proper attention and planning, they could upend business models. CEOs and the entire C-Suite must understand and actively work together to mitigate these supply chain challenges and capitalize on the opportunities.

We believe that biopharmaceutical CEOs and other C-Suite executives that can do the following will be well positioned to navigate this complexity:

1. Anticipate and prepare for rapid change. Leaders need to be forward thinkers, constantly scanning the horizon for the latest industry developments, geopolitical issues, technology changes and regulatory proposals, such as the EU good manufacturing practice (GMP) guide revisions, which aim to clarify the regulations affecting the manufacturing of sterile drugs made in the EU, including products which are imported.

2. Embrace complexity through systems thinking. Recent Spencer Stuart research about the CEO of the future found that systems thinkers recognize and embrace the interconnectedness of everything, thinking beyond traditional lines to develop bold ideas. To be successful in this increasingly complex world, leaders must understand this interconnectedness and create a strategy that is flexible and adaptable. This holds true for supply chain strategy. In particular, the strategy should be designed to incorporate technologies like artificial intelligence, machine learning, robotic process automation and mobile robots as the technologies continue to evolve.

3. Empower colleagues to focus on execution and results. Spencer Stuart research highlights the need for top leaders to shift their leadership style from directive — what may have helped them rise to the top — to empowering and enabling. This paradox holds true for companies and leaders navigating an increasingly complex and volatile supply chain. Leaders need to empower their teams to navigate cost and supply chain challenges effectively and creatively. The ability and authority to devise and execute ideas that improve operations and financial results is paramount.

4. Foster collaboration internally and externally. Leaders need to be able to oversee seamless collaboration and cooperation across their internal teams, remote or in-person. They also need to work well with their external strategic partners to ensure those partners are meeting the company’s internal quality standards. This often requires establishing shared expectations with strategic partners, across diverse company cultures and aligned to a common purpose.

The global biopharmaceutical supply chain is undergoing rapid change marked by increasing complexity and volatility. Leaders who can anticipate and prepare for rapid change, embrace the complexity this change brings through systems thinking, empower their colleagues and foster collaboration are likely to see gains in their business operations and financial performance.


  • EMEA Healthcare Practice