An interview with DCAT President, Joe Sutton (Global Director, Sourcing at Eli Lilly and Company).

Joe Sutton became President of the Drug, Chemical & Associated Technologies Association (DCAT) on November 1, 2017, taking the helm of DCAT for the current term (1st November 2017 to 31st October 2018). Mr Sutton has over 27 years of experience with Eli Lilly and Company, having held various roles in support of the manufacturing organization, including IT, supply-chain operations, finance and procurement. He is responsible for developing and implementing the global sourcing strategies for API and dry product manufacturing, facilities management and utilities, as well as health, wellness and benefit programs, recruiting services and learning and development services. We spoke to Joe Sutton about his thoughts about key issues impacting manufacturing and supply in the pharmaceutical industry.

What would you identify as the most important issues facing the pharmaceutical industry that impact manufacturing and supply?
The most important issues in the pharma industry that impact manufacturing and supply will always be maintaining the quality of the product and the safety of those who make it.  At Lilly, we emphasize the need to make sure that our manufacturing processes and quality procedures are so robust that customers have complete assurance that the product they take is of the highest quality. And, those who make the products must be kept safe from the hazards and challenges that come with handling chemicals and equipment that have the potential to harm if training and practices are not adequate.  Any other concerns are secondary to those key issues.

Over the past several years, product development in biologics has increased. How do you see the pharmaceutical industry evolving in the mix between small molecules and biologics, and what are the implications for sourcing and procurement?
There certainly seems to be more focus on biologic products now, but small molecules are not going away.   The most notable difference in sourcing biologics versus small molecules is the greater prevalence of intellectual property involved.  Biologic products have much more proprietary information associated with their bills-of-materials such as cell lines, expression systems, resins and media. This dynamic requires sourcing professionals to focus more on ‘right to use’ issues and more often than with small molecules, results in contracts that include licensing fees, royalty-based payments and other limits on our ability to outsource molecules to third parties without consent of the IP [intellectual property] owners. Biologic products typically have shorter supply chains and that makes managing risk less onerous than with small molecules that might have many supply tiers.

From an industry view, what do you see as the biggest challenges facing procurement/sourcing professionals today as it relates to the supply of active pharmaceutical ingredients?
Risk Management!  Sourcing professionals understand that supply-chain risk involves much, much more than simply not running out of product.  Global supply-chain leaders in today’s world have to ensure not only that materials arrive on time but also that they have assessed and addressed risks such as environmental impact, financial stability, social responsibility and information security all while making sure that quality has not been compromised.     

What has been the impact of risk management on manufacturing and the related supply chain?
Increased risk management expectations make supply-chain management more heavily reliant on information management.  It is not enough to audit only the suppliers, but we must also evaluate every supplier that supplies our suppliers and each entity that touches our material once it leaves those suppliers.  We have to evaluate all of the potential risks and make a conscious decision to either accept the risk or mitigate it, but we cannot operate devoid from the knowledge of the risk.  Supply-chain knowledge must be maintained accurately, shared widely and reviewed often.  To do that requires thorough and reliable data systems and practices.

Given the complexity of the supply chain and increased globalization, what are the key success factors in optimizing the pharma customer-supplier relationship?
Complex global supply chains require more of a partnership approach between pharma and suppliers. The key to success is the ability to establish and maintain long-term relationships.  To be successful, those relationships have to be fully transparent, so each party understands the wants, needs and risks of both sides.