@Sandra Neumann (Ferring)

pharmaceutical company has is probably more than tier one. At least that's what I have seen in most of my roles, because these are the companies that we work together with very closely.

Now, we know it's much more complicated, and I know you are all the experts here in the room, so it's probably even more complicated than what I'm showing you here.

But what is interesting, the U.S. has actually gone into measuring vulnerable medicines lists. And the vulnerable medicines is not just measuring the shortages.

They really come from the medical impact. So they were asking, what kind of drugs will have the biggest hit on patients' lives and on our healthcare system when we have a shortage?

They have identified 15 drugs or chronic illnesses and 50 drugs for acute treatments. So imagine the millions and millions of

And what is actually interesting now is that they have started to include the key starting materials into their vulnerability measurements.

And what it showed was actually concerning. So out of that 100 drugs that are essential for the U.S. healthcare system, a study 48% of those drugs were relying on a key starting material that was sourced exclusively from one single country.

This is a big risk, of course. I think we're at the point of a structural tension. As I mentioned before, our systems,

We're perfect. They're a masterpiece on paper, but they start to break. And when they break, they don't break operationally, they might break human lives.

So what should we do to make our supply chains more resilient? And don't get me wrong, it was absolutely right to drive down the costs, to take out inventory, to consolidate.

We also need to acknowledge that most of our APIs and generics are actually manufactured in the Asian area, particularly China and India.

Our healthcare systems are not really rewarding resilience at the moment. mean, as long as we have RFQs, as long as hospitals always look for the cheapest drug, it's going to be difficult for us to actually keep that resilience because resilience means investment.

Investment means cost. And cost means someone has to pay for that, and you need to have those discussions to actually make the trade-offs needed in the future.

Plus, what is actually coming out of the way is all our more innovative drugs, they aggravate the problem, because it's going to be a lot about gene therapy, cell therapy, personalized medicines.

This means smaller batches, shorter shelf lives, and very specific individualized deliveries. So we make the whole system even more complex and more costly.

Maybe we should also start around how is supply chain seen in a company. Now, I'm very honest with you, I'm a commercial person, and you might not like this, but a lot of commercial people see supply chains.

as a support function. It's not. Supply chain is a partner, and the supply chain will become a strategic asset in the future, exactly because of that resilience, exactly because we need to show we cannot break the supply chain to our patients.

I've seen this in so many instances. And by the way, it's not just in pharmaceutical companies. Take a restaurant.

The kitchen will always blame the waiter if things go wrong, and the waiter will always blame the kitchen if the customer is unhappy.

So we need to learn to work together more closely because we're a team. One is delivering the product and the other one is dealing with the customer.

I've seen it in a lot of other companies as well. Customer service always feels undervalued. They don't have the same attractors.

The bonuses that the salespeople have, they don't get to get to the fancy conferences, so I'm happy you're here.

And it's a lot of tension, whereas the salespeople, they're on their own on the road, and they might also be jealous about customer service or supply chain people being in the office having a required profit.

And, and this is especially applicable for the plumber industry, it really gets ugly when you have bonus discussions. How much of the sales you couldn't make as a salesperson is because your colleague in supply chain did delivery.

On the other hand, the supply chain person struggles to actually get the accurate forecast. And again, I have seen so many forecasts, different forecasts, and very often forecasts are made, I should say, in a different way, depending on whether you talk to...

Or to some international manager that is visiting your country. So what do we do now? We want to make our supply chains more resilient.

And I may give you another example I was involved in. It was probably one of the biggest urgencies that I ever have seen in the pharma world.

I was working for a big dialysis supplier and we learned that one of our manufacturing sites was actually up.

There was a big outage and it became very clear that the site would not be up and running again for months and months.

The whole European countries were dependent on products from that. One site. There were other sites who produced similar or the same materials, but they were not registered in the European countries.

So technically, you cannot import that kind of product. Plus, all the supply and production capacity of the competitors was not enough to cater for all the patients out there.

Now, dialysis is a life-saving therapy. You cannot just pause or delay. A couple of days, your patient will be dead.

And guess what? Fun fact, it happened during the Christmas time. So we really got together and it was nice to see because exactly that collaboration, when a crisis hits, it can actually happen.

And it did happen. We worked very closely. We switched from monthly deliveries to daily or weekly deliveries. To ensure every patient had the right amount of the products.

We had to negotiate with the Ministry of Health and the healthcare governmental responsibles. Because we could show that there was no product available, people would die, so you needed to actually import product from another production site.

Although technically, it was the same product, but not registered in the European countries. Our company would fly in one jumbo jet, one jumbo jet a week of products, because it was all liquid, so it was fairly heavy.

And we got distributed. Another thing you very often see with shortages is boundary. I mean, remember COVID, empty toilet papers and this kind of stuff.

So everybody tries to get as much in as possible as soon as they learn about it. If the We really behaved, and no country organization was bunkering products just for the benefit of having the same pitch.

We had to go into hospitals, we had to retrain people because some of the products were slightly differently. We had to retrain patients, etc.

It was a really, really intense time, but it brought the team together. And you might find it ridiculous, but I actually liked it a lot.

We made a small booklet at the end of it, where all of the people actually were in there as a portrait, and they said what they learned from the crisis, what they were proud of, and how they dealt with it during the Christmas time that they should spend their families.

So it was all there from a technical perspective, which is traditional production sites. think the called the Ensuring you have discussions with the governments, and I think that is happening as well, because, again, we need to look for resilience.

We need to ensure that product is going to be there. So there is also tendencies to make it easier to switch products across countries, which, of course, is not always very easy because there is different languages, at least in Europe.

But on top of that, today, we have actually great tools from our digital space as well. Sensors for real-time tracking, have blockchain, et cetera, traceabilities.

This is what we should actually add on as well. I recently have started to advise an AI company that actually deals with customer service and supply chain, and it's stunning.

Within a few weeks, you manage to actually automate a lot of those processes, and this gives you the opportunity.

But you need to actually free up some resources, which you can then retrain or redeploy into making it more resilient.

So what should we do? When we think back of the project, we have the project triangle that shows time, cost, and quality.

That is actually our world that we deliver. We need to deliver on time, on the cost, on the quality.

Probably we should enlarge that framework. We might want to add KPIs and measurements for visibility of our supply chain.

And we might actually want to add KPIs and measurements for the resilience of our supply chain. And when I'm saying that, this is not just within the supply chain, we should do that.

This is a very open discussion, because remember, supply chain is going to be a strategic part of a formal industry.

So this needs to be embedded into the whole management teams. It needs to be aligned with commercial people. And it should also be embedded directly into the risk analysis of pharmaceutical companies.

I promised you to tell you how we tackled the six-hour countdown with our pediatrician. The team got together, it was very intense, and we identified three possible solutions.

Because none of the solution was actually clear that we would make those six hours, we started two in parallel, and we had a third one as well.

First, one product was identified just across the border. We put it into a taxi and tried to get it across the border, although technically it's not that straightforward.

Secondly, there was one product in another hospital, so we sent a salesperson to pick it up in a hospital and drive it through you don't

whole country to the other hospital. And we also identified more products in another country further apart, and we had a helicopter on standby, actually anything.

We made it. It was a very intense day. We were very happy, course, but remember, you cannot work on this one and on this intensity every day.

But if we look to increase and to improve our resilience and our visibility, I'm very sure that we can make our supply chains less vulnerable.

Because I firmly believe the pharma industry will not only be defined by what we will start in the future, but by what we can deliver.

Thank you very much.