ESG compliance has also become an important topic for China, and the best known and reliable providers are at state-of-the-art level compared to Western providers. Similar to Indian providers, while in this country, there are still problems from the past, as it is known that water pollution from pharmaceutical and bulk drug production in Hyderabad remains a severe ecological and public health crisis, this is publicly available information. It is therefore also within the responsibility of customers to consider ESG compliance of a vendor during their supplier qualification.

With global supply chains under pressure from regulation, climate risk and stakeholder scrutiny, what digital tools or AI/ML-driven platforms are you using (or planning) to ensure real-time transparency, traceability and ESG performance across multiple tiers of your pharma supply network?

Dorra Pharma, and other providers, are already using AI driven route scouting for chemical processes, in our case also AI driven (virtual) Design of Experiment. The outcomes are still verified by human chemists. AI can help to rapidly prepare a company profile, however, these systems can only access publicly available data and information. Another field where AI is being or will be more applied is analytics, for example to rapidly interpret and process analytical data and identify problematic findings.

Advances in manufacturing (automation, digitalization, predictive analytics) are often seen through a cost-and-efficiency lens — how do you leverage these capabilities specifically to reduce carbon footprint, water and energy consumption, waste generation, and drive circularity in the pharma supply chain?

As indicated, DoE can first also be made virtually, which can save time to find critical process parameters. To find the best suitable ROS also in the light of carbon footprint reduction (topic “Green Chemistry”) is already being applied at various levels. Larger providers are in general more advanced, while small- to mid-sized vendors lag behind, still be compliant with existing rules and regulations.

One of the most efficient ways to reduce carbon footprint is to shift from fossil energy production to CO2-neutral energy sources. Examples for this are of course Photovoltaic energy, power from Hydroelectricity (example Switzerland), Wind-Energy or CO2-neutral agro wastes. For example, Hikal Ltd., India, is using bricks from agro-wastes for its heat generation at a couple of their sites, combined with photovoltaic.

In Europe and the Western hemisphere, we need to change our mindset, as technology leadership, also in carbon footprint reduction, has already shifted to other countries and areas like China, partially India and others. Example: Germany still depends heavily on imported natural gas and LNG (also from Russia)

Energy consumption Germany 2024 (source IEA, iea.org):

How can CDMOs and pharma companies collaborate more effectively to overcome regulatory and technical barriers to circular economy adoption, such as solvent recovery or sustainable packaging?

From my experience, solvent recovery is already part of today’s process optimization strategies. This very much depends on volumes used and processes. Larger providers have solvent recovery plants or columns. If not part of the original process, the introduction of solvent recovery within an API manufacturing process needs to be validated also for the client’s process using the API. Often, this is not interesting to a pharma company because of the cost for re-validation. Therefore, it is key to already consider solvent recovery from the very beginning of process R&D.

For packaging, I do not have the necessary experience, but I can imagine that used drums could be recycled, especially if plastic or metal drums, after a defined cleaning procedure in order to avoid potential cross-contamination from previous products contained in such drums.

What lessons can pharma supply chains learn from other industries that have successfully integrated ESG into their operations, and how might these insights be applied to future strategies?

Already many years ago, I had prepared a presentation of how we in pharma chemicals could adapt integrated Supply Chain management for example from the automotive industry. In the meantime, a number of mainly large pharma companies have in fact adapted such systems, and I had the pleasure to work with a large pharma company applying integrated supply chain management through their external manufacturing department in an excellent way.

As in the meantime, we went through the effects of Covid and supply chain interruptions and with the new US-policy to “re-shore” manufacturing, it makes sense to manufacture again more locally, i.e. in Europe, in the USA or other countries. However, it would not make sense to re-shore let’s say Ibuprofen manufacturing to the USA, as cost and prices could not meet today’s levels, if not made by a breakthrough technology that allows to substantially lowering manufacturing cost.

Also, there is still a contradiction between the need to secure the supply of important drugs and the pressure on drug pricing still exerted by most governments. As long as politics do not align with the new situation, I am pessimistic about re-shoring.

The need for antibiotics for example is another important issue, as in a number of European countries, there is a shortage of standard Antibiotics. The production of antibiotics has migrated to Asian countries (i.e. China and India), and only a few sites are left in Europe, among those the Sandoz site in Kundl, Austria, and perhaps the former EurAPI site in Brindisi, Italy.