Q&A: Univar Solutions - the importance and challenges of distributing and sourcing pharma ingredients

As director of strategic growth and technical sales plus pharmaceutical ingredients, she has given us a comprehensive overview.

OSP: Can you tell me why the distribution and sourcing of pharmaceutical ingredients is so important? ​

MW:​ Interestingly, but not surprisingly, distribution got its start in ancient military times. Romans and Greeks used logistics and distribution channels to provide their armies with what was needed. After World War II, distribution as a separate business model took off as a way for suppliers to focus on producing as much of their raw materials as possible and get them into markets in large volumes in an efficient manner. The need for downpacking into smaller quantities quickly became obvious as much of the demand did not have the means to bring materials in by railcar or even truckload. Accessibility to essential raw materials drives economies.

Specific handling, storing, and shipping of materials based on each industry’s requirements meet the needs of the marketplace by helping suppliers move their raw materials for maximum reach while adhering to a variety of requirements in how those raw materials can be delivered to every type of application. Now, distribution has evolved to bring additional value from those who have achieved a level of logistical and supply chain expertise to help end market users focus on their core, while distributors focus on everything it will take to plan, move, and store the inventories they will need for production.

As a full-service distribution partner that leverages a supply chain with global access and has the assets for specialized local delivery, we own that last mile of delivery. By seamlessly bringing together our portfolio and services businesses, we are redefining pharmaceutical ingredient distribution by offering reliability, scalability, and innovation.

Drug manufacturers

Between patent battles, competing offerings, and the massive cost of taking a drug from clinical trials to commercialization, the pipeline of projects should be constantly refilled. It’s prudent for drug manufacturers to weigh the commercial viability of their projects by ensuring that their recipes consider reliability, cost, and security of supply of any materials built into the formulation in earlier trial phases.

As a distributor, it’s a partnership that we aim to offer our customers. Reliable sourcing and cost implications must​ be part of the planning as production needs to scale up. If a manufacturer partners early with us, we can source, provide secondary sources, and design efficient supply chains that consider quality and supply from small quantities all the way up to commercial production.

OSP: What challenges were there for sourcing ingredients during COVID-19 pandemic and how do they differ from challenges in the industry today?​

MW:​ The past several years tested the grit of chemical and ingredient distributors like never before. Along with a rapid need to shift ingredients from one focus of production to emergency production, in February 2021 a historical winter event set records along the Texas Gulf Coast. This event was a deep freeze that severely impacted petrochemical supply chains across the world. With supply constrained and demand in flux because of rapidly changing shifts of applications, distributors played a critical role in how the allocation of raw materials would play out and arrive where they were needed most.

From the beginning of the pandemic, there were very clear demands on critical ingredients for medicines and products including obvious demands such as hand sanitizer, respiratory therapy drugs, and then eventually, COVID-19 vaccines. The entire industry faced pressures like never before that have indefinitely changed the way we operate. It was a period that tested all our capabilities but also solidified our learnings. It brought our logistics and supply chains firmer in line with what our pharmaceutical industry customers would come to need of us. At Univar Solutions, we have invested in our people, our assets, and even our lab capabilities to support the pharmaceutical industry.

While the demands of today may be less focused on responses to a pandemic, the last few years changed the way the pharmaceutical industry readies itself to respond to crises. Global and local health supply chain vulnerabilities have led to changes around the world. As partners to the industry, distribution has learned that though the response may be global, we must consider local for the delivery of critical resources.

To meet the changing needs of the market, Univar Solutions has successfully dug into its focus within the pharmaceutical industry, having met and put the toughest of demands behind us while also preparing ourselves to meet the demands ahead of us.

OSP: Which types of ingredients are the hardest to source and why?​

MW:​ The answer depends on market conditions impacting the availability of those raw materials; for example, if a plant shuts down anywhere in the world (either permanently or temporarily) and it serves a major supplier of critical materials only made in one or two plants around the world, the impact can ripple across the entire market. Security-of-supply is hard to achieve considering how many unpredictable situations can disrupt availability. This is where the evolution of the distributor’s role plays a huge part. Distributors can work with a manufacturer to secure multiple sources, provide storage for safety stock, and provide regular market outlooks that could help procurement teams determine when it may be appropriate to begin qualification of other sources should they see risk for disruption.

OSP: Can you tell me how you have invested in your supply chain and logistics capabilities and what impact this had? ​

We’ve invested to specialize in every facet of ourselves for the pharmaceutical industry. Our people are technical and understand the demands of our customers. We have dedicated teams that monitor quality, regulatory, and documentation requirements. Our application specialists aim to bring you more than just products, they aim to help you solve problems with our extensive portfolio of ingredients.

Univar Solutions has invested in our global network of pharmaceutical labs, run by experts from the pharmaceutical industry and with equipment that matches technologies that our customers have in their labs. We don’t only aim for supply chains that are customized for the industry, many times we design supply chains specifically for a customer and to be wholly dedicated to them. We understand that customers value quality, stability, and dependability. We understand our role and how we are accountable within the supply chains of our customers and in the communities they serve.

OSP: How has your takeover by Apollo Global Management this year affected your services and operations?​

MW:​ The completion of the agreement for Univar Solutions to be acquired by funds managed by affiliates of Apollo begins the next chapter for Univar Solutions. As we further enhance our position as a leading global chemical and ingredients solutions provider, we have enhanced flexibility to explore growth opportunities for the benefit of customers, suppliers, employees, and industry alike.

With Apollo, we look forward to building on the foundation we have created. Mergers and acquisitions (M&A) are nothing new to the chemical industry and chemical distribution.

OSP: Who are your main competitors and how does your business stand out?​

As a global leader in chemical distribution, we bring products to market with our deep expertise and reliable and resilient network. We have separated ourselves from the rest of the distribution business through our tireless efforts to sharpen our business model and position ourselves for long-term success. We shifted our focus from a traditional chemical distributor to a distributor with a full line card of both specialty and foundational chemicals and ingredients. Univar Solutions also delivers a suite of value-added technical, supply chain, and sustainability solutions to customers in a diverse array of end markets.

We believe distribution leaders must:

• Continue to deliver safe and reliable supply to meet market demands.
• Adapt to the latest technologies to innovate, streamline, and grow.
• Expand sustainable and natural product offerings; and
• Connect customers to the essential chemicals and foundational ingredients that are vital to our daily lives using digital tools and technologies.

The diversification of industries and consumer and industrial product demand has also changed in recent years and has grown regionally. We can deliver more ingredients and products globally, bringing them to market in populations that need them through our supplier relationships. Whether it’s playing a part in the supply chain for medicine or food products or serving customers with formulations and product development in our Solution Centers, we support industry in many ways. Also, our Solution Centers are a key asset for ingredient innovation, which is vital to helping keep our communities healthy, fed, clean, and safe.

OSP: How do you see the market changing going forward? What challenges and trends do you see emerging for pharma manufacturing?​

MW:​ The pharmaceutical industry is facing a big patent cliff. It’s creating urgency in the generics space in the race to get their Abbreviated New Drug Applications (ANDAs) in place so that they can enter the market with their generic drug. Simultaneously, large pharmaceutical companies who may have held back research and development projects to not cannibalize the market on their current product offering may be releasing the follow-up much faster than planned. As the global economy continues to recover and evolve post-COVID-19 pandemic and with geopolitical tensions, the ingredients industry, like most industries, is not immune from the impacts of those financial conditions.

The ingredients industry is constantly in a state of flux as it must continuously respond to global supply chain challenges, and – specifically as it pertains to pharmaceuticals - the need for drug manufacturers to continuously improve the medicinal efficacy of their offerings. Also, the increased focus on ESG means the ingredients industry will have to evolve to ensure they are either working on how to manufacture their product offerings with environmental footprint considerations or consider alternatives to their current lines that can address those requirements.

Personalized medicine

The rate that which technological developments accelerate in any space is increasingly exponential, the life sciences industry is changing and evolving at an amazing pace. Any sort of prediction would be truly hypothetical based on where research and development (R&D) is currently focused. Personalized medicine developed based on each person’s body could be leaps and bounds from where it is now. The biopharma industry already has a promising pipeline of therapies being evaluated for cancer treatment and rare diseases.

The intensity of curative therapies for chronic conditions along with advances in early detection technology could reduce the need for medications considered to be lifelong medications. An increasingly aging population, but also one with a longer average lifespan could also provide a new source of challenges for the biopharma industry as scientists look for a way to keep the population living with relatively good health and mobility into the age of 90s and even 100s. Finally, 10 years from now, with that aging population and the continued push to make health care more affordable for everyone, we could see big movements to somehow make these developments more accessible.

What’s to come will depend on the long-term strategies of pharmaceutical manufacturers. The Univar Solutions Pharmaceutical Ingredients team continues to position ourselves to respond to whatever the industry may need. We will always prioritize quality, security of supply, reliability, and the ability to respond. We look constantly for ways to improve our supply chain response and ensure our customer partners can rely upon us as they also evolve to meet the next wave of challenges within the pharmaceutical industry.