Traditionally viewed as a cost-containment function, procurement in the pharmaceutical sector has often occupied a tactical, behind-the-scenes role—managing suppliers, negotiating contracts and keeping budgets in check. However, that narrow lens no longer reflects today’s complex reality.
Mounting external pressures like geopolitical challenges, sustainability expectations and intellectual property protection have highlighted the need for a resilient supply chain and a truly strategic procurement approach.
In fact, according to a study by Deloitte, more than one in three biopharma executives expect manufacturing and supply chain risks to have a significant impact on their 2025 strategies and objectives, while over 40% say that building a more resilient supply chain is among their top priorities for this year.
In this article, we’ll examine the forces reshaping pharmaceutical supply chains today and explore how forward-thinking procurement teams are embracing a more strategic, value-driven approach that is focused on containing costs, mitigating risk, maximising quality and adhering to tight timelines.
The pressure to transform: Forces shaping the pharmaceutical supply chain procurement’s evolving role
As external forces evolve, procurement is transforming into an increasingly strategic and integrated function. Here are some of the factors driving that transformation:
Over the past several years, events like the COVID-19 pandemic, prominent logistics challenges, changing import and export regulations and global conflicts have all exposed the fragility of global supply chains. These disruptions have underscored pharmaceutical production’s reliance on timely access to raw materials, some of which are typically sourced from specific regions. In this volatile environment, procurement teams are tasked with building a more diversified and trusted supplier base that allows them to adapt rapidly.
As governments and regulatory bodies continue to raise the bar and introduce new standards, biopharma organisations and their partners are under pressure to meet these evolving expectations. One of the biggest areas of focus for the pharmaceutical industry is Scope 3 emissions, which include both upstream and downstream emissions in the value chain. For the biopharma industry, these emissions are estimated to be nearly five times greater than Scope 1 and Scope 2 emissions combined. As companies set increasingly ambitious emissions reduction targets, and navigate varying regulatory standards in different parts of the world, evaluating and minimising emissions across the supply chain has become more and more important.
The pharmaceutical industry remains exceedingly competitive, and innovators expect speed, quality and cost-efficiency from raw material suppliers and outsourced manufacturing partners. With the cost of research and development for new drugs now averaging $2.23 billion, it is more important than ever for procurement teams to ensure that every material they source helps to maximise value without compromising on timelines, quality and compliance.
The continued trend towards digitalisation and the widespread availability of digital and AI-powered solutions are transforming the way procurement teams work. In fact, 64% of procurement leaders believe that artificial intelligence will fundamentally transform their roles within the next five years. With access to more tools than ever, from AI-enabled demand forecasting to real-time inventory tracking, procurement teams are equipped to plan and adapt more proactively and strategically than ever.
As supply networks and competition expands, so do concerns over intellectual property. Safeguarding proprietary information, like novel formulations and synthesis methods, remains a top priority for pharmaceutical organisations. Procurement teams must take an active role in qualifying suppliers proactively and ensuring that robust IP protection measures are built into contracts from the start.
How CDMOs can support supply chain resilience in pharma
Amid an increasingly volatile, high-pressure environment, contract development and manufacturing organisations (CDMOs) play a pivotal role in supporting supply chain continuity and resiliency. With the right procurement strategy, an outsourced partner can not only help biopharma organisations prevent delays and reduce risk but also create real value. Here’s how:
Engaging the procurement team early in the project lifecycle ensures that sourcing decisions align with customer priorities and specific project requirements. This prevents potential delays that can come from supplier gaps, IP uncertainty, regulatory misalignment or issues with raw material availability.
Early procurement involvement also creates space for CDMOs to add strategic value and ensure that potential opportunities for smarter sourcing are not missed. For example, a biotechnology organisation may engage a CDMO expecting to use one raw material for their complex, multi-step process. Based on their experience, the procurement team may identify an alternative material that eliminates several downstream steps, ultimately saving time and costs. This can hold true even for larger scale projects that have existing raw material suppliers in place.
Supply chain resilience starts with supplier diversification. CDMOs that maintain a strategically balanced supplier network spanning different regions of the world help to mitigate the impact of geopolitical risk and lead time variability. In some cases, dual-sourcing a critical raw material for the same project, from two different vendors, in two different geographies, helps to insulate the project from unanticipated supply disruptions.
At the same time, it’s important not to work with too broad of a vendor network, which can overcomplicate the supply chain, hinder visibility, and add regulatory complexity. Sourcing from the right mix of partners across select regions, while accounting for varying regulatory considerations and ensuring that selected suppliers are aligned with local compliance requirements, supports greater flexibility and agility.
Maintaining strategic partnerships with a core group of trusted and vetted suppliers, helps organisations minimise audit burden, improve reliability and ensure supplier readiness.
Each vendor should be evaluated from both a regulatory and supply chain perspective. This includes considerations like third-party accreditations, openness to on-site audits, protection of intellectual property, demonstrated quality consistency, social responsibility and manufacturing scale. Collaboration with the vendor plays a key role in shaping these strategic partnerships, enhancing reliability and supporting faster project timelines.
When feasible, a CDMO that can manufacture key starting materials (KSMs) can help to lessen the number of external suppliers required and streamline project progression. In addition, a CDMO with the infrastructure to maintain stock of essential, high-quality reagents and raw materials in controlled storage facilities enables them to respond quickly if shipment delays occur. This hybrid approach, combining stock on hand with trusted supplier relationships, reduces dependency on just-in-time sourcing and mitigates risk.
Stocking decisions are most effective when combined with robust technology and data management solutions, which enable procurement teams to better forecast demand, manage inventory levels and understand and optimise costs.
There’s no one-size-fits all approach to procurement. Every sourcing decision a CDMO makes should reflect the customer’s specific priorities and requirements including respecting timelines, budgets and risk tolerance, whilst ensuring the utmost quality.
This flexibility can be especially important when transitioning a later-phase project with established suppliers. In these cases, the CDMO should be willing to work within the customer’s preferred network, so long as vendors meet key quality and compliance standards.
For earlier phase projects, a well-diversified supplier base gives CDMOs the flexibility to tailor options based on each customer’s goals and risk tolerance. While some may prefer dual sourcing, others may prioritise speed or regional access. An effective procurement team will work as an extension of the customer’s team to action these strategies.
Strategic procurement in action
Now, let’s consider what a strategic procurement function looks like in practice. Consider a major, sudden supply chain disruption, like a canal blockage, occurs. Manufacturers around the world and across industries face stalled shipments of critical raw materials for weeks or more, significantly holding up project timelines.
A proactive CDMO procurement team with controlled storage facilities already has a sufficient stock of key raw materials on hand to get their customer’s project started, so the delay of their anticipated material shipment from one of their global suppliers does not hold up the project.
They then use supply analytics and demand forecasting to understand how much additional supply will be needed at different stages of the process before the blockage clears. They turn to one of their pre-vetted, supplier in a different geography, to deliver initial stock within days or weeks, before the on-site supply is exhausted. This ensures that the CDMO avoids stock overruns and excess costs for themselves and their customer, while maintaining the level of supply they need to support this stage of the project.
From containing costs to creating value
Given the increasing complexity of projects, and the required speed to market, procurement cannot afford to be a reactive function. It must be proactive, predictive and deeply integrated.
A modern and flexible procurement approach does more than secure materials. It accelerates timelines, maximises quality and supports compliance; directly influencing project success. The ability to pivot quickly, secure scarce or specialised materials, mitigate risk and remain ahead of disruptions has become a competitive advantage.
At Sterling, we are not just a CDMO. We are a partnership development and manufacturing organisation, or PDMO. We view our customer relationships as true partnerships, rather than just a contract.
This means that our procurement team is strategically engaged in every project from the start, working closely with our customers and ensuring long-term, validated supply sources for each project’s critical raw materials. Through building strategic supplier relationships rooted in capacity, quality, transparency and diversification, we ensure continuity, efficiency, and peace of mind for our customers.
Our depth of experience across projects, markets, and suppliers enables us to anticipate needs, avoid bottlenecks and surface opportunities for optimisation. This creates lasting value for our customers and for our business.
Furthermore, as a global organisation, we have brought together multiple facilities—and distinct procurement teams—under One Sterling. This has enabled us to gain a broad understanding of material requirements for projects focused on peptides, antibody-drug conjugates, small molecules, and more, while establishing a robust and validated supplier network spanning the globe.
Here are some of the ways we address the top pressures driving pharmaceutical supply chain transformation today:
- Global supply chain instability – We work with validated suppliers from different parts of the world to ensure uninterrupted supply for our customers’ projects. We have the capacity to produce regulatory starting materials, APIs, and certain key raw materials on site, as well as the infrastructure to properly store critical materials, solvents, and reagents.
- Sustainability and compliance demands – Our global facilities in the US, EU, and UK provide us with a deep understanding of varying environmental and regulatory standards, and we participate in numerous sustainability initiatives to ensure we can help our customers meet and exceed their environmental objectives.
- Customer and market pressures – We work together closely across teams and across facilities to share expertise and unlock new efficiencies in our customers process—sometimes allowing for faster processes involving fewer raw materials.
- Digital tools and predictive planning – We believe that technology plays a critical role in optimising procurement, and we use comprehensive data solutions to evaluate suppliers, understand costs and plan proactively.
- Intellectual property concerns – We serve as true partners to our customers, protecting their intellectual property and carefully vetting suppliers to ensure no sensitive information from our customers’ projects is compromised.
If you’re looking for a partner who treats procurement as a strategic enabler of project success, get in touch with our team to learn more about how we can support your programme.
