1. Simplifying complex supply chains

There is a trend in the industry to reduce complexity in supply chains to increase agility, reduce cycle times and increase influence and partnership with key suppliers. Having a short-list of preferred suppliers can also expedite sourcing decisions and accelerate new project execution.

Teva, too, has recently initiated a program to evaluate its overall vendor base, following the industry trend to consolidate spend and focus on core strategic partners.

2. Moving towards high value projects in North America and Europe

A recent trend in the industry has seen significant investment in new capacity not just in Asia, but also in many high value projects in North America and Europe, bucking the predicted trend towards new investment primarily in lower cost regions.

This has come about through continued investment and growth in complex and compliance needs, with a focus on biologics and sterile facilities. A recent industry announcement highlighted a $9 billion investment in synthetic API plants in Indiana, US, for example.

This trend also reflects an increased interest in domestic manufacturing post-COVID which minimizes risks to local economies by ensuring an uninterrupted supply of critical medicines during unforeseen events, while maintaining a capable workforce and infrastructure within key markets and reducing reliance on regions which may struggle to supply during a future pandemic, conflict or natural disaster. We saw this play out in multiple supply chains during the pandemic and the logistics bottlenecks that followed, and we see quite a bit of new capital investment from CMOs and innovators in all regions right now.

3. Dual sourcing for flexibility and efficiency

Teva has had recent success in the practice of dual sourcing products, leveraging both internal and external manufacturing capabilities. Balancing production between internal and external sites based on demand fluctuations and site capacity offers greater flexibility and efficiency, ensures continuous supply, and optimizes resource allocation - all without having to make substantial investment in new facilities.

NPS-ALL-NP-01308-JUNE-2024

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