Bristol-Myers Squibb: Diversity and scale in biopharma

When your business is built on complex treatments for serious illnesses, you need a supply chain that is as agile as it is reliable.

With annual revenues of $22.6 billion, Bristol-Myers Squibb (BMS) occupies a unique niche in the world of big pharma. The 13th-largest pharmaceutical company in the world last year, BMS is less than half the size of even the sixth-biggest player. At the same time, the company’s focused product portfolio differentiates it from many of those larger competitors. BMS concentrates on sophisticated pharmaceutical and biological products for serious illnesses. Its drugs are used to treat cancers, cardiovascular and immunological diseases, for example. In 2018, 85% of the company’s revenues came from just five “blockbuster” products.

According to Matt Schwartz, Bristol-Myers Squibb’s Head of Global Logistics, this focus means the company stands apart from many of its industry peers. It shares many characteristics with small specialist biotech players, while its large size, global reach and broader product range are characteristics more commonly seen in traditional big pharma companies.

Portfolio complexity

For Schwartz and his team, those characteristics create significant complexity. Take volumes, for example. Some of the company’s products, such as its highly specialized oncology drugs, are used by relatively small groups of patients for relatively short periods of treatment. The company may manufacture and distribute a few million doses of these products each year. By contrast, Eliquis, an anticoagulant drug, is a long-term treatment used by large numbers of patients, with annual production in the tens of billions of doses.

Then there are the characteristics of different markets. The U.S. is the company’s home market, and still its largest, but 25% of its sales come from Europe and 19% from the rest of the world. The healthcare market of every region it serves has its own unique characteristics, and there can even be significant differences in approach within regions. That means, says Schwartz, that “We manage every model imaginable for pharmaceutical supply and distribution, from delivering directly to the point of care in some markets to relying entirely on distributors and distribution partners in others.”

In Germany, for example, BMS has agreements to ship directly from its distribution centers to around 600 hospitals across the country. By contrast, patients across much of Southeast Asia are served via a major regional distributor, with local subsidiaries taking over responsibility for logistics once product arrives in the destination country.

MODERN SCIENCE: BMS makes sophisticated pharmaceutical and biological products for serious illnesses.

Handle with care

Regardless of their final destination, BMS products have to travel in a highly controlled environment. For many of the most valuable and important products in the company’s portfolio, that means a cold chain with transportation and storage temperatures held between 2 C and 8 C (35.6 F and 46.4 F). Today, says Schwartz, cold chain products make up more than half of total sales by value, up from only one-fifth just a few years ago. Other products require controlled “room temperature” conditions. “I don’t think we ship anything where ambient temperature is OK anymore,” he adds.

Biological products and valuable oncology drugs receive “white glove” treatment at every stage of the supply chain, says Schwartz. “Logistics for these products is very much first class, with refrigerated storage or air-conditioned spaces in the warehouses.” Speed matters too, and not just because some products have a relatively short shelf life. “The more time a product spends in transit, the more opportunities there are for something to go wrong,” says Schwartz. “So we count on speed and on things being done correctly.”

Today, technology is helping the company to ensure that its supply chains work as they should. BMS outsources supply chain execution to trusted partners across the world. It doesn’t own or operate any of its own warehouses, for example. But the availability of smart data logging tags now gives it access to detailed data on conditions faced by its products during transportation and storage. Analysis of that data gives his team a better understanding of the risk profiles of each lane its uses, Schwarz says, allowing it to decide when routes or processes might need to be modified.

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Patients first

Despite the complexity and variety in its supply chain structure, BMS relies on a few basic principles in the design and execution of logistics. “Our overriding requirement is to be there for the patient,” says Schwartz. “The key objective is that when patients need our product, it’s there for them.” Putting patient requirements first in this way allows the company to be flexible in the solutions it chooses for different markets, he explains, prioritizing consistency of service over standardization of processes. “When it comes to decision-making and setting up distribution models, there is no one right answer for all our patients, so we work closely with our commercial organizations in each region to develop solutions that work for the patients in that market, with the right service, the right cost and, of course, the highest quality.”

A second governing principle is agility. “All of our great colleagues in BMS logistics have very specific objectives around agility,” says Schwartz. “That might be something as simple as the ability to bypass a risk to maintain supply to patients, so we need multiple options for transport lanes and we need storage locations that have really strong business continuity plans in place.” At a higher level, he adds, the company pursues agility by taking careful decisions about where it holds strategic inventory, allowing it to be deployed rapidly if needed to fill gaps or meet unexpected demand. Some critical materials and services are dual sourced for similar reasons.

Agility is a critical capability internally too. BMS has a long history of acquisitions and divestments, buying smaller rivals and emerging biotech players to boost its development pipeline and gain access to promising technologies. As a result, the company’s logistics function has become used to the challenges of post-merger integration. “Our people really know how to integrate companies,” says Schwartz, “and a lot of that is about keeping an open mind, so that during an integration it is the best ideas from both companies that survive, not just the BMS way.”

A bigger future

The agility of Schwartz’s team might soon face a brand new challenge. At the time he spoke to Delivered., Bristol-Myers Squibb had just announced that it was to purchase biopharma rival Celgene. The deal, valued at $74 billion, is set to be the largest ever in the life sciences sector, and would push the combined company into the world’s Top 10 by revenue.

If the merger goes ahead, it will also create logistics challenges and opportunities that go far beyond the integration of a complementary product portfolio. Celgene is an important player in the development of autologous cell therapies, in which immune system cells are removed from a patient and engineered to bind to specific tumor cells. By training the patient’s own immune system to attack tumors, such therapies could revolutionize the treatment of certain cancers. They will also require entirely new approaches to logistics, with products tailored for a single patient and the need for complete control over two-way logistics loops between pharmaceutical company and end user.

This kind of precision, personalized therapy is “an absolute new world for any logistics operations in a pharmaceutical company,” says Schwartz. It’s also an area that his team has been thinking about for a while. Well before the Celgene deal, BMS was investigating the development of personalized medicines using unique combinations of existing drugs. “From our point of view, these kinds of treatment are absolutely game-changing,” he says. “For the first time, they bring formulation, packaging, kitting and logistics together, really close to the patient.” — Jonathan Ward



Published: June 2019

Images: Jeff Wojtaszek; BMS

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