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30 Pharmaceutical Technology ® Trends in Formulation 2023 eBook PharmTech.com Qualit y • the cost to manufacture the API • the cost of the quality oversight necessar y to ensure safe manufacturing, product qualit y and integrity, and reliable global supply (e.g., business continuity) • the speediness of regulatory support, enabling faster market access • the costs that can accrue due to problems such as deliver y delays or shortages altogether as well as quality complaints that can lead to prod- uct recalls and reputation damage. When all these factors are evaluated during API supplier selection, the process naturally leads to the choice of the most qualified API suppliers with the best cost-to-quality ratio. And even if drug formula- tors may initially end up paying a premium for such APIs, the overall total cost of ownership may ver y well be significantly lower once the cost of quality management, regulatory speediness, and reliability of supply are considered. Striking the right balance Even with the API suppliers of the highest quality, there is always some level of risk associated with API out- sourcing. The goal is to identify reliably, high-quality suppliers that provide good, not just acceptable, quality material at a fair price so that both the API supplier and drug formulator can establish a competitive position in the marketplace. Taking the total cost of ownership for API outsourcing into account also helps to minimize the risk of doing business. A growing group of API suppliers, including C2 Pharma, have hybrid manufacturing approaches, doing parts of the API development process in house and out- sourcing production to a handful of intensely vetted contract manufacturing organizations (CMOs). So even when API manufacturing is not in-house, the company is able to carry full responsibility for the quality of the APIs brought to market on the DMF and Certification of Suitability (CEP) registries. The quality strategy includes review and approval of all batch manufacturing records; review and approval of all changes to equipment, processes, or anything else that can impact quality; daily review of stability and other QC data, monthly discussion of out-of-spec incidents and other issues; and frequent onsite audits. Established meaningf ul and balanced relation- ships with contract manufacturing partners require teams to work together closely and recognize the im- portance of having such an elevated level of oversight. This level of oversight is not cheap, but in the long run, saves time and costs. Not only does it help to as- sure high-quality products, but there are fewer qual- ity issues such as recalls and supply chain shortages. Immense importance is placed on being transpar- ent and working as partners—these are relationships built on trust and longevity. It is therefore import- ant to ensure that all parties can financially benefit from working together. No one wins under unrealistic pricing demands. Quality equals sustainability Sustainable and reliable drug supply without inter- ruptions due to quality issues is an issue that must be addressed by the pharmaceutical industr y. The qualit y of life for most of the world's populations has never been better, yet shortages of essential and life-saving medicines continue to frequently occur. This problem existed long before the COVID-19 pan- demic and the war in Ukraine, and although these tragedies have exacerbated supply-chain issues, they are not the main cause of the long lists of drug short- ages that patients are faced with today. The root cause of the problem is the use of cheap APIs purchased from suppliers only interested in meeting minimum quality requirements and not committed to ensuring reliable supply of the best-quality products. Those suppliers are named in DMFs and registrations, making it dif- ficult for drug formulators to switch to alternative, more reliable manufacturers. When those suppliers inevitably have issues, shortages result. In essence, if all API purchasing decisions come down to the dollar as it is more frequently becoming the case today, then someone is going to get hurt, and in this case, it is patients. Healthcare reimbursement regimes and drug formulators must recognize that hunting for the cheapest APIs solely based on price is not only silly but short-sighted and plainly wrong. When purchasing APIs, working with quality products from dependable suppliers with the right cost-to-qual- ity ratio is always the right thing to do. Reference 1. Barlas, S. Are Hospital Prices a Bigger Problem than Drug Prices? P&T, 2019 44 (5) 259–299. ■ Sustainable and reliable drug supply without interruptions due to quality issues is an issue that must be addressed by the pharmaceutical industry.