Procuring Packaging And Delivery Systems: Single Versus Dual Sourcing

By Fran DeGrazio, Senior Industry & Technical Advisor, Drug Delivery Leader

Having monitored drug delivery industry trends for many years, I am often intrigued by those that seem, at least on the surface, to be “no brainers.” Especially in this age of heightened risk mitigation, a notable current example is the rise of dual sourcing as a strategy for procuring packaging and delivery systems for injectable products.

Of course, there are benefits to moving in this direction. From my perspective, however, instead of making dual sourcing an automatic decision, there should be a greater understanding of single versus dual sourcing so each biopharma product development company can make the right choice.

My aim here is to clarify the associated risks and advantages with respect to choosing one versus the other sourcing approach for diverse pharmaceuticals and biologics and to propose an alternative strategy for evaluation.

The Ascendency Of Dual Sourcing

Single supplier sourcing became popular years ago, largely thanks to W. Edwards Deming's teachings, a key part of which is his Total Quality Management (TQM) philosophy. TQM started gaining traction in the 1980s. From there, it increasingly permeated the pharmaceutical industry through reinforcement of concepts such as the FDA’s Quality Systems approach to Pharma cGMPs and the ICH Q10 guideline on Pharmaceutical Quality Systems. It was Deming’s belief that single sourcing was preferred to develop a long-term, mutually beneficial relationship with the company and its supplier.

In considering any sourcing strategy, it is helpful to first understand that sole sourcing and single sourcing are not identical concepts. Sole sourcing occurs when only one supplier is available for the product that is being procured. By contrast, in single sourcing, multiple options for suppliers are available; however, the procuring company chooses to work with only one of them.

For example, companies looking for suppliers of primary packaging will likely encounter multiple available component suppliers. The scenario is similar when looking for suppliers of injection delivery systems. For any delivery format (e.g., autoinjectors), there may be multiple suppliers although, ultimately, each supplier may be best suited for particular, perhaps even unique, drug product configurations and/or user needs.

In recent years, particularly in response to challenges posed by the Covid-19 pandemic, dual sourcing has been heavily promoted as an alternative to single sourcing. Dual sourcing involves engaging more than one supplier for a product or service and having more than one at the ready with a procurement process and agreement having already been established. This approach is advocated primarily due to its potential to enhance supply chain resilience.

So, how does a company decide which strategy best meets their needs?

Comparing Single Versus Dual Sourcing: Benefits And Risks

To set the table for our consideration of single vs dual sourcing, I am including a table. This one outlines the benefits and risks of each sourcing strategy. Below the table, I will comment on the implications.

Dimension	Single Sourcing	Dual Sourcing
Primary Benefits	Lower cost via volume leverage Simplified supplier oversight Tighter quality and tech transfer control	Improved supply continuity Competitive supplier pricing
Key Risks	High dependency on one supplier: single point of supply chain bottleneck or breakdown Greater impact from quality or cGMP failures	Increased complexity in qualification processes Potential variability across suppliers for product quality and GMP compliance Increased complexity in Supplier Management
Regulatory Impact	Simpler regulatory filings Single change-control pathway	Duplicate filings, change controls, and analytical testing during development and lifecycle Ongoing comparability management

In many instances, the procuring company may not have comprehensively evaluated all the potential benefits and risks of either approach before making a decision regarding the course of action. In cases in which a dual sourcing strategy is implemented, the decision to do so is typically led by the company’s purchasing / supply chain function or organization.

In my opinion, whichever sourcing strategy is chosen, especially a dual sourcing approach, the decision is a significant strategic one and should be made with input from multiple functions, including R&D, regulatory, quality and manufacturing, to name a few critical areas.

Mitigating Sourcing Risk

Risk management is an essential component of nearly any decision-making in today's environment. That is no different when selecting a sourcing strategy and the strategic supplier partners themselves.

When choosing packaging and delivery devices for pharmaceutical and biologic drug products, risk management offers a structured approach to evaluating whether single or dual sourcing is most suitable. The consideration of critical materials, i.e., those directly impacting the intended use, quality, and safety of the drug product, warrants a distinct perspective, one that may need to differ from how the procuring company typically views the  majority of products that are automatically dual sourced. Examples of these critical types of products are, for instance, packaging components that have intimate, extended contact with a drug or biologic product or, say, a delivery device that is critical to the dose accuracy of a drug or biologic to a patient.

Although perhaps controversial, I am recommending that such materials be single sourced to reduce risk, thus differentiating them from commodity products. I am defining a commodity product as one which does not have the direct potential to impact the drug product or patient. In that sense, its overall value to the end product is low. A representative example of a low-value type of product is a corrugated carton, which is easily interchangeable. The single-sourcing approach I am suggesting for critical products contrasts with current industry practices, where many companies prioritize dual sourcing, even for critical materials to maintain supply chain flexibility.

Of course, in any sourcing model, supply chain issues are a risk that always must be diligently understood. However, there are options other than dual sourcing that can provide the desired mitigation. For one, building a deep relationship with critical suppliers allows for improved understanding and should bolster mitigation of these risks.

When the component being procured is essential, the corresponding supplier also becomes a key partner. In such cases, it is worthwhile investing in nurturing the relationship to ensure strategic benefits can be realized by both parties involved.

Pharmaceutical companies benefit from better insight into supplier risks like supply chain and manufacturing details and may be able to influence mitigation at the source. Suppliers benefit from partnership enhancement, improved market and customer understanding, and increased future business opportunities.

Responsibility For Managing Product And Materials Supply

It is important to thoroughly understand the strategies available for managing the risks associated with single sourcing. Relying on a single supplier does not mean that all supply chain risk-mitigation responsibilities are transferred to the supplier.

For instance, knowing where raw materials are sourced, as well as the manufacturing processes and locations involved, is an essential responsibility of the biopharma organization. Identifying potential vulnerabilities in these aspects allows the company to address risks through options, including holding inventory, manufacturing at multiple sites, or using other methods such as understanding the supplier’s control strategies more deeply in an effort to influence potential mitigations of higher risk areas.

Additionally, when collaborating closely with one supplier, investment of time can lead to greater openness: the supplier may share unique information and actions rarely offered to standard customers or clients. This transparency could include details about raw materials sourcing or an improved understanding of capacity on the specific products which are being purchased.

When Dual Sourcing Becomes A Risk

A main concern, based on my experience, is when a product is critical to the overall safety and function of a drug or combination product. These are the types of products I contrasted with commodity products above. In such cases, the practice of dual sourcing actually becomes a risk unto itself. This is because, in most instances and especially with packaging components or delivery devices, certain attributes of these critical products will likely not be the same when purchased from two different suppliers.

These are aspects that one needs to evaluate deeply to understand. A Request for Proposal (RFP), which is quite often a starting point for identifying a secondary supplier, would never get into the detailed understanding needed to truly identify an equivalent packaging component or delivery device.

Variability In Products, Components And Materials

For instance, the procuring organization may encounter two chlorobutyl elastomer formulations utilized in syringe plungers sourced from different suppliers. While these products may initially appear equivalent, closer examination can reveal variations in their compositions. One formulation, for example, may contain extractable zinc ions, while the other may not — an important distinction when considering compatibility with biologic drugs.

Additionally, although the plunger configurations could seem nearly identical, it is essential to assess their actual dimensional tolerance capabilities, as such differences may significantly impact functionality and container closure integrity.

Similarly, variations in how glass components are manufactured can result in differences in their surfaces, chemical composition, and possible reactivity, even if they are both produced by tubing glass supplied by the same source. These details will not appear on technical data sheets or specification sheets.

Moreover, devices such as autoinjectors may differ in dimensional tolerances or spring forces, which can affect their reliability in use.

Final Considerations On Supplier Sourcing And Management

For either sourcing strategy, diligence is a must. Aside from a deep understanding of technical issues, as discussed above, an understanding of supply risk, quality, cGMP compliance, regulatory support, and suppliers’ business continuity plans all need to be considered.

In the case of dual sourcing, these represent several key considerations required when establishing a genuinely equivalent second source for essential items, such as packaging components and delivery devices. Ongoing oversight of both suppliers is necessary to ensure that initial assessments remain consistent over time. In many scenarios, the resources devoted to managing two suppliers may yield greater value if redirected toward fostering a constructive partnership with a single critical supplier.

Words to the wise: The process of dedicating time and resources to collaborating with suppliers and establishing sourcing strategies is often more complex than it initially appears. Carefully examining the specifics allows for informed decision-making rather than relying on consensus thinking.