From The Editor | May 1, 2020

Question Your Buyer Motivation And Supply-Chain Origins

By Louis Garguilo, Chief Editor, Outsourced Pharma


Don Buckner left a truncated reader’s comment to my recent editorial, Sign The "50 By 25" Declaration Of Drug Independence:

“Will have success if the buyers demand it.”

I was intrigued. I liked the sound of buyer-driven demand as the ultimate source for changing some supply-chain decisions – particularly related to offshoring.

Buckner is a born-and-bred Floridian with a life story worth a separate narrative, which I’ll capture for readers subsequently.

He’s not a practitioner within, or overly knowledgeable of, our drug development and manufacturing industry. Certainly not the contemplations that go into your identifying, selecting and working with CDMOs.

He does, though, know product development and manufacturing. He understands IP protection: he invented equipment for the telecommunications industry. He’s been a consummate and successful entrepreneur, having founded, managed, and sold companies.

BucknerBuckner was the Florida Entrepreneur of the Year; took a startup to the rank of 13th on the Inc. List of 500 Fastest Growing Companies; his book, “Circle Economics,” will be published this year.

In a phone call, he described what he means by buyer-driven demand as the method to alter the landscape for an industry’s supply chain.

That discussion guided me in the creation of two fundamental questions regarding readers’ outsourcing (buying) decisions and motivations. You’ll find them below. I hope you’ll spend some time answering them.

Basics Of Human Motivation

The coronavirus-intensified focus on the origin of drug supply chains is, says Buckner, “where our movement really takes effect, because we are in an education mode of trying to understand the motivation of every buyer.”

That movement is centered on Buckner’s organization and national trade show. (Last year’s inaugural show in Indianapolis drew national attention, including 13 episodes on Fox News’ Good Morning America.)  

“Every buyer [in our case readers contracting drug development and manufacturing services] has a different motivation,” Buckner tells me, then asks of us specifically:

“Is there also a patriotic motivation to support your country, and continue to provide jobs here? To protect the sovereignty of the country?”

Next, Buckner turns the table to look at the buyers of our drug products – patients in the U.S.:

“Is there a motivation to ‘buy American’ because we are the most environmentally friendly and regulated, and we respect worker and human rights? Is it because U.S.-based manufacturers pay a fair wage?”

I’ll add because of growing concerned with quality, and particularly cogent during this coronavirus outbreak, sustained availability and even national defense to a degree.

Nonetheless, Buckner like the rest of us, recognizes pricing will always be at least one key motivating factor for making a determination of a purchase.

“But,” he says, “clearly there are these other factors. You're seeing a lot of that now with younger generations: They like to buy from corporations that are socially responsible.”

“The idea is to find those other ‘buy buttons,’ and “then motivate corporations to line up with them.”

One button for all sides of the buyer equation, says Buckner, is focusing consumers on quality, reliability, “and also origin of products and how that origin speaks to them.”

And here is where pharma has shirked, by not informing consumers of the origins of their drugs or ingredients. (More on this below.)

Because of such current challenges, Buckner’s instituted an initial goal “to affect how 5% of the population buys.”

That sounds both reasonable and impactful. And very much like the goals set in our “50 By 25” construct, which in fact, drove him to leave us his reader’s comment, and tell me more by phone.

Don’t Tell, Don’t Know

“I’m a novice when it comes to your industry,” he starts, “but I can talk about awareness. The pharmaceutical industry’s default for years is to fight to keep origin-of-product off of your pill bottle or packaging.”

Buckner believes if patients and consumers were informed, they’d become a force for change, as would doctors, hospitals and pharmacies, those in the supply chain, and reaching the government.

“This would encourage all those entities involved to promote and support domestic production of drugs and medical supplies for motivations beyond pricing.”

“If the consumer [and patient] has the knowledge, I’m certain they will not be satisfied with their pharmaceuticals being made in China, or India, or elsewhere,” he adds. “It’s just not going to happen. It's a huge spotlight, or fuel on the fire, if you will, for changing this world in an expeditious manner.”

Answer Me This

Here are two fundamental questions, accompanied by quite a different set of potential answers (motivations), to help you further assess your buyer motivation in contracting outsourcing services.

Does this illustrate an accurate calculus? Only you can answer that. If it does, it tells us a lot about at least one, specific component of your outsourcing – the decision to go offshore.

(1) Why would you decide to work with a CDMO in, for example, China, over one in the U.S.?

a)      Lower cost of production/goods (labor, materials, etc.)

b)      The drug substance or product is intended for sale in China (or outside the West)

c)      There are no CDMOs in the U.S. who can do the work

d)      Environmental or other regulations in the U.S. disallow CDMOs here from doing the chemistry

(2) Why would you decide to work with a CDMO in the U.S. over, for example, one in China?

a)      Higher quality and supply reliability

b)      Closer to him, and more conducive to easy communication and on-site visits, audits, etc.

c)      Less geopolitical risk

d)      A feeling of (national/civic) support for the home country and workers

For years, I’ve insisted our sphere of drug development and manufacturing outsourcing was bound to hit the public spotlight. Unfortunate it had to be pushed there by a disease originating at the core of our supply chain concerns.  

Now we belong to a larger discussion of “supply chains,” one comprising national security as well as patient safety, human rights and worker conditions as well as quality.

Don Buckner may be just the type of person to help us think through all this.