Sponsored by Blue Jet Healthcare, this panel at CDMO Live Europe 2026, brought together Bernhard Boehm, Head of External Manufacturing Animal Health, Boehringer Ingelheim; Philip Coetzee, Director CMO Management, Daiichi Sankyo Europe; Fanny Eberhardt, Director Global Procurement, UCB; and Shiven Arora, Managing Director, Blue Jet Healthcare to debate how pharma companies are making network strategy decisions as cost pressures, geopolitical risk, and the limits of tech transfer collide.
Pharma companies are pulling their supplier networks in three directions at once: consolidating for efficiency, regionalizing for resilience, and adding dual-source coverage against geopolitical disruption. The problem is that all three cost money, all three take time, and product transfers require two to five years, regardless of what is happening in the world outside. This session opened with that central tension and did not resolve it neatly.
Philip Coetzee, Director CMO Management at Daiichi Sankyo, set the frame by arguing that the industry is discussing geopolitics in too narrow terms. The real pressure, in his view, is not tariffs or individual conflicts but the hardening of two competing blocs. “You have on one side America, on the other side you have BRICS,” Coetzee said, “and if you actually analyze the wars and the threats, you will see that they are all positioning themselves towards resources.” For European companies sitting between those blocs, he argued dual sourcing must be designed not just for supply continuity but to allow supply into both markets. He was blunt about Europe’s current position:
“I think it is tossing a coin to see if we’re well positioned or if we’re pulling by the tail.”
Managing the Tail End
Bernhard Boehm, Head of External Manufacturing Animal Health at Boehringer Ingelheim, described what network strategy looks like when you manage over 120 external partners across APIs and finished products on five continents. He explained that network strategy must be treated as a whole, covering internal and external manufacturing together, and that it requires continuous recalibration rather than a fixed plan. “It’s basically changing all the time,” Boehm said. “Short-term reactions are neither possible, nor personally I would advise doing so.”
When it comes to deciding where to invest in redundancy, Boehm uses two filters: patient supply security for essential medicines and sales impact. Both factors apply on the SKU level, and both can drive dual-sourcing requirements that would not be justified on a purely commercial basis.
His framework for prioritizing action is built around understanding the tail end of the portfolio. Boehringer Ingelheim cut its external partner count from more than 250 to 120 over seven years, and Boehm was clear that even 120 is still too many. Progress is managed through a board-level annual review process, fed by ongoing evaluation from global supply, and assessed against contribution margin, cost, complexity, and 10-to-20-year forecasts. “If you don’t do it like this,” he said, “you will never get anything pruned.”
Procurement’s Lens: Total Cost of Ownership and Sustainability
Fanny Eberhardt brought a procurement perspective that challenged the assumption that regionalization and cost control are in direct conflict. Her argument was that pharma companies routinely undercount what global supply actually costs. “If you take the example of tablets you are going to manufacture in Europe but you are going to sell in the US,” she said, “what is really the incentive to do your packaging operation in Europe?” Her answer: none, once you account for total cost of ownership across the full supply chain.
Eberhardt pushed back on the tendency to drop sustainability considerations when the pressure is on. At UCB, environmental commitment is now embedded in sourcing criteria, with SBTi engagement and Equivadis membership treated as near-mandatory supplier qualifications. “It is a kind of almost a “no-go” to deal with somebody who is not engaged in SBTi,” she said.
She also highlighted the emotional complexity of consolidation decisions. Portfolio rationalization triggers internal politics, legacy product attachment, and questions about responsibility toward supplier workforces. UCB has created a dedicated team to manage these decisions outside of the normal organizational structure, with a remit to stay fact-based.
Coetzee continued, “Emotion is part of us as humans, but it is not part of business.” The test for any CMO relationship is whether it is delivering to the company’s bottom line. If it is not, the decision has to be made. His rule for consolidation timing: patent-protected blockbusters stay dual-sourced; once a product goes off patent, consolidate to a single CMO to reduce transfer cost and management complexity.
The CDMO Perspective
Shiven Arora, Managing Director of Blue Jet Healthcare, offered the view from an Indian contract manufacturer that is currently in the largest capital investment cycle in its 60-year history. He distinguished between two types of demand signals his company receives: reactive requests triggered by supply disruptions, which he described as “panic calls,” and strategic engagements from sponsors who arrive with a plan, evaluate business continuity and product lifecycle, and are willing to explore co-investment models. Arora’s preference is clearly the latter. He argued that once co-investment relationships are established, Blue Jet’s response is to offer dual-site validation at cost, treating depth of partnership as the actual supply resilience mechanism rather than simple multi-sourcing.
Arora drew a cross-industry comparison to make the consolidation trend concrete. Tier-one supplier counts in automotive have already contracted sharply, and he sees the same structural pressure arriving in life sciences. His closing advice: “Network strategy should be built not just for the next quarter or the next year, but for the next disruption.”
Takeaways
- Total cost of ownership across the full supply chain, including packaging location, often justifies regional manufacturing decisions that look expensive on a line-item basis.
- Portfolio pruning only succeeds with board-level mandate. Bottom-up approaches stall against commercial and country-level resistance.
- Distinguish reactive requests from strategic RFIs: suppliers who arrive with a plan and evaluate co-investment are more likely to build durable partnerships.
