Resilience Over Savings: Pharma’s New Manufacturing Playbook for Turbulent Times

At CDMO Live 2025 external manufacturing leaders from Bayer, Boehringer Ingelheim, and Leo Pharma revealed how pharmaceutical companies are adapting their manufacturing networks amid growing global uncertainty.

The panel, sponsored by Blue Jet Healthcare, highlighted portfolio complexity and geopolitical tensions emerging as dominant challenges of 2025.

The Complexity Conundrum

Portfolio complexity topped the list of challenges for several panellists. Malik Akhtar, VP of procurement for Bayer Consumer Health, highlighted the scale of the issue: “We have within Bayer Consumer Health over 5,000 SKUs. About half of those are internally supported. About half are externally supported.”

This complexity is driven by two factors, according to Akhtar: “We have some of the portfolio is very old, so we don’t really, honestly know how we make it, but it works. And then at the same time, we have very enthusiastic and productive commercial colleagues that want to add to the portfolio regularly and often.”

Bernhard Boehm, head of external manufacturing for Animal Health at Boehringer Ingelheim, faces even greater product complexity for different species of animal. He emphasised another critical challenge: “One of the key challenges also to create and manage resilient, robust supply chains in the face of all the changes which are happening.”

Geopolitical Uncertainty Reshapes Strategy

Kristina Kölerud, senior director of external manufacturing for Leo Pharma, identified global uncertainty as her primary concern. “It’s just getting more and more with the geopolitics going on in the world, the wars and the turbulence. So I think right now it’s, of course, all these discussions around tariffs around the world.”

Shiven Arora, managing director of Blue Jet Healthcare, highlighted a striking statistic: “According to industry report, 62% of pharma companies worldwide are relooking at their manufacturing footprint from a sourcing standpoint. I think that’s an incredible number. And I think in today’s day and age, resilience is becoming as important as costs.”

Different Approaches to Risk Mitigation

Companies are taking varied approaches to building resilience. Boehringer Ingelheim, as a family-owned company, takes a particularly long-term view. “We have always tried to set up our supply chains in a way that they are really long term and as resilient as possible,” explained Boehm. The company has established dual sourcing for key active ingredients, maintaining both Chinese and European suppliers despite higher costs.

Leo Pharma faces different constraints, as Kölerud explained: “We can’t really afford to be dual source if we have small volumes and the cost to maintain dual sourcing and split the volumes.” Instead, she emphasised the importance of selecting the right partners: “What you can do with the right partner in driving down cost, continuous improvements and overall costing may override also some of that.”

Regional Diversification Takes Centre Stage

Bayer’s Project Martini initiative exemplifies the trend towards regionalisation. “We embarked a long time ago on a drive to go region for region,” said Akhtar, explaining how Bayer is moving from its historically European-focused network to establish supply in North America.

Arora noted that this shift is already visible in sourcing patterns: “The US sponsors have increased the intermediate outsourcing from India by about 40% in the past 24 months. I think this is not a temporary shift. It’s in a very big way, a network diversification in motion.”

AI and Digital Transformation: Early Days but High Hopes

While all panellists acknowledged AI’s potential, implementation remains in early stages. Leo Pharma is “really excited about it,” according to Kölerud, focusing initially on document management and information gathering, with plans for system integration and data sharing with external networks.

Boehm emphasised the importance of careful selection: “There’s huge potential. I have no doubt. The key question for me is, what makes sense and in which areas does it really add value?” He highlighted contract management as one promising application, noting the challenges of managing contracts “25 years old” where companies “don’t even know the details.”

Blue Jet Healthcare is already implementing AI for predictive maintenance, demand forecasting and deviation analytics. “The earlier we adopt, the better it is for all of us,” Arora stated.

Sustainability: Important but Not Top Priority

While all companies have net zero commitments, sustainability’s priority varies. “It’s fair to say it’s not the highest priority at the moment, but it’s still very much a consideration,” admitted Akhtar, who focuses on aligning sustainability with other objectives like regionalisation to reduce carbon miles.

Boehm took a more bullish stance: “It’s gaining importance… it requires investments now, but it will pay off later.” He positioned sustainability among the top five selection criteria, noting that companies serious about sustainability “usually also are the ones who care about quality and who care about customer relationships.”

Kölerud agreed, adding a practical perspective: “Normally, also for scope three and API, it’s a lot about solvents, chemicals. So to do the recycling, use less, I think in the end, is going to be cost beneficial.”

Key Takeaways

• Portfolio complexity remains a fundamental challenge, with companies managing thousands of SKUs across internal and external manufacturing
• Geopolitical tensions are driving significant network restructuring, with 62% of pharma companies reassessing their manufacturing footprint
• Regionalisation and dual sourcing strategies are becoming standard, though implementation varies based on company size and volume
• AI adoption is progressing cautiously, with focus on practical applications like contract management and demand forecasting
• Sustainability is increasingly important in supplier selection, viewed as both an ethical imperative and long-term cost reduction strategy
• The industry is shifting from pure cost focus to balancing cost with resilience, with one panellist noting that “resilience is becoming as important as costs”

Download the full CDMO Live Report for summaries of all the talks at CDMO Live 2025: