“We intend to make money with sustainability,” says Alexander “Xander” Wessels, new president and CEO at DSM Pharmaceutical Products. He and his company have a history of leveraging sustainability—not just as a good idea, but as a business driver and competitive advantage in pharmaceutical contract manufacturing. In this interview, Wessels talks with PharmaManufacturing.com Senior Editor Paul Thomas about why sustainability matters, and how sustainable practices can become part of a drug manufacturer’s genetic makeup.
(Editor’s Note: Listen to the audio version of the interview here.)
P.T.: There are a number of major trends, as you know, shaping pharmaceutical contract manufacturing today—emerging markets, global supply chain issues. What do you see as the greatest challenges for DSM Pharmaceutical Products in the next few years?
A.W.: I'd say most of the challenges that we face as DSM Pharmaceutical Products are the same that the whole industry is facing. It's a massive change of the whole business model, of the traditional pharma business model, particularly for those CMOs [in] regulated markets. The fact that the pressure on health care costs, the pressure on the patent cliff, the upcoming of generics, are all leading to huge pressure on the total value chain, and also the dynamics of the pharma market. As a consequence, the CMO market is massively changing.
What we see as a challenge is to make sure that, in this changing landscape, we get our fair share of the opportunities that will come as we see many more of the large pharma companies outsourcing part of their supply chains.
P.T.: So I guess that you would see those challenges as opportunities as well, then?
A.W.: Yes. We certainly see the opportunities. We are also engaged quite deeply with our customers—large pharma, mid-size pharma—on how to address this challenge on the total value chain. And often it means innovation beyond, let's say, the classical innovation on product, but more on the supply chain, on the value chain, on close cooperation, on co-innovation. There are a number of things that we'll do quite differently than they were done in this industry in the past.
P.T.: You spent a lot of time in the food industry, of course—most recently as CEO of DSM Food Specialties. What things did you see there that might give you a unique perspective on pharma and help you to anticipate some of these trends?
A.W.: I think if you look to the nutrition and food industry, some of the pressures that the pharma value chain feels right now we had already seen in those value chains, say, twenty years ago. And as a consequence, you see that some of the business models there have changed. What typically would be different compared to the pharma world is a very high degree of open innovation, supply chain integration, cutthroat competition. So there was a value system that was already under lots of pressure—a kind of live-and-let-die environment, and therefore quite cost-conscious.
One also has to say that there are similarities: Supply chains, particularly in nutrition and food, have become increasingly global like they have in pharma, with all the associated consequences of that—regulations and risks. And a number of the things we've seen in nutrition and foods we've seen in pharma as well—longer supply chains, different local legislations—also demand a kind of control mechanism to ensure optimal product quality.
And there's a lot that we are actually taking from DSM internally from our nutrition and food experience. In nutrition, we've built the Quality for Life seal focused on quality, on sustainability, on traceability of ingredients, to give our customers the guarantee of these elements while the supply chain is becoming increasingly international rather than regional [as] in the past.
P.T.: It's interesting that you mention risk and quality. As you know, pharmaceutical executives are being held much more accountable for what happens in terms of overall quality of products and what's happening in manufacturing. Do you see this as a positive trend? Does it make you approach your work any differently?
A.W.: Well, we certainly see it as a positive trend. As a company that is dedicated and well reputed for quality, it's like a driving principle; it's more or less in the genes of the company. We do believe that this accountability, and as a consequence, the creation of a more level playing field, certainly will work in our favor and all those that are committed to really drive quality across the supply chain.
P.T.: You mention accountability, and it’s one of the things that is driving a lot of corporations, especially in our industry, towards sustainability and sustainability initiatives. Of course your parent company, Royal DSM, has a history of emphasizing sustainable practices, and DSM Pharmaceutical Products does as well. How do you really assess the business benefit of your sustainability initiatives?
A.W.: As you are aware, in DSM we formulated a new strategy about half a year ago, becoming a life science and materials science company. And clearly, let's say, one of the pillars underneath that is to focus on sustainability—not only as good corporate citizenship, but really as a business driver. And that is, I think, a difference from a number of other players in the industry. We consider it really a business driver.
Our commitment to sustainability is extremely high, but particularly from a business perspective. We intend to make money with sustainability. Now, in the pharma industry, of course, there is no general answer—like, is [sustainability] well applied? What we do see, though—let’s say, with our green chemistry toolbox, with [some] of the routes that we're developing based on enzymes—is that there's quite some interest with large pharma to look to what at they would call more greener routes to new medicine.