Manufacturing &
Supply Chain

Manufacturing &
Supply Chain

Our vision is to be the most trusted and competitive supplier of pharmaceuticals, animal health products, vaccines and biologics to the world’s patients and customers.

Our company is committed to providing patients and customers with a reliable supply of high-quality, safe and effective medicines and vaccines. Our global supply strategy leverages both our internal manufacturing capabilities and those of external manufacturers that provide specialized skills, expertise and various types of manufacturing services.

We manufacture and package products that we distribute to more than 163 markets around the world.

Our facilities, along with our external contractors, suppliers and partners, make up an integrated, interdependent global manufacturing network that is committed to delivering compliant, reliable supply to customers and patients on time, all the time and every time.

OUR COMMITMENTS

  • We will maintain strict quality standards and effective supply-chain management to ensure the efficacy, safety and supply of our products no matter where they are manufactured
  • We will sustain an interdependent, flexible supply chain to take into account global and local market supply needs
  • We will engage and invest in local and regional partnerships to enable market access

Our product quality and safety processes and procedures are broad in scope and include stringent standards as well as compliance education and training. We also support industry and regulatory efforts to develop and optimize quality and manufacturing standards worldwide. Our commitments in this area are unequivocal, and are essential to our role as a global health care leader.

We seek to develop the capacity and capability to serve a significant proportion of the world’s population. Our manufacturing division has undertaken an ambitious program to reduce the cost of production by reducing underutilized capacity, increasing efficiency through Lean and Six Sigma projects at manufacturing sites, reducing procurement spending and improving supply performance, including on-time deliveries and the reduction of supply shortages.

We have entered into manufacturing and supply agreements with local manufacturing partners to broaden access to our products in local markets. We strive to forge relationships with partners that meet our standards for quality manufacturing and distribution, and today have 136 external manufacturing sites, 32 Corporate Alliances and 94 Regional Alliances that we engage with to provide access to our products.

We manufacture approximately 9,425 product size finishes, and in 2017 produced approximately 90 billion doses of animal health vaccines.

Our global supply-chain strategy is designed to ensure that we are operating a lean and efficient network while complying with rigorous quality, safety and environmental standards.

We remain committed to the development and commercialization of our products and to ensuring that we are a reliable global supplier of quality vaccines and medicines. In 2017, we launched new products in major regions with 22 filings and 10 launches with sustained supply. We are implementing continuous manufacturing for small-molecule products with planned submissions in 2019 and beyond.

We continue to optimize our manufacturing capacity for most vaccines, including, as appropriate, redundancy in our supply chain for certain vaccines, so that we eliminate supply disruptions when temporary issues arise in manufacturing.

In 2016 we launched our new “Manufacturing the Future” strategy to continue our mission of achieving world-class manufacturing and supply status by 2020: Delivering uninterrupted, unconstrained, highest-quality supply at the lowest cost and with the shortest lead times. In this strategy, we will maintain our priorities of compliance, supply, profit plan and people, embracing a mantra of “Safety First. Quality Always.”

There are five principal elements to the strategy:

  • Stability: Striving for safety, regulatory compliance and reliable supply
  • Responsiveness: Advancing agile end-to-end supply chains, best-in-class cost of goods sold (COGS) and working capital
  • Innovation: Demonstrating excellence in key technologies and novel approaches to operations and customers
  • Biologics: Building our large-molecule capacities and mind-sets
  • Diverse Talent: Developing new and enhanced capabilities in all Manufacturing Division people

In 2017 we received approval to have our facility in Carlow, Ireland, approved to fill GARDASIL®9 (Human Papillomavirus 9-valent Vaccine, Recombinant), our 9-valent HPV vaccine.

In addition, we remain on track to upgrade and expand our manufacturing operations. In Elkton, Virginia we are continuing our investment to upgrade plant infrastructure, add manufacturing-related facilities and equipment, and undertake a personnel-training initiative to support the bioprocessing environment. Specifically, we will be building a new biologics manufacturing plant to support KEYTRUDA® (pembrolizumab), an anti-PD-1 immunotherapy to help fight certain cancers.

We continue to focus on internal and external strategies that reduce cost and increase capacity to meet growing supply needs around the world.

Supply Challenges in 2017: Commitment to our Patients and Employees

Cyber Incident
In June of 2017, our company experienced a sophisticated cyber-attack that propagated rapidly through our environment, impacting global operations across research and development, manufacturing, commercial and corporate functions. Recovery from the attack was guided by a set of established priorities, founded on principles of maintaining patient safety and access, quality and regulatory compliance. The company used controlled shutdown of GMP plant utility systems to avert any safety incident for our 50 manufacturing sites affected in 21 countries serving 160 countries.

Within two days of the cyber-attack, the company had a view of our global inventory and within five days a prioritized production and shipment plan focused on medically significant, lifesaving, and priority products to begin shipping. We communicated with Regulatory Authorities, external manufacturing and logistics partners throughout the recovery process and enlisted their input to support patient supply priorities. All critical processes and systems were brought to a safe state, verified safe and restarted by the end of August 2017.

Hurricane Maria
On September 20, 2017, Hurricane Maria went across Puerto Rico from southeast to northwest with winds of about 155 mph (250 km/h) for an unforgettably long 18 hours.   The center of the hurricane passed extremely close to our company’s Las Piedras manufacturing facility and to several of our contract manufacturing partners causing flooding, and destruction to roads, housing and infrastructure. Immediate impact to Puerto Rico included 100 percent of the people on the island losing electricity, over 90 percent losing access to potable water, over 90 percent losing phone/internet communications, and widespread severe damage to the island’s overall infrastructure and property.

Our company immediately stepped in to provide support and supplies for basic daily living to current and past employees as well as employees of our external partners on the island. Charter planes were sent filled with water, food, basic medical supplies, and generators to be distributed to those in need on the island.

An emergency recovery team was put in place at our Las Piedras site to distribute much needed supplies to people impacted by the hurricane. In addition, technical resources were deployed to set up emergency communication systems and restart manufacturing capacity at the Las Piedras facility within weeks of the destructive hurricane.

Performance

MANUFACTURING & SUPPLY SUMMARY2013 2014 2015 2016 2017
Number of local and regional manufacturing partnerships to enable access68 104 179 179 153
Number of products available through local and regional partnerships354 499 1,157 941 765