The diagnostics industry’s critical response during the COVID-19 pandemic has driven new ways of working with respect to product development and manufacturing. Necessary departures from standard industry practices over the last year are now laying the groundwork for new best practices moving forward.

There will likely be enduring impacts on both product development and manufacturing as the diagnostics industry leverages the lessons learned and “silver lining” benefits arising from the response to the SARS-CoV-2 virus global spread.

Three trends we see emerging include the acceleration of development timelines, greater emphasis on the supply chain and new strategies for flexible manufacturing of diagnostic tests.

1. Accelerated product development is here to stay

Following characterization of the COVID-19 outbreak as a public health emergency, the US Food and Drug Administration (FDA) sanctioned an emergency use authorization (EUA) directive for medical devices to address the spread of SARS-CoV-2. It appears that some of those regulatory changes may become accepted policy for product development review and approval going forward.

FDA Commissioner Dr. Stephen Hahn told the Medical Device Industry Consortium that many changes made at the onset of the COVID-19 pandemic will become permanent.

As cited in a June 2020 Medical Design & Outsourcing article, Hahn said, “Let’s keep those (pandemic-era changes) in place as we move forward beyond COVID-19.” Hahn added, “What are the things that we can change from a regulatory practice and procedure point of view to continue to accelerate medical product development outside of COVID-19 so the lessons learned about what worked and what can be improved can be applied to the future?”

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Compressing timelines from years to months

In order to meet EUA timelines, companies had to radically alter their traditional approach to product development. Diagnostics manufacturers were tasked with accelerating the process timeline from product definition through transfer to manufacture, compressing what would normally take two to three years into months.

To rally product development teams around the challenge at hand, some organizations – including us at Invetech – looked outside of the industry for inspiration.

Gerald Kent, Invetech’s Vice President, Cell Therapy & Diagnostics, cited leveraging NASA’s Project Apollo as one case study used to establish a project framework. “Here is an example where a leader created a very clear vision of the future around which everyone could align, where failure was not an option. They were able to achieve extraordinary things, landing the first humans on the moon.”

Some new and evolved practices employed include upfront risk assessments to weigh tradeoffs against a faster time to market and putting mitigation strategies in place from the start. Benefits have also resulted from applying an agile project governance structure to enable rapid decision making and support creative problem solving.

We have also used hyper-rapid iteration to arrive at a Minimum Viable Product (MVP) for an initial market roll-out to meet accelerated timeframes, followed by downstream improvements. Kent described this as an approach out of the Apple product development playbook, optimizing time to market for launch followed by product updates post-introduction.

Given the outcome of delivering a successful product in significantly less time, a number of these development approaches are likely here to stay.

2. The role of supply chain has been elevated

Early in the COVID-19 outbreak, the US Federal Emergency Management Agency (FEMA) established a Supply Chain Stabilization Task Force to address the limited supply of critical protective and life-saving equipment. This was driven by a recognition of the significant impact of global supply chain breaks on meeting projected demand.

Supply chain challenges also severely impacted the efforts of many organizations working on the front lines of diagnostic testing and vaccine development. Suddenly the value of a robust and responsive supply chain became abundantly clear.

Changing supply chain policies

While drug manufacturers are required to report shortages to the FDA, there currently is no corresponding reporting requirement for medical device manufacturers. However, the FDA is asking device manufacturers to voluntarily report any issues and has established an email address specifically for reporting device shortages.

In an FDA press release on COVID-19 supply chain policies, Commissioner Hahn described mandatory device reporting recently proposed to Congress, including requirements that “firms notify the agency of an anticipated meaningful interruption in the supply of an essential device” and that “all manufacturers of devices determined to be essential . . . periodically provide the FDA with information about the manufacturing capacity of the essential devices they manufacture.”

Shifting from fundamental to strategic

On the commercial front, while supply chain operations were always deemed fundamental, they weren’t necessarily seen as strategic prior to the COVID outbreak. However, given the paradigm shifts with compressed development timelines, multiple manufacturers suddenly had to grapple with securing similar materials as necessary project components.

To improve their internal processes, medical device companies have been tapping into other market segments known for complex supply chain management proficiencies, such as automotive and high-tech manufacturers, for lessons learned and guidance.

Leveraging consultants with experience in high volume manufacturing can also greatly build on existing internal processes. Invetech’s Kent says the key is to focus on bringing in people who understand how a volume supply chain interacts with an accelerated development process and rapid launch.

At Invetech, we were able to leverage the global supply chain expertise and existing commercial relationships of our parent company, Fortive, to ensure alignment across the supply chain.

Ensuring a robust supply chain

Another trend underscoring the need to think differently and more strategically about supply chain operations is the growing prominence of the Chief Supply Chain Officer.

With the myriad of challenges posed by responding to COVID-19, business leaders are recognizing that a robust supply chain can reduce risk, provide cost savings, support innovation and allow companies to quickly respond to demand fluctuations.

Kent explains that the supply chain should be considered an integral part of a broad product development ecosystem, working in concert with the technical team to ensure that procurement is aligned with the product development timeline.

He says, “Traditionally, we have concentrated on developing technologies, and then integrating those technologies into manufacturable products. When faced with the need to rapidly develop a commercial product, we needed more rigor upfront when it came to manufacturability to meet both the volume requirements, but also, to maintain reliability. For that, we were able to leverage expertise from the Australian automotive sector to consistently provide input to design iterations.”

3. New strategies for flexible manufacturing are emerging

Typically, there has not been a lot of excess IVD manufacturing capacity to handle a COVID-19-like demand surge. This has created a situation where companies need to figure out how to address fluctuations going forward, fostering new ways of achieving flexible manufacturing options.

Balancing ramp-up with long-term demand

Building out manufacturing capacity requires significant investment, presenting tough decisions in balancing a production volume ramp-up versus the potential risks with uncertain long-term demand. Given the costs of scaling all levels of the manufacturing process, strategic investments can allow for buildouts to be sustainable.

One approach is to scale manufacturing as volumes grow, launching with a largely manual line at lower volumes and gradually implementing automation and inventories to support higher volumes.

Another approach being taken to increase agility within manufacturing is improving operational efficiencies however possible. Increasing the number of manufacturing shifts and expanding from a five-day to a seven-day production schedule have provided short-term flexibility to meet demand forecasts.

Other longer-term options include selective investments to add manufacturing lines at existing plants and process automation or robotics for core operations. Manufacturers are also investing in building workforce skills to support those facilities changes – creating employee pools, cross-training, upskilling and establishing access channels to technically-enabled temporary workers.

Getting creative with strategic partnerships

Since contract manufacturers with the requisite ISO qualifications are in short supply, companies are getting creative with strategic partnerships to help them address product forecast fluctuations. Alliances with suppliers, channel partners and even customers can help in meeting demand swings, providing near-term technical relief.

Just as medical device companies are seeking supply chain guidance from outside the healthcare industry, some have also taken it to the level of leveraging capacity and expertise for actual manufacturing. For example, GE Healthcare began collaborating in March 2020 with Ford Motor Company to scale ventilator production, with Ford providing technical and production expertise to support simplified design builds.

Similarly, in April 3M entered a partnership with the global power leader Cummins Inc. to increase its respirator filter production with a view to double current rates.

With continued demand for SARS-CoV-2 tests, cross-industry collaborations may provide an attractive flexible manufacturing option for diagnostics companies as well.

Localizing manufacturing

Another trend influencing post-pandemic business strategies is a “make where you sell” manufacturing approach.

Prior to COVID-19, geopolitical and market forces had already begun impacting where and how companies were addressing their production needs. Given recent experience, this concept has started gaining more consideration.

While sourcing within a certain region is not always possible and may slightly increase costs, added expenses can be offset through more efficient, guaranteed delivery to the market.

Localized production also allows for operational flexibility through the ability to shift manufacturing in response to external company events.

Rising to the challenge

Rising to the SARS-CoV-2 challenge has become the global imperative of our lifetime. It has tested our mettle and resolve on every front. It has also been a testament to what can be achieved when faced with crisis.

Collectively the healthcare industry has risen to deliver COVID-19 medical solutions across prevention, treatment and diagnosis, developing effective products in record time.

Processes put in place to achieve these outcomes are likely to evolve into best practices, especially as COVID-associated demands continue.

Abbott CEO Robert Ford stated during a Q2 2020 earnings call that COVID-19 test volumes won’t dissipate any time soon, expecting use levels to remain high for the foreseeable future. He predicted an overlap of continued testing of symptomatic patients with broader testing of asymptomatic patients as vaccines roll out, followed by continued surveillance to monitor and track vaccine protection.

More robust, strategic supply chains that can respond quickly to all levels of product development and manufacturing will enable diagnostics companies to shift and adapt going forward. Changes supporting compressed development timetables will likely also remain, delivering successful product innovations with speed and agility.

When the next healthcare crisis hits, the industry will be ready.

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