Authors:
Head of Financial Planning & Analysis, Maria Malin and
VP of Supply Chain, Strategy & Transformation Operations, Rhonda Gates
At Abzena, we’re not just reacting to potential tariff changes—we’re striving to proactively reshape our supply chain strategy to thrive in a complex global market. In the current geopolitical landscape, and among recent discussions about tariffs on pharmaceutical products, our fully integrated, U.S.-based manufacturing model offers a strategic advantage, often delivering a 25% price edge over many international competitors. By leveraging domestic partners for sterile filling, lyophilization (lyo), and packaging, we effectively manage the entire supply chain within the United States—an approach that helps us minimize the unknown risks posed by global trade shifts. While pharmaceuticals were initially exempt, there is a possibility of significant tariffs on pharmaceutical imports, which could have profound implications for the global pharmaceutical industry and CDMOs with operations largely outside the U.S.
Below are the top five considerations that drive our approach to navigating these potential tariff challenges. From monoclonal antibody (mAbs) production to final drug product fill-finish and packaging, our “nationalized” supply chain strategy helps us reduce complexity and maintain resilience.
- Navigating Potential Cost Implications
Direct Cost Management
Tariffs could directly drive up the cost of imported raw materials and components. By integrating mAb production, conjugation, and drug product manufacturing under one roof—or in collaboration with our domestic partners—Abzena avoids potential cost escalations associated with offshore suppliers in tariff-prone regions. This structure reinforces our 25% price advantage and keeps us focused on proactively managing costs.
Controlling Indirect Expenses
Beyond headline duties, tariffs could raise customs brokerage fees, administrative costs, and logistics complexities. By centralizing operations within the U.S., Abzena helps minimize these possible indirect expenses and maintains a predictable, streamlined cost structure. This domestic-first model ensures steady operational agility and supports precise budgeting across all stages of the supply chain.
- Enhancing Supplier Relationships & Diversification
Strategic Supplier Partnerships
Potential tariffs highlight the risks of over-reliance on specific regions for vital inputs. At Abzena, we cultivate deeply integrated, long-term partnerships rather than mere transactional relationships. By engaging suppliers early and leveraging digital connectivity, we build a diverse network designed to respond quickly to changes in trade policies and geopolitical circumstances.
Integrated Manufacturing Advantage
While some CDMOs may only handle conjugation by importing mAbs, our holistic model covers everything from mAb production to sterile fill-finish and packaging. Eliminating reliance on multiple external suppliers could help reduce exposure to multiple tariff layers, further lowering risk while streamlining processes and costs. This positions us as a truly strategic partner to our customers, particularly in times of trade uncertainty.
- Strengthening Customs & Compliance
Staying Ahead of Regulatory Shifts
Tariffs could coincide with regulatory updates that complicate cross-border trade. Thanks to our U.S.-based infrastructure and robust compliance frameworks, Abzena can manage potential changes in documentation and country-of-origin rules without jeopardizing timelines. By focusing on a domestically anchored supply chain, we minimize the hurdles posed by shifting international regulations.
Streamlined Digital Processes
We incorporate digital tools and real-time analytics to efficiently manage customs operations, documentation, and distribution. This integrated approach optimizes our workflows, ensuring prompt clearance at every stage of the process.
- Proactive Risk Management & Contingency Planning
Strategic “What-If” Scenarios
Because the tariff landscape is inherently unpredictable, we continually work to model various scenarios to better gauge impacts on inventory, lead times, and costs. These simulations inform decisions about how to allocate resources, where to place safety stock, and how to plan manufacturing activities—even if market conditions shift rapidly.
Resilient Inventory Strategies
Potential tariff-induced disruptions could be mitigated by strategic inventory allocation. Abzena’s commitment to nationalizing our entire supply chain—from mAb production through final drug product manufacturing—facilitates efficient, forward-looking inventory management. This ensures production continues smoothly, even if external factors become volatile.
- Driving a Holistic Supply Chain Transformation
Optimizing the Entire Value Chain
Tariffs could be a catalyst for rethinking and optimizing the entire supply chain structure. Abzena’s domestically focused model—encompassing everything from mAb development to sterile filling, lyo, and packaging—could reduce tariff exposure, improve timeline predictability, and preserve our competitive pricing advantage. This comprehensive approach stands in stark contrast to more fragmented models reliant on outsourced components from countries vulnerable to tariffs.
Embracing Synergistic Partnerships
We collaborate closely with logistics providers, technology vendors, and strategic suppliers to create a “nationalized” network that can pivot swiftly. This synergy not only addresses possible tariff challenges but also drives the kind of innovation that expedites high-quality therapies to market—ultimately benefiting patients.
Conclusion
In an ever-shifting trade environment, potential tariffs need not be purely a threat; they can also serve as an opportunity to innovate and strengthen operational resilience. At Abzena, our commitment to a fully integrated, U.S.-based approach brings together mAb production, conjugation, sterile filling, lyophilization, and packaging, helping us stay ahead of uncertainty. By concentrating on cost management, cultivating strategic partnerships, prioritizing robust compliance, proactively managing risk, and embracing holistic supply chain transformation, we’re leading the way in turning tariff-related complexities into competitive advantages.
Ready to streamline and secure your entire drug development supply chain?
At Abzena, we’re dedicated to ensuring that agility, innovation, and performance remain front and center—so you can focus on delivering transformative therapies to patients, confident that your supply chain is optimized, future-focused, and ready to adapt to whatever could lie ahead.
