Sumitomo Dainippon Pharma Annual Report 2017

Production and Quality ControlAt Sumitomo Dainippon Pharma, our greatest mission as a pharmaceutical company is to provide a stable supply of high-quality pharmaceuticals made in fundamentally sound, safe operations. In order to fulfill this mission, we perform inspections at multiple stages for every lot of each product, verifying the quality of materials at all stages of the manufacturing process from receipt of raw materials through the final inspection of products to be delivered, to determine if the qualities are adequately kept and if the products have been manufactured according to the Pharmaceuticals, Medical devices and Other Therapeutic Products Act of Japan and Good Manufacturing Practice (GMP)*1. Only products that have passed all of these inspections are shipped.We have built a stable supply structure for products, which are manufactured at four plants in Japan—in Suzuka, Ibaraki, Ehime and Oita—and also in collaboration with contract manufacturing partners in Japan and other countries. We have worked hard to increase the precision of our production plans by strengthening collaboration between the Manufacturing Division, Sales & Marketing Division, overseas subsidiaries, and business partners. We have also made proactive efforts such as double sourcing of active pharmaceutical ingredients and optimizing selection of formulation and packaging sites. To further strengthen our competitiveness, we work to improve cost efficiency, including review of spending, as well as actively striving to increase productivity in our factories such as by reducing lead times.Dainippon Pharma continuously and systematically promotes measures to prevent interruption of its supply of raw materials, including the use of multiple suppliers, taking alternative materials into consideration and maintaining appropriate inventories.In fiscal 2016, we promoted a review of production strategy accompanying the global expansion of our main products and the reorganization of our production sites.To conduct fair, open and transparent transactions, Sumitomo Dainippon Pharma concludes basic agreements on transactions with business partners, complies with relevant laws and regulations including the Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors, and continuously evaluates business partners.In our overseas procurement, we work to preempt problems before they occur by building deeper relationships of trust through smooth communication with overseas business partners and trustworthy procurement activities.Establishment of a Stable Supply SystemTo further strengthen our stable supply system, we will continue to reinforce our global supply chain based on the progress of globalization, including the overseas procurement of raw materials and pharmaceutical intermediates and manufacturing at overseas plants.To ensure the stable and sustainable procurement of the raw materials and other items used for its products, Sumitomo Strengthening the Global Supply ChainOur east and west Japan distribution centers are located in Kobe (Hyogo Prefecture) and Kazo (Saitama Prefecture), respectively. This network allows us, fundamentally, to deliver products to our pharmaceuticals wholesalers within 48 hours of receiving an order (or within 24 hours for neighboring regions). Additionally, in order to maintain stable supply during emergency situations such as natural disasters, we have been working to enhance our business continuity plan (BCP).Furthermore, in fiscal 2016, we continued initiatives aimed at developing a Good Distribution Practice (GDP)*2 system based on our company-wide GDP guidelines formulated in fiscal 2015 as a response to our global expansion.Strengthening the Distribution SystemWe provide a stable supply ofproducts based on even morerigorous quality controls.*1 Good Manufacturing Practice: A standard for managing the manufacturing and quality of pharmaceuticals and quasi-pharmaceuticals.*2 Good Distribution Practice: A standard for proper distribution of pharmaceuticals.29Sumitomo Dainippon Pharma Co., Ltd. Annual Report 2017

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