4 Takeaways from the COVID-19 Outbreak for the Pharmaceutical Supply Chain

supply chain

The appearance of SARS-CoV-2 and the ensuing global pandemic sparked concerns that the worldwide and extended pharmaceutical supply chain will collapse. It has proven incredibly robust in actual use, with medicine shortages remaining quite low.

Nonetheless, the epidemic has revealed several supply chain flaws that must be addressed as the globe heals and prepares for the future.  

Typically, lead periods are four to six months, perhaps more, guaranteeing some short-term resilience. But as Medical Supplies Sydney states, if bottlenecks in raw material or API production extend longer than two or three months, the global medicine shortage may be catastrophic over the next several months.

The worldwide supply of medicinal items is in considerably greater danger. The global PPE crisis has shown the difficulty of satisfying demand when the supply chain is unprepared and the difficulties of rapidly increasing production and supply in response to a sudden, significant increase in demand.

Here are four important takeaways from the COVID-19 epidemic for the benefit of the whole pharmaceutical and medical goods industries:

Excessive Dependence on a Small Number of Suppliers

As with many other industries, the pharmaceutical industry has turned a perceived weakness into a competitive advantage. This is also true for companies like Yourway, an integrated biopharmaceutical supply chain provider. 

The pharmaceutical industry’s disproportionate dependence on China and India for essential components like raw materials and active pharmaceutical ingredients (APIs) and, increasingly, completed the COVID-19 outbreak did not reveal goods.

What it has done is drive home the dangers of over-reliance in the face of a worldwide pandemic. Even though the United States and Europe produce most of the world’s active pharmaceutical ingredients, China and India’s combined market share is larger, and India is the world’s biggest generics maker.

There will be actual consequences farther down the supply chain if these markets are seriously disrupted. Realizing that this influence is not necessarily the result of direct disruption is illuminating.

To prevent shortages in the country, the government of India, for instance, briefly banned the export of some generic medications.

COVID-19 has proven how critical these supply chain risks are and how crucial it is for pharmaceutical companies to have diverse supplies scattered across different areas, enabling them to quickly relocate production from highly affected to lesser impacted nations. 

The Relevance of Supply Security at the National Level

supply chain

Global leaders and authorities have been alerted by the epidemic to the continuing industry drive in the United States and Europe to rebalance the supply chains for pharmaceuticals and medical products. In reality, this pattern has persisted for a while now.

The European Union and the United States Congress have discussed the problem and made modest steps toward passing legislation to correct the imbalance.

Both regulatory agencies have been transparent about protecting the global pharmaceutical supply chain from the risks associated with depending too much on a single geographic location for key raw materials and active pharmaceutical ingredients.

For a Supply Chain to Be Resilient, It Must Introduce Greater Complexity

Integrating various companies within the medical supply chain has led to the widespread use of the phrase – uniquely complicated.

The increased demand from governments and regulators and the requirement to rapidly decide amongst suppliers in multiple markets and regions will add complexity when other businesses seek to streamline their supply chains.

Some businesses have added complexity to their supply chains by bringing in two or three more suppliers. In contrast, others have begun to connect their supply chain with suppliers and consumers more deeply.

However, laws like the Drug Supply Chain Security Act (DSCSA) complicate how businesses interact with suppliers, wholesalers, and shippers.

Even though the DSCSA has granted certain waivers to cope with the COVID-19 emergency, robustness is still necessary to fulfill track and trace, monitoring, and licensing requirements.

For the pharmaceutical industry to be this resilient, it must work harder and smarter to digitalize all aspects of the supply chain fully. For a company to be agile, supply chain visibility must be improved.

Final Thoughts

COVID-19 exemplifies the quick thinking and adaptability of modern businesses. Several examples of pharmaceutical corporations rapidly retooling production to meet surging demand. The capability to repurpose it demonstrates a blueprint for future company agility.

However, more than finding capacity is needed to speed up product creation and manufacturing. Resources in engineering, design, production, and distribution are also needed. It is crucial to see how things are made and where they are being delivered from beginning to finish. 

The capacity to track and trace product – from ingredients to finished product – as it goes down the supply chain is facilitated by real-time production monitoring systems and improved planning and scheduling tools in manufacturing.

A comprehensive enterprise platform will be required to facilitate the real-time flow of information and transactions between the firm and its suppliers, customers, and partners.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.