The COVID-19 pandemic revealed a structural weakness in many products’ supply chains. In terms of supply of pharmaceutical products, supply shocks were not mitigated when intermediates or production capacity for drug products suddenly became unavailable. In retrospect this is not surprising, as historically supply chains are not designed robustly enough to withstand regional lockdowns. This was already the case before the global pandemic shortages occured, but was at the time more related to commercial factors.
One of the major risks that has become clear is having a complex supply chain that spans multiple regions in the world. Essentially if any one region experiences production disruption, the complete chain stops functioning. In the pharmaceutical industry it is not uncommon to have supply chains spanning China, India, Europe, and the US making this very vulnerable to regional interruption.
In Europe, as well as in the US, politicians are therefore proposing to reestablish, or onshore, production chains back to the Western world to reduce dependency on remote regions. This will help especially if all steps from raw materials to finished product are carried out in one region. Furthermore, relocating production back to Europa and to the US will improve control over the flow of drugs in those regions.
When considering changes in the pharmaceutical industry, it is important to realize that this industry is notoriously resistant to change, and considerable pressure is therefore needed to overcome this inertia. The current crisis serves as a necessary trigger for change, especially with support of political forces, and could be utilized to reach a higher level of stable supply of medicines going forward.
When production chains are onshored, that activity can be used to introduce improvements rather than to copy historic inefficiencies. Crisis-induced onshoring of production offers an opportunity to rethink and redesign the drug supply process, resulting in a supply chain more resilient to shocks, which is more productive and more flexible.
Three key benefits:
In such a proposed end situation, the supply is more resilient, under regional control, operates with lower costs due to increased productivity, and production is more flexible because of standardized technology platforms.
“Everything should be as simple as it can be, but not simpler,” Albert Einstein.
ProPharma Group has broad experience in the pharmaceutical industry and an excellent track record in risk analysis, mitigation, technology transfer, regulatory support, and creative thinking to support you in establishing a stable supply of medicines in this uncertain future. We are interested in your thoughts in these exciting times and welcome opportunities to exchange ideas. Contact us to learn how we can help you develop a stable, end-to-end supply chain.
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