Global pharma’s two battles – supply continuity and COVID-19 vaccine

Richa Mahindru, Domain Leader, Pharma and Life Sciences Practice, Praxis Global Alliance and Ishani Jain, Member, Pharma and Life Sciences Practice, Praxis Global Alliance elaborate on how pharma companies are dealing with these twin challenges and point out that while global drug supply chains are shifting to local supply chains, vaccinology is moving at breakneck speed with vaccine development compressed into 12 months from a usual 12 years or so

By late 2020, while the COVID-19 pandemic has already made inroads as the most wide-scale humanitarian crisis in modern history, the global pharma industry has been changed irreversibly. The industry is fighting two critical battles which are expected to markedly alter the pharma world we knew pre-COVID-19.

Disruption in the global supply chain processes due to COVID-19 has exposed the vulnerabilities inherent to relying on any specific region for a substantial supply of drugs and API (active pharma ingredients). Recognising the importance of self-sufficiency, a rapid worldwide response is being witnessed to safeguard the supply of life-saving drugs from further unexpected disruptions. This all, while ensuring that safe and effective vaccines against COVID-19 are available as early as possible to the widest audience.

Transforming supply chains
As COVID-19 began ravaging the world in early 2020, there was not much impact in the first quarter as manufacturers generally stockpile 60-90 days inventory of essential ingredients and hence, were not threatened by a slowdown in deliveries of raw materials. Since March, however, industry watchers have been continuously cautioning about the fragility and slowdown of current supply chains which could result in a possible shortage of essential API and shrinking inventories of backup supplies. Considering this potential threat of supply disruption of API and generic volumes coming from Asia, western world pharma markets have started to take strides to secure and strengthen their position in the industry. As it appears, a rapid shift from global supply chains to self-sufficient local supply chain models is well underway. Such shifts at the industry, company, and government level may pose major implications for Asian CRAMS as western pharma companies reevaluate their strategy, supply chain, and distribution networks.

‘Make versus buy’ decisions will be made by superimposing these new supply risks with the costs and benefits of Asian Contract Development and Manufacturing Organizations (CDMOs) and incentives offered by governments

Asian operations of western pharma cos: Many API producers worldwide rely on their own plants in pharma emerging countries like China and India. For instance, Switzerland based