How the COVID-19 pandemic has highlighted the need to make fragile pharmaceutical manufacturing supply chains more resilient

Posted on 25 Jun 2021 by The Manufacturer

The need to rapidly scale up production, while maintaining the validated process, in the face of the COVID-19 pandemic left many pharmaceutical manufacturers questioning their increasingly offshore supply chains. But what is the answer when it comes to shoring up supply of raw materials and ensuring production requirements can be met?

Pharmaceutical manufacturing supply chains are complex and, as highlighted by the impact of the Covid-19 pandemic, also fragile.  

The global Covid-19 pandemic has wreaked havoc with pharmaceutical manufacturing supply chains since it began. At a time when supplies of Active Pharmaceutical Ingredients (APIs), intermediaries and additives needed to be as solid and reliable as ever, it was the very thing they were needed to combat, Covid-19, that was disrupting their availability.

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Covid-19 triggered greater demand for drugs 

The global health emergency caused by the COVID-19 pandemic led to an unprecedented level of scientific collaboration and achievement, resulting in no fewer than 17 approved vaccines (at time of writing), with a further 117 candidates currently undergoing clinical trials. 

However, while demand for COVID vaccines is sky-high — 14bn doses are estimated to be needed by the end of 2021, according to Gavi, the Vaccine Alliance — the process of scaling up manufacturing of these vaccines from zero to billions has not been without its challenges. 

Having had to discard up to 15m vaccine doses in March when materials for its vaccine were mixed up with AstraZeneca’s, Johnson & Johnson’s COVID vaccine experienced another setback recently as lingering production holdups led to zero doses being shipped one week in May. 

Nevertheless, Gavi says the current capacity for COVID-19 vaccines alone is three times the annual doses produced each year for all other vaccines combined. This highlights just how remarkable the COVID-19 vaccine production drive has been. But supply issues have resulted in some countries imposing export bans for vaccines or for some of the components used to manufacture them. These bans, plus a global shipping crisis and rising API costs, caused a major bottleneck, as big an issue in supply as insufficient manufacturing capacity. 

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The global shipping crisis exacerbated the situation 

When the global COVID-19 pandemic struck, many were quick to question the lean practices of manufacturers, especially just-in-time (JIT) inventory management. But the shortages in pharmaceutical manufacturing supply chains stem from factors far beyond lean inventories. 

Over the last decade, lower costs have been a key factor in the decision to relocate a significant share of manufacturing capabilities to the Far East, particularly China and India. We have witnessed a large increase in production volumes in these countries. Indeed, according to FDA data published in 2019, as of August 2019, only 28% of API production for the US pharmaceutical manufacturing sector was based on American soil. The remaining 72% of API manufacturers supplying the US market were overseas, with 13% in China. 

However, the spread of COVID-19 has caused many port workers and truck drivers to be sidelined, impeding the unloading and distribution of goods produced in factories in Asia and arriving by ship to North America and Europe. 

As if the pharma supply chain situation wasn’t precarious enough, we then witnessed an unprecedented event: the total closure of the Suez Canal for six days. The grounding of the Ever Given, a 400-metre-long Japanese container ship, is estimated to top $1bn (£730m), the authority which manages the waterway has said. At one point, on March 28, there were at least 369 ships queuing to pass through the canal. This prevented an estimated US$9.6bn (£6.78bn) worth of trade. 

The relocation of manufacturing to the Far East has had a direct impact on pharmaceutical manufacturing supply chain reliability and has led to drug shortages across the United States. 

API costs are also rising

The final piece of the pharmaceutical manufacturing supply chain problem, is the rising cost of APIs. 

With demand high and supply hindered by the pandemic and the global shipping crisis, the price of raw materials used to manufacture key Covid drugs has jumped significantly. According to data accessed by ThePrint from the pharmaceuticals industry, the prices of many APIs, such as ivermectin, methylprednisolone, doxycycline, enoxaparin, paracetamol, azithromycin, meropenem and pipratazo, many of which are required for the production of key Covid drugs, went up by approximately 30-200% between March and April 2021. 

The situation has exposed the impact of raw materials shortages on pharmaceutical manufacturing. 

At the end of 2020, Pfizer’s ability to scale up vaccine production was reportedly hindered. In December, a Pfizer spokesperson told Reuters that a scale-up of its raw material supply chain took longer than expected. At the same time, a Pfizer source directly involved in the development of the firm’s vaccine told The Wall Street Journal: “Some early batches of the raw materials failed to meet the standards.” 

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How the pharma manufacturing industry can strengthen its supply chains 

Short of reshoring all raw material manufacturing and eliminating the need to rely on the Far East for supply, the pharmaceutical manufacturing industry does have some other options to strengthen its supply chains and be in a position to scale up production quickly. 

By collaborating with contract manufacturing organisations (CMOs) and contract development and manufacturing organisations (CDMOs), pharma firms can benefit from additional economies of scale. However, this is still a zero-sum game in the short term and, as mentioned above, lack of capacity does not seem to be the primary problem for pharmaceutical manufacturers.  

But with solid planning and scheduling, underpinned by advanced planning and scheduling (APS) software, pharmaceutical manufacturers can maximise throughput and yield, all the while maintaining the validated process for quality assurance. Such software also allows senior managers to quickly and accurately model different scenarios, enabling manufacturers to perform detailed what-if analyses before the manufacturing process begins.  

While advanced planning and scheduling (APS) software cannot alter problems along the supply chain, it can play a significant role in improving pharmaceutical manufacturers’ production efficiency. 

It’s hard to comprehend that in this day and age there are pharmaceutical manufacturers that still use spreadsheets and offline planning methods for their scheduling. Is it really acceptable for global pharma firms to be relying on such methods nowadays? 

Optimising your planning and scheduling processes is one of the most powerful ways to deliver stronger ROI on new treatments. Discover how you can future-proof your pharmaceutical & biopharmaceutical manufacturing operations for success.


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