The world as we knew it changed forever as the pandemic ravaged the globe leaving footprints of utter misery along its way. Destroying lives and the livelihood of millions of people worldwide, COVID elicited unprecedented and unforeseen impediments that hamstrung the global economy, the ripple effects of which will still be felt for many years to come.
One of the first and hardest hit economic casualties of the pandemic was the global pharmaceutical industry. Most pharmaceutical industries depend on predetermined projections to produce drugs and essential drug ingredients to meet client demands. However, the excessive demand during the COVID-19 emergency depleted existing product inventories and raw materials. Moreover, globalization of the drug manufacturing process contributed to disruption in production and shipping as lockdowns, export/travel bans, and understaffing severely paralyzed the flow. In addition, many governments around the world were unwilling to export raw materials and medications to conserve the supplies available for treating their citizens.
For instance, The United States is heavily dependent on India, China, and Europe for API (Active Pharmaceutical Ingredients) and finished pharmaceutical products. However, India refrained from exporting 26 drugs and 13 APIs (for antivirals, antihypertensives, and antibiotics) during the start of the pandemic to conserve supply for its citizens. The USA also heavily relies on China for APIs, and since the emergence of COVID in Wuhan, China had also drastically reduced its pharmaceutical exports to the US because of travel bans, lockdowns, understaffing, and shortage of raw materials. This caused an overwhelming dearth of drug supply in the US market, as evident from the FDA drug shortage report for 2019-2020.
Besides excessive demands and restrictions imposed by foreign governments, a few other factors also largely contributed to the disruption in the US pharmaceutical supply chain during the pandemic. Delayed regulatory oversight by the FDA and inadequate supply chain planning and management played an enormous role in the disruption. Postponement of FDA drug inspection and all inspections of scheduled foreign manufacturing plants affected medications that required special quality assurance procedures. For instance, intravenous drugs must undergo weeks of sterility testing before they receive approval. A such delay caused inevitable disruptions in the supply chain and hence the shortage of essential drugs in the US market.
In addition to the regulatory oversight by the FDA, inadequate supply chain planning and management immensely hurt the pharmaceutical supply chain during the pandemic. The algorithms used by pharmaceutical wholesalers were not equipped to handle a global health crisis. The wholesalers use these algorithms to sell their supplies to retail pharmacies, hospitals, etc., and oversight on account of a health crisis had been largely overlooked before the pandemic. In addition, a lack of report of their inventories to the FDA and a lack of redistribution of the supplies to locations of higher demand due to contractual obligations resulted in a further worsened meltdown.
Dependency on foreign raw and finished products and a miscalculated oversight of the FDA and pharmaceutical wholesalers were the most dominant reasons why the supply chain management failed miserably to address the burgeoning needs during the pandemic. Since then, congress and the FDA have taken several steps to ensure that such a meltdown could be avoided in the future. The CARES act passed in March 2020 requires the manufacturers to follow new reporting requirements, develop a risk management plan, and make amendments to the Medicare part D plans to address future disruptions. FDA has also renewed its guidance on production and regulatory policies to accelerate supply chain issues during a shortage. Although FDA has limited ability to enforce such regulations, they have implemented a plan to manufacture the bulk of the APIs and finished drug products in the US itself. Undeniably, this will have a lasting impact on pharmaceutical supply chain management for years to come.
