Ammar Badwy | Posted on April 2, 2020
Effect of the Coronavirus on the global pharma supply chain
With the current COVID-19 pandemic, we are living in turbulent times where it is vital that the pharmaceutical- and medicine industry stays operational. Lots of people are worried about this and have a hard time finding out what the current situation is in the industry. To shed some light on the COVID-19 situation in the pharmaceutical industry, we have put together a survey and have asked our user base for their feedback.
Our user base consists of pharmaceutical professionals spread over all kinds of specialisms. Medicine makers, raw material producers, intermediate producers, pharmacists, and other specialists have responded to our survey. We hope to give an insight into the current situation and what kind of developments we can expect! There were 117 participants in our survey.
Size of the companies
- 51-250 people 26,7%
- 0-10 people 25%
- 11-50 people 23,3%
- 251-500 people 10,3%
- 501-1000 people 7,8%
- more than 1000 6,9%
Companies in our audience
- Medicine maker 45%
- Trader 43%
- API manufacturer 18%
- R&D 16%
- Other 13%
- Intermediate manuf. 12%
- Excipient manuf. 6%
Delays in the production process
In order to find out more about the current situation, we have asked our user base if their company is currently operating on full capacity. A large group of the medicine producers and raw material suppliers aren’t running on full capacity at the moment, This could be due to people not being able to work because of illness, or being forced to work at home which isn’t a possibility for everyone, such as people who work in production.
- Closed 12%
- Nearly closed 6%
- Half capacity 12%
- Nearly full capacity 19%
- Full capacity 46%
Of course, not being able to run at full capacity has its consequences. Delays in production are to be expected and that is also what we found in our analysis of the data. Half of the producers of pharmaceutical raw materials have indicated that they already experience delays in their production process. In the group of medicine makers we have surveyed, nearly three-quarters have indicated that their production process has taken a dent and delays have occurred due to the COVID-19 pandemic outbreak.
Currently experiencing delays
- Raw material producers 50%
- Medicine producers 70%
Medicine makers are dependent on a multitude of external parties in their production process, and we can’t forget about the local laws and regulations that are in place. Most of the time, specific suppliers are defined in a product dossier and it isn’t always simple or even possible to switch from suppliers temporarily. Due to laws and regulations, it can be a time-consuming process.
“Factories are slowing down production and it is hard to find a way of transporting the goods”
-Pharmaceutical trading company-
Going back to the delays we talked about earlier: out of the raw material producers and medicine makers that aren’t experiencing any delays yet, about half of the medicine makers are expecting delays to occur in the near future, and out of the raw material producers nearly three-quarters is expecting delays soon. However, the general consensus seems to be optimistic. Even though a large group currently is experiencing delays, 90% of the same group of raw material producers is expecting the delays to be resolved within the next three months. Out of the medicine makers, this number is 66%.
Shortages in the entire supply chain
Whilst raw materials (APIs) of course are important for medicine makers, there’s more to the process than just having the API. Logistics, packing materials, cleaning supplies, other raw materials such as excipients, and so on. About half of the medicine makers and raw material producers have encountered problems with logistics, and around 70% have issues with being able to purchase their raw materials.
Even a lack of disinfectants such as isopropyl alcohol or face masks is causing issues as nearly a quarter of API producers have indicated problems with the supply of these, and in the group of medicine makers, this number goes up to nearly s half. Because of this, a large chunk of medicine makers was forced to switch from their usual supplier for raw materials and the likes, even though switching suppliers can be tricky, as we explained earlier.
“47% was forced to change raw material supplier”
-It’s difficult and time consuming for medicine makers to change from supplier-
In the questionnaire, we have also asked in which regions the respondents are active with their business. Because some regions in the world are affected more by the COVID-19 pandemic than others, it would be possible that a certain region would see more effects in shipments than in other regions. We found that the regions currently most affected by the COVID-19 pandemic, Europa and Asia, our respondents have noticed the largest effect in shipments to these regions.
Affected shipments or no supply at all
Percentage of sales that is affected
- Europe 37%
- Asia 41%
- Latin America 32%
- USA 17%
- Africa 26%
- Oceania 29%
Our users expect that the medicine groups that may be the most affected are:
- Anti-infectives for systemic use
- Respiratory system
- Cardiovascular system
It is possible that the results of our survey are subject to response bias, causing an overestimation of the number of problems that occur because of the COVID-19 pandemic. Even though, it does seem that lots of companies are affected by the COVID-19 pandemic and that it is causing problems in the entire pharma supply chain. This could have consequences for the availability of medicine both in the short-term and the long-term.
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