Covid-19 pandemic: knock-on effects for pharma supply chains

Allie Nawrat 8 April 2020 (Last Updated April 8th, 2020 13:42)

Covid-19 originated in China, which is where the clear majority of APIs for drugs are manufactured; China’s lockdown had a knock-on effect on its neighbour India, which relies on those APIs to produce generic drugs. What long-term impact could this have on supply chains and could it push pharma companies to seek to move their API manufacturing back to home soil?

Covid-19 pandemic: knock-on effects for pharma supply chains
Readers of Pharmaceutical Technology have been voting on how confident they are that the pharma supply chain will be able to maintain adequate supplies of medicines amid the Covid-19 pandemic. Credit: Shutterstock.

The novel coronavirus (Covid-19) has been wreaking global havoc over the past few months. It has pushed millions of people across the world into lockdown in their homes, forced many businesses to close and has tragically killed over 82,000 people globally at the time of writing.

Although the pharma industry has been invigorated to fight against Covid-19 with drugs and vaccines, the industry’s work has also been damaged by the pandemic, primarily through the disruption of supply chains.

Readers of Pharmaceutical Technology have been voting on how confident they are that the pharma supply chain will be able to maintain adequate supplies of medicines amid the Covid-19 pandemic. There was an interesting and fairly even split in opinion, with 24% of 3,617 respondents stating they are extremely confident medicine supplies won’t be disrupted, while 22% were extremely doubtful. This difference of opinion continues in the less extreme answers, with 23% of voters being somewhat confident, and 20% being somewhat doubtful.

These results suggest confusion about the extent to which pharma companies are struggling to manufacture and distribute medicines because of the pandemic, and its truly global scale.


Exploring pharma supply chain disruption 

McGuireWoods Consulting federal public affairs senior vice-president Stephanie Kennan explains: “The Covid-19 outbreak and measures to prevent its spread disrupted some supply lines because China is a significant source for many active pharmaceutical ingredients.” China was the epicentre of the outbreak, meaning early into the Covid-19 outbreak manufacturing and export declined as factories were closed to curb the spread of the virus.

Although China has now relaxed some of these restrictions, as the viral outbreak spread and became a pandemic, other countries implemented export controls impacting pharma supply chains. Most notably, India restricted the exports of active pharmaceutical ingredients (APIs) outside of the country because of the Covid-19 pandemic, which “could impact over-the-counter drug, as well as generic pharmaceuticals”; this restriction was only lifted on 7 April. The Pharmaceutical Export Promotion Council reported that India exported $19bn worth of pharma products in 2018-2019.

The scale of the problem is hard to quantify. “The lack of transparency in this area makes this difficult,” says Kennan. “It is hard to know, with any precision, the volume of APIs manufactured in China or India entering the US market.”

Impact on drug shortages

Analysis by GlobalData surrounding the Covid-19 pandemic found that the manufacture of 57 drugs is at risk of being affected because of “general manufacturing and export restrictions across China”.

These drugs range from calcium supplements to cancer and HIV drugs. It affects some of the world’s largest pharma companies, such as Pfizer, Johnson and Johnson and Novartis, as well as smaller, more specialist developers, such as Vertex and Jazz.

Importantly, in a report, GlobalData emphasised not all of these drugs are necessarily in shortage, as most companies have two sources for manufacturing.

So far the FDA has only identified two drugs that are in short supply due to Covid-19; the first was not named, Kennan notes, but the second is sedation drug midazolam, used to put patients on ventilation.

However, the regulator has “identified 20 drugs that might be vulnerable”, Kennan notes. These drugs have also not been named, presumably to prevent unnecessary panic from consumers worried about accessing drugs critical to their health and wellbeing.

Undermining clinical research

It is important to note that disruption to supply chains and subsequent drug shortages don’t just affect patients already prescribed and taking those drugs. It also affects clinical research of investigational drugs, which rely on similar manufacturing plants.

Trials have further been disrupted due to the social distancing, lockdown and quarantine measures implemented across the world, which mean continuing trials could put patients at significant risk.

A few companies have announced they are having to cancel or temporarily halt clinical trials, at least partially due to the pandemic. Examples include Lexicon’s cancelling of two long-term studies of its type-2 diabetes drug Zynquista in patients with heart failure and chronic kidney disease, as well as resTORbio delaying the enrolment of its Phase Ib/IIA trial of RTB10 in Parkinson’s disease.

Solutions to prevent future disruption

Although the pharma industry has contingency plans in place, and has some supply chain and clinical trial process flexibility, such as through virtual trials, this pandemic situation is unprecedented. Ultimately it is unclear how long it will last and how much more disruptive it could become. Kennan notes: “[Supply chain disruption] isn’t a short-term issue – it is one that companies have to constantly evaluate.”

In a recent Vertex announcement, in which the company reassured its stakeholders the current supply chain situation was in hand, Vertex chairman, president, CEO and Jeffrey Leiden commented: “The Covid-19 pandemic is a rapidly evolving global health crisis that will require unprecedented utilization of health care resources that we expect will have an impact on our clinical trials.

“In order to ensure patient safety and the appropriate use of healthcare resources and to maintain study integrity, we have made proactive changes to some of our ongoing and planned clinical trials. Given the rapidly evolving pandemic, it is too early to precisely determine the long-term effects of the outbreak on trial timelines.”

Regulators are looking to support pharma companies wherever they can in terms of supply chain stability and clinical trial capacity, but Kennan notes “moving supply chains and manufacturing is time consuming” as well as costly.

Could Covid-19 prove to be the straw that broke the camel’s back in encouraging the pharma industry to not rely so much on one country for its APIs?