Getting medicines to those who need them

Burning platforms are very powerful drivers of fundamental change. However, is COVID-19 the burning platform or has it simply forced us to refocus on the challenges that existed and have been building for some time?

We are all aware that 80% of chemicals used to make drugs sold in Europe originate from China and India. India now supplies 40% of generics to the world market and 70% of its APIs are from China. Shortages, or at least a level of disruption, were inevitable as the virus spread, disruption will be inevitable should there be any future global economic or social shock.

Most companies have been relatively well positioned to weather a short-term disruption. Raw materials held at site, in the supply chain and forward purchasing of materials all support continuity of supply, for periods of up to six months. Strange as it may sound, Torbay Pharmaceuticals’ own Brexit preparation plans, in part, supported us to be well positioned. Short-term export bans by some countries could have had wider implications, however these were lifted reasonably quickly, allowing the supply chain to resume.

While in reality drug shortages due to COVID-19 have been limited, the inherent structural challenges that drive the way in which the sector operates remain:

  • Governments have driven the generic industry’s motivation and short-term focus on lowering costs
  • In the UK, generic tendering has a singular focus, lowest costs wins, ability to supply is not a point of consideration. If it were, the level of shortages seen outside of COVID-19, in the normal supply chain, would not exist
  • Manufacturing has been forced to adopt the same, lowest cost, high volume mantra, leading to dominance and low-cost supply from certain areas of the globe
  • Regulators and governments intervene in the supply chain in challenging times with a view to support. Intermittent intervention, of this type, often causes greater challenges, rather than driving the outcomes intended. It can be a very blunt instrument

Ultimately, this means supply chains are narrow, as cost is the top priority. Drugs are sold for pennies instead of pounds, manufacturers and licence holders are driven to create narrow, efficient supply chains, the result is that they have little or no resilience or redundancy built in. These are the realities of global economies and markets.

In the long term, we may start to see legislation designed to protect local and regional markets. In the short and medium term the challenges require decisive leadership designed to prioritise critical resources, from people, to capital assets and across the wider network of partners that we work with. Enhancing all working relationships through alignment and a shared purpose, underpinned by a good degree of critical challenge, enables more flexible management of resources, creating a greater ability to meet the demands of customers and needs of patients.

At Torbay Pharmaceuticals we take a ‘We can if...’ approach. We are seeing more licence holders asking a ‘We can if...’ question of their own supply chain, and the move to more local manufacturing and adopting a more balanced cost approach may well be one of the outcomes of COVID-19.

We believe that the only way in which you can create flexibility and agility across the supply chain is working with all partners to identify the best route forward, ‘We can if...’ will drive out a solution.

Ashley Noyce is head of Supply Chain at Torbay Pharmaceuticals