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Pharmaceutical shortages open up debate on reshoring of API manufacturing

27 Oct 2020

Panel at CPhI Festival of Pharma discusses options for companies to ensure robust supply chains and reduce overseas supply dependency

US and European pharmaceutical companies are actively considering ways to diversify their supply chains – including the possible reshoring of drug and ingredients manufacturing – in the light of drug shortages that arose early in the COVID-19 pandemic, according to experts in a recent live panel discussion at the CPhI Festival of Pharma.

The virtual session, sponsored by Aspen Pharma, was focused on how growing globalisation of the active pharmaceutical ingredients (API) market had affected supply chains and whether measures were needed to avoid future bottlenecks.

Martin Van Trieste, President & CEO at Civica Rx said there are always around 250 drug shortages in the US at any one time, most of them older generic drugs such as sterile injectables, and blamed the situation on the economics of generics, describing generic pricing as a race to the bottom to get the lowest possible price.

“Individuals and companies don’t want to make the investments in manufacturing facilities and upgrades and expansions, so they have moved their entire supply chain offshore to places like India and China – this has developed a very long, complex supply chain that’s very fragile and at the end of the day, the patients suffer,” he said.

He added that at the height of the COVID-19 pandemic in the second quarter there were 50 countries that refused to export either personal protective equipment, diagnostic tests, reagents, pharmaceutical precursors, APIs and finished products: “That’s been a wake-up call for many governments around the world that the diversification of the pharmaceutical supply chain, including onshoring, is going to be required.”

Rene Zoetmulder, procurement lead at Aspen API said that pharmaceutical companies operating in Europe were seriously considering reshoring production into the continent as well as looking at different technologies to take a greener approach.

“That is a long-term programme in Europe – they have created a roadmap to do it step by step, and of course it will take a lot of time,” he said, adding that the regulatory limitations of switching and improving the system had been acknowledged.

He said that from Aspen’s perspective, the company had managed to maintain its relationships with its materials suppliers in China by actively keeping a presence in the country and not relying exclusively on agents.

“If you look at the recent COVID situation, where there was an immediate shortage of some materials, we were able to more than double immediately the output of a drug used during ventilation of patients in IC without having any issues with the availability of the materials,” he said. “You need to make sure that you have the chain under control, you go hand in hand, and you are actively managing it – then you won’t have any surprises.”

Luca Zambelli - Board member of the Chemical Pharmaceutical Association and Managing Director of Galentis, said that drug shortages were currently a “hot topic” within Europe.

He gave the example of the Medicines: policy, authorisation and monitoring unit at the European Directorate-General for Health and Food Safety recently communicating that by the end of the year, Europe should provide a document outlining a strategy to prevent medicines shortages.

He said there was a “lack of knowledge in Europe” about the true extent of the continent’s dependence on overseas supply for API manufacturing, quoting a recent report claiming that only 15% of European APIs are dependent on supply from China or India.

“The problem is how do we make these APIs?” he said. “The true story is that 85% of this material [manufactured in Europe] is made from starting materials, or advanced or early stage intermediates from China.”

He said that rather than focusing on reshoring of production, European companies should rather focus on the development of new manufacturing technologies in order to compete effectively with India and China.

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