Article | March 16, 2021

COVID-19 Pandemic Has Exposed The Risks Of Reliance On Foreign Markets For Critical Drug Components

By Anshul Mangal, CEO, Project Farma


The recent COVID-19 pandemic has brought the world to a standstill. The required quarantine and social distancing guidelines have disrupted the global supply chain for many industries, but most critically, the drug manufacturing industry. Following the outbreak, the world is facing an unprecedented shortage of critical supplies, materials and drugs across the life science industries Factory slowdowns and government enforced lock-downs around the world have forced drug manufacturing facilities to stop exporting due to shortage (Sah 2020). The response and roadblocks the industry is experiencing during this outbreak is evidence that the industry is not prepared to rapidly respond to a pandemic.

The pandemic has exposed the risks of outsourcing the manufacturing and production of critical drug materials to foreign markets. China is currently the biggest producer and exporter of active pharmaceutical ingredients (API) by volume, they were also the country that was hit first and the hardest at the start of the outbreak causing a country wide shut down. According to the FDA, 13% of brand and generic active pharmaceutical ingredient (API)  manufacturers are based in China. However, they do not know which materials, and how much of them, are not being imported to the US making it difficult to understand where to anticipate gaps in domestic supplies.

The US has been over-reliant on other countries to provide the critical components we need to make drugs. If other countries are in a shortage of raw materials and APIs, as they are currently, they will not be able or willing to export these materials to the US. Foreign factories being shut down or banned from exporting due to the pandemic affect the global supply chain and have caused a domestic shortage, with the FDA identifying its first drug shortage earlier this year (Corridon 2020).

FDA data also shows that of the world’s facilities that manufacture Essential Medicines, deemed essential by the World Health Organization (WHO), only 21% are based in the US. While major US pharmaceutical companies do not anticipate any immediate shortages, these various reports reveal the vulnerability the US is subject to when the global pharmaceutical supply chain is destabilized. This pandemic has additionally highlighted the importance of having emergency preparedness plans in place if a partner, foreign or domestic, is no longer able to deliver.

Other challenges brought by COVID-19 has made it difficult to conduct clinical trials. Companies that provide clinical development have acknowledged their roadblocks to safely conducting trials. In general, our overburdened healthcare system and social distancing policies are creating a challenging landscape for the life science industry, and over-reliance on foreign markets are now exasperated in an already difficult environment.

Here is how Project Farma can help.


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