Navigating Global Events: The Impact on Drug Supply Chains and APIs

In an increasingly interconnected world, global events have a profound impact on all industries, including the pharmaceutical sector. This article explores how these events affect the supply chain for drugs, with a particular focus on active pharmaceutical ingredients (APIs). 


Global Events and Their Impact on DRUG Supply chains

Global events, whether geopolitical, economic, or environmental, can disrupt the pharmaceutical supply chain. For instance, the blockage of the Suez Canal by Evergreen, the ongoing geopolitical clash between Ukraine and Russia, and the trade war between China and the US have all had ripple effects on supply chains. The COVID-19 pandemic, in particular, has underscored how such events can disrupt the pharmaceutical supply chain. 

The pharmaceutical supply chain is extensive, starting with chemicals, API manufacturing, formulation, packaging, and drug delivery to the patient, involving many players. Global events can cause additional levels of impact, such as personnel, material, service, and equipment shortages, affecting the supply chain.  

he Role of  API Manufacturers in the Supply Chain 

Active Pharmaceutical Ingredients (APIs) play a crucial role in the pharmaceutical supply chain. They are the primary components that give drugs their therapeutic effect. Any disruption in the supply of APIs can have significant consequences for the availability of essential medications. 

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At Bachem, a leading specialist for peptides and oligonucleotide API and contract development and manufacturing organization (CDMO), the journey begins at the API level, where upstream chemicals are sourced worldwide. These are essential for the chemical synthesis to manufacture peptide and oligonucleotide API. From there, the product is sent to the customers or directly to a formulation site, where ingredients from various continents are combined to create the final medication (or finished dose product). This product is then primarily packaged, a process that can occur closer to the market or be consolidated, depending on the pharmaceutical company’s structure. Primary packaging materials such as aluminium and plastics are sourced globally. 


Recent Disruptions in Supply Chains 

Here are some of the recent disruptions that have significantly impacted global supply chains: 

  • COVID-19 Pandemic: The pandemic has caused unprecedented disruptions in global supply chains due to lockdowns, labor shortages, and increased demand for certain products.
  • Suez Canal Blockage: The blockage of the Suez Canal by the Ever Given ship disrupted global trade, causing delays in the delivery of goods.
  • Geopolitical Tensions: Ongoing geopolitical tensions, such as the trade war between China and the US and the conflict between Ukraine and Russia, have added complexity to global supply chains.
  • Extreme Weather Events: Events like Hurricane Ida and the winter storm in Texas have disrupted the supply of raw materials and caused delays in transportation
  • Cyber Attacks: Cyber attacks on key infrastructure have disrupted tracking systems and caused significant delays.
  • Factory Shutdowns: In response to a surge in COVID-19 cases, major manufacturing hubs in countries like Vietnam had to shut down factories, leading to a scramble for alternate suppliers. 

These disruptions highlight the importance of building resilient supply chains that can adapt to unexpected global events. 


Mitigating Risks in the Supply Chain 

To mitigate the risks and threats present in the global pharmaceutical supply chain, companies like Bachem have implemented strategies to ensure business continuity. These strategies include maintaining strategic stock levels, validating transportation routes, and dealing with secondary and tertiary suppliers for key starting materials. 

In conclusion, as a leading CDMO for APIs, we at Bachem understand our critical role in the extensive pharmaceutical supply chain. The manufacturing of APIs is the initial and vital part of the drug supply chain, and any disruption can have significant downstream effects. Global events can pose substantial challenges to the supply of APIs, and hence, the continuity of drug supply. Recognizing this, we have implemented robust strategies to mitigate these risks and ensure the continuous production and supply of APIs. This requires a deep understanding of the complexities of the global pharmaceutical supply chain and the ability to adapt quickly to an disruptive global landscape. By doing so, we can fulfill our commitment to ensuring drug supply and helping patients receive their medications in a timely manner. 

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