By Zoryana Zagorodnya, SAP Digital Supply Chain Marketing
Whenever I go to my local pharmacy, I see empty shelves or prescriptions that cannot be filled due to stock shortages. One prime example is a recent shortage of Adderall, which is a stimulant that contains amphetamine and dextroamphetamine and is highly controlled by the government, making it more challenging to manufacture generics. This became a massive issue that has left patients diagnosed with ADHD uncertain as to how to continue their treatment.
Drug shortages can occur for many reasons from manufacturing and quality problems to supply chain delays. The FDA announced the shortage in October that one of the largest producers is experiencing “intermittent manufacturing delays” and other manufacturers cannot keep up with demand.
So how bad can the shortages of Adderall and other drugs that many of us rely on get?
Let’s discuss the problems that pharmaceutical manufacturers are facing within their supply chains and what the solutions could be.
#1 Balancing the volatile demand and supply
It is estimated that up to 80% of active pharmaceutical ingredients (API) are manufactured in China or India. For instance, China and India produce 90% of penicillin, 60% of paracetamol, and 50% of ibuprofen which is marketed worldwide. So a supply chain glitch like a port closure, or plant shutdown can have a significant impact, with supply being stuck halfway around the world!
Usually, drugs and products with the same active ingredient are available from other manufacturers - so-called generics. But often, as with Adderall, a substance may not reach the market for a long time due to supply bottlenecks.
Planning demand is more than essential in an uncertain world. Making accurate short- to long-term forecasts gives an opportunity to sense the possible disruption and be one step ahead to prevent them from happening.
Synchronizing supply chain planning in real-time across the business in line with financial and operational plans helps to become a more agile and aligned organization that is ready to respond to any situation.
#2 Prevent quality issues within manufacturing processes
When there is a shortage of raw materials, it is critical to maximize every gram, and ensure high quality and minimal waste in the manufacturing process.
This can be especially difficult if you are reliant on a contract manufacturer in a low-cost region who may not be able to provide the collaboration and visibility required into their production and quality control processes.
It is important to identify early when there is a quality problem. When manufacturing processes are visible, controlling every process is easier which helps to ensure that manufacturing operations are running smoothly.
#3 Cut complexity and reduce risks in regulatory noncompliance
The World Health Organization (WHO) estimated that 1 in 10 medical products in low- and middle-income countries is substandard or falsified. Some may contain no active ingredient; some include the wrong active ingredient or wrong amount of active ingredient.
What makes it worse, some medicines contain dangerous ingredients, such as heavy metals, highway paint, and rat poison.
Taking counterfeit medical products leads to antimicrobial resistance and drug-resistant infections or even impacts people’s health and creates new diseases. As a result, the World Health Organization (WHO) estimates that more than one million people die yearly from these fake cures.
By leveraging industry network hubs such as SAP Information Collaboration Hub for Life Sciences, pharmaceutical firms to share product information for traceability and verification across the supply network and with government regulators.
With real-time situational awareness, it’s less complicated to reduce noncompliance risk. When quality is vital, controlling every process becomes a high priority.
Awareness of every process makes it easier to identify counterfeit drugs and react faster.
Moreover, from country to country requirements for drug serialization can slightly differ. Effective tracking helps not only to regulate reporting capabilities, but also boost efficiency by ensuring greater visibility into material movements down to the sales-unit-item level.
When human life is at stake, the pressure of avoiding risks is even higher. In a world of constant disruptions, pharmaceutical companies need to stay resilient. The desire to do things better in terms of product safety and supply chain optimization should become a key priority for the pharmaceutical industry because it significantly impacts lives and provides an opportunity to increase health and happiness worldwide.
Would you like to learn more how to build a resilient, sustainable supply chain? Check out the recent Oxford Economics Research Report “The Sustainable Supply Chain Paradox”
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