US biopharma supply chain response to COVID-19

Finished goods supply chain response in the first 90 days of the pandemic

How well did the industry handle the unprecedented demands of the COVID-19 pandemic during the first 90 days of the US outbreak? This report by the HDA Research Foundation and Deloitte shows that the finished goods supply chain was resilient and effective in getting medicines safely and efficiently to patients, with limited disruptions concentrated around shortages of COVID-19–related drugs.

The race to find solutions to early COVID-19 challenges

The biopharmaceutical finished goods supply chain has been central to the COVID-19 fight from the beginning, coming together in a race to find solutions to curb the immediate and long-term challenges of the pandemic.

Pharmaceutical distributors and other stakeholders closely collaborated with upstream and downstream trading partners and government entities during the first 90 days of the US outbreak to protect the steady supply of critical, life-saving medicines to pharmacies, health care providers, and patients. They also worked to identify and speed to market coronavirus testing and therapeutics and have mobilized resources to develop safe and effective COVID-19 vaccine candidates.

The industry faced four specific challenges during the critical period between March 1 and June 1, 2020:

  • Handling surges for critical medicines
  • Minimizing supply disruptions
  • Sustaining operations while preserving workforce safety
  • Supporting the public health agenda

How well did the finished good supply chain handle the unprecedented early demands of the COVID-19 pandemic?

Impact assessment of biopharmaceutical industry’s response

Deloitte’s metrics-based impact assessment evaluated the finished goods supply chain’s ability to manage four COVID-19–specific challenges during the first 90 days of the US outbreak:

  • Balancing supply and demand. The industry was largely effective in balancing drug supply and demand; however, limited shortages and supply disruptions did occur for COVID-19 treatment and supporting drugs.
  • Prioritizing critical needs. To reduce the incidence of stockouts, distributors promptly set up allocation programs that helped contain the shortages initially observed of critical care drugs used to treat COVID-19 patients in intensive care units (ICUs).
  • Adapting to change. The supply chain was able to accommodate changes to the channels through which patients acquired their prescriptions. In particular, the mail-order channel saw greater use during the first 90 days and is showing signs of lasting increased use.
  • Investing in new opportunities. Industry stakeholders increased investment activity in four categories: enhancing existing capabilities, COVID-19 testing and treatments, COVID-19 vaccine candidates, and community support.

Also, Deloitte’s social sentiment assessment, which monitored and analyzed consumers’ online comments about perceived supply disruptions during the first 90 days, shows that patients had an overall positive perception of the industry’s performance in managing COVID-19–related challenges.

The biopharmaceutical industry invested substantially in developing capabilities to curb the pandemic’s short- and long-term challenges while also supporting the communities it serves.

Scenarios and path forward

The industry can build upon its effective response during the first 90 days of the pandemic to get ready for four possible scenarios that have the potential to materialize in the next 6 to 12 months and would have a significant impact on distribution and the broader biopharmaceutical ecosystem:

Shift to home delivery: As patients embrace social distancing measures and try to minimize in-person pharmacy visits, mail order and home delivery may become the predominant ways in which patients get their prescription medicines.

Rise of protectionism: A prolonged pandemic could spur governments to adopt nationalistic policies that dramatically affect stakeholders’ business and operating models.

Colliding disruptions: The potential collision between natural disasters and COVID-19 could have compounding effects on global supply chains, testing the resilience of the biopharmaceutical ecosystem.

Vaccine distribution: COVID-19 vaccine distribution will require significant coordination among the public and private sectors.

The future of resilience

The biopharmaceutical ecosystem has been at the forefront of the COVID-19 fight from the beginning. Organizations can use lessons learned during the US outbreak’s first 90 days to identify and address performance and capability gaps and select among suggested steps to enhance resilience to future disruptions based on the organization’s specific role in the biopharmaceutical ecosystem.

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