An over-reliance on China and India for pharmaceutical supplies has left the UK vulnerable to supply shocks, according to a supply chain boss.
Disruptions to medical supply chains are “critical” and industry must use the pandemic as a “catalyst to rethink” medical supply chains and future-proof against shocks, said Mohammad Samy, head of supply chain at pharmaceutical company Pharmanovia.
Samy told Supply Management the pandemic showed supply chains were “over-reliant” on China and India for raw materials and finished products, which “created an immediate supply shortage especially for the companies who were working on a just-in-time principle”. This resulted in disrupted supplies of painkillers and treatments for Covid-19.
Research by the Pharmaceutical Journal found over half (54%) of pharmacists said medicines shortages had put patients at risk in the past six months, according to a survey of more than 1,500 UK pharmacists.
Separate research from the Pharmaceutical Services Negotiating Committee found 83% of pharmacies had seen a significant increase in medicine supply issues in the past year. Two-thirds (66%) of survey respondents said medicine supply chain issues were now a daily occurrence, with 97% saying this has led to frustration from patients.
Pharmaceutical supply chains were not prepared for Brexit, and Samy warned times are about to get even tougher for the industry.
“The UK pharma supply chain experienced the bite from Brexit as a lot of companies weren't prepared, and immediately after that we had the hit from the pandemic, and then the war between Russia and Ukraine made it even more complex.”
Disruptions have resulted in raw materials going up in price by 150%, and logistics costs increasing by 300%. Costs will rise further as inflation increases.
Samy said: “I think we are heading towards more tough times. Building second sources of energy to become less reliant on Russia, it takes time. It cannot be done overnight. We all have to jointly share the pain, work collaboratively and maintain the supply chain.”
He said pharmaceutical companies must implement dual sourcing for raw materials and supplies and stress test supply chains. Procurement teams must improve visibility “in every step of the supply chain” and enhance collaboration with suppliers to gain a greater understanding of risk.
Samy said greater nearshoring and regionalisation can future-proof against shocks.
“Covid worked as a catalyst for us to rethink; not to over rely on a specific geographic area, spread the supply chain, build regional or local supply chains and build supply chain resilience.”
Businesses may need to take a short-term financial hit to strengthen supply chains, but Samy said future-proofing would bring long-term profitability.
“Sometimes it might not be profitable in the short term,” he said. “But in the longer term, if the business isn't sustainable, you'll be losing the entire part of the business. So it's ideal to build the regional or local supply chain for longer term sustainability, and fulfilling the patient's needs.”
☛ Want to stay up to date with the news? Sign up to our daily bulletin.