Business continuity of healthcare companies is being significantly challenged and there are serious risks of supply chain disruption due to the global COVID-19 emergency. It is critical that companies assess, manage and control these risks.
HiTech Health has extensive experience and expertise to support our clients in:
- Business continuity assessments, processes and culture for Pharmaceutical and Biopharmaceutical companies.
- Assessing current supply chains and help implement controls to ensure there is continuity of clinical and commercial supply
- Mitigation strategies for short, medium and long-term risks.
COVID-19, the new coronavirus, has been having a major global impact since its outbreak was discovered in China in December 2019. Immediate concerns are for the well-being of employees globally and a focus on business continuity planning.
The rapid spread of the virus COVID-19 has already had significant impact on global supply chains, including pharmaceutical, biotechnology and medical device organisations that have complex supply chains spanning multiple countries. According to ‘Business Insider’ on March 26th, 2020, the COVID-19 pandemic has forced more than a third of the world’s population into lockdown or living under some form of restrictions. It is uncertain when these restrictions will be lifted. In Europe the healthcare industry remains operational as it is deemed ‘essential business’. All non-essential business has been shut down due the virus. Movement of healthcare products continues however, supply chains have been significantly disrupted globally. Many of these companies have critical suppliers located within the lockdown regions and this may have major consequences on the manufacturing, supply and delivery of key medicinal products to patients if risks are not understood and managed effectively.
According to the FDA, since the 24th January 2020, the agency has been in contact with more than 180 manufacturers of human drugs, not only to remind them of applicable legal requirements for notifying the agency of any anticipated supply disruptions, but also asking them to evaluate their entire supply chain, including active pharmaceutical ingredients and other components manufactured globally (1). The FDA has released guidelines in a multiple of areas surrounding the COVID-19 pandemic. Actions to manufacture more crucial medicinal products, such as ventilators, has been enforced to help prepare for the inevitable crisis (2). In addition, the FDA has made it possible for medical device makers to make changes more easily to existing product, such as supplier or material specification changes to address supply shortages (2).
Supply Chain disruptions may occur due to temporary lockdown of manufacturing sites and travel restrictions affecting exports. The EMA has established the EU Executive Steering Group on Shortages of Medicines Caused by Major Events in response to the pandemic outbreak to address the impact of the pandemic on supply chains and to identify and co-ordinate EU-level measures for protecting patients. The EMA have also requested patients only receive their typical supply of medicines to prevent strain on drug supply chains. To read more on the updated regulations from the EMA visit the web link below (3).
It has proven difficult to secure freight capacity on airplanes over the last number of weeks. Airlines are now using passenger planes as cargo charter flights, to offset market capacity. According to leading global freight forwarders, air freight prices continue to rise. Average rates per kilo from China to the EU, have increased a further 75% since last week and forecast suggest this could increase even more. With the Chinese manufacturers now back in production, demand for freight capacity is at an all-time high with availability of capacity somewhat diminished. HiTech Health can work with you to identify, assess and mitigate the risks posed by the current global health crisis to your shipping lanes. Ultimately, our goal is to ensure that patients who rely on medicinal products continue to be supplied in an efficient and steady way.
Companies that source, manufacture or supply medicinal products from / to areas in lockdown should consider the following:
- Prepare for manufacturing plant closures. If this occurs, do you have a qualified secondary supplier or sufficient inventory in place?
- Expect potential cancellation or delays of shipments. How will you ensure your product remains safe and within the required storage conditions?
- Ensure sufficient inventory levels to avoid disruption to on-going clinical trials or commercial supply to patients in need. How will COVID-19 affect your forecasting and production scheduling for the rest of 2020 and years to come?
- The financial impact of increasing costs of manufacturing and supply costs in addition to the stock market decline. Has your organisation developed financial risk mitigation plans?
- Assess the impact that employees and partners working remotely will have. How will this affect your IT infrastructure, HR requirements and support for manufacturing and supplying products in a timely manner?
- Assessed short, medium- and long-term operational restrictions for the movement of goods?
- Redesigning shipment sizes due to availability of capacity in your shipping lanes?
- Assessed the impact of lockdown regions on shipping qualification/validation studies?
This list above is not exhaustive, however, it provides examples of some key consideration to be reflected upon to avoid serious disruption. What is critical is that Companies plan and manage through such times of uncertainty in order to provide the best possible outcomes for their business.
Contact HiTech Health here for more information.