The number of pharmaceutical suppliers who are able to deliver at least 80% of their products on time and in full (OTIF) dropped 16 percentage points from last year, according to a new white paper on the drug supply chain by global market intelligence firm IDC.
Similarly, the amount of pharmaceutical companies who can deliver OTIF products to their customers at least 80% of the time dropped 17 percentage points.
The white paper, titled "Supply Chain Agility in the Pharmaceutical Industry," argues that without the visibility and agility given by end-to-end approaches and data sharing, companies do not have the resilient supply chain needed in the face of the COVID-19 pandemic. The paper was announced with a press release Nov 18 by its sponsor, TraceLink Inc., a digital platform provider for life sciences.
These recommendations come during a time of shortages throughout the globe as COVID-19 exacerbates supply chain vulnerabilities.
Just last week, the American Medical Association declared drug shortages an urgent public health crisis. Recent reports talk about South Africa's and Canada's shortages of mental health medication, and other reports talk about sweeping shortages in countries like Lebanon and Iran as well as chronic shortages in France.
Russia is also dealing with COVID-related drug shortages, and New Zealand, despite its relatively transparent drug supply, is grappling with its own shortages of drugs such as oral contraceptives and antidepressants.
COVID-related or not, shortages on the rise
During the second quarter of 2020, IDC surveyed 532 pharmaceutical stakeholders across the United States, India, the United Kingdom, and Scandinavia, including pharmaceutical companies (49%), health systems and hospitals (24%), manufacturers (12%), and retail pharmacies (10%).
Overall, 46% of respondents experienced drug shortages during the pandemic that equally affected COVID and non-COVID products, and 75% of respondents say they are constantly accelerating products to meet current demand.
Drug shortages can cause upstream issues that can take more than 40 days to resolve, according to 45% of survey respondents, and 29% say that downstream resolution can take just as long. Among hospitals and retailers, 27% say the most pressing problem is shortages of the drug itself, followed by transportation delays (20%).
Pharmaceutical stakeholders are also having an increasingly difficult time predicting demands to come, with 63% of responders reporting a lack of faith in demand forecasts. Factors such as the stuttering demand for non-COVID procedures and remedies further exacerbate this.
Perhaps unsurprisingly, 70% of survey respondents said the supply chain will be extremely vulnerable in the upcoming months of the pandemic. Drug shortages have affected 20% of the respondents, and many have reported increased costs (40%) and a lowered ability to serve patients well (13%).
"With poor demand forecasts and unpredictable supply, achieving dynamic supply and demand balancing and effective supply chain planning will be difficult without a network of connected partners sharing data and collaborating in real time," writes IDC in the report.
'Holistic' transformation needed
Regarding supply chain improvement, 57% of surveyed companies either remain reactive or focus only on making changes locally, 37% are working toward end-to-end transformation, and only 6% look at it from IDC's ideal perspective: patient demand.
Yet the white paper reports that 79% of survey respondents believe that having timely visibility across each part of the supply chain—a status grounded in broad collaboration—would significantly eliminate drug shortages.
IDC recommends further adoption of analytical and data sharing technology, adding, "Companies that viewed their supply chains as more progressed in their transformation journey were more likely to view the impact of COVID-19 on their business as less severe than those that judged their supply chain transformation to be less progressed."
Making transformative changes to any supply system, let alone in the pharmaceutical industry, will take a while. The IDC recommends companies begin by identifying and addressing root causes of supply chain issues, collecting and optimizing downstream demand data, and using integrative technology to help with communication and responsiveness.
"Plan holistically for transformation across all functional departments and investigate platforms to enable integration of planning and operations across the end-to-end supply network," the report authors write.