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It’s a good thing pharmaceutical manufacturing supply chains are spread out around the world

Nicole Longo   |     May 21, 2020   |   SHARE THIS

The biopharmaceutical industry is committed to ensuring Americans and people around the world have access to the medicines they need. As a result, companies do everything they can to make sure manufacturing of medicines is uninterrupted so that there is enough supply to meet demand. One strategy for maintaining a stable, operational supply chain is geographic diversity.

Fact: Geographic diversity is key to the stability of a manufacturing supply chain for a medicine.

While often overlooked, geographic diversification of the supply chain is beneficial, especially in the time of pandemics, because of the flexibility it gives companies when they need it most. If an entire pharmaceutical supply chain is dependent upon one geographic area and that area experiences a natural or national disaster or pandemic, there could be significant infrastructure and supply disruptions with global implications. Take, for example, Hurricane Maria in 2017. Approximately 50 pharmaceutical manufacturing facilities were in Puerto Rico at the time of the hurricane, and their capacity was impacted by the disaster. Because of robust supply chains and close coordination with FDA, the industry was quickly able to shift manufacturing to facilities in other areas and prevent long-term drug shortages.

Global Diversity Is A Good Thing2

Biopharmaceutical companies need to be able to make adjustments in the sourcing of their materials and shift manufacturing to different facilities in the case of an emergency that may result in disruptions, like Hurricane Maria. Building a new facility takes significant time and resources, so it is not a feasible solution in an emergency situation. Instead, companies typically build in redundancies and business continuity plans when setting up supply chains to mitigate any potential disruptions that may occur, including geographic diversity. Companies take into account the locations of each facility and have extensive measures in place to manage the various elements of the manufacturing process, including ensuring sufficient access to the skilled workers, specialized equipment and materials needed.  

In these unprecedented times, it is understandable that there are concerns regarding the continuity of the pharmaceutical supply chain and a desire for the United States to not be overly reliant on any countries that might pose a national security risk when it comes to pharmaceutical manufacturing. Discussions about ways to increase manufacturing in the United States are important to growing jobs and our economy, but we can’t diminish just how important geographic diversity in our pharmaceutical supply chain is when it comes to making sure we have uninterrupted supply of the medicines people need. After all, putting all your eggs in one basket (or country in this case) can be risky. 

Nicole Longo

Nicole Longo Nicole is director of public affairs at PhRMA focusing on Medicare, 340B, importation and more. She previously worked for a D.C.-based public affairs firm where she assisted a wide range of clients with communications efforts on everything from trade policy to agriculture policy to health care policy. Outside the office, Nicole can be found trying new restaurants (usually Italian), taking an occasional barre class and cheering on the Cincinnati Bengals.

Topics: Manufacturing

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