Even when manufacturing facilities are producing, widespread illness causes other delays.
Two marine cargo terminals in Seattle closed Friday (and will close each Friday in the foreseeable future), along with one in Baltimore that will be closed until Tuesday. Cargo volume from Asia that entered the U.S.at the Port of Los Angeles plummeted nearly 23% in the past 30 days. Next door, the Port of Long Beach reported a nearly 10% drop in its incoming Asian cargo.
13% of active pharmaceutical ingredients used in the U.S. are manufactured in China and another 18% are manufactured in India. That nation, in turn, imports approximately 70% of its APIs from China. The U.S. manufacturers 28% of its own APIs. Given the high concentration of APIs that are sourced from areas hard-hit by COVID-19, drug developers need to be nimble to continue to assure their supplies.
The problem during a pandemic is that those nations need them for their own immediate needs. Last week India banned the export of 26 basic pharmaceutical ingredients, including paracetamol and neomycin. The same day India’s Dinesh Dua, chairman, Pharmaceuticals Export Promotion Council of India, told Reuters that shortages could continue for months. Robert Redfield, director of the Centers for Disease Control and Prevention (CDC), said he lacks confidence that U.S. labs had sufficient reagents to extract DNA from patient samples for widespread virus testing.
Even when manufacturing facilities are producing, widespread illness causes other delays.
Like most biopharma companies, Nick DaSilva, CEO of Alcinous Pharmaceuticals in Rhode Island, said his company sources materials from domestic and international vendors. “COVID-19 has disrupted some key operations, especially when it comes to synthesizing our compounds. The costs of developing these compounds have now risen 5 to 10 percent as a result of changes to company operations.” Since news of the viral outbreak broke in January, he has been “trying to find alternative vendors and collaborators in areas not affected by the virus.”
Those options have narrowed significantly. The World Health Organization (WHO) reports that 127 countries were affected by COVID-19 as of 12:00 p.m. EST on Friday. For biotech logistics mangers, this means it is virtually impossible to source materials from nations that are not yet reporting any cases of COVID-19, or to avoid shipping items through affected regions.
This underscores, however, the need to distribute risks by engaging with multiple suppliers and carriers. It’s also advisable to work with multiple contract labs. Because research, development and manufacturing sites are affected throughout the world, engaging with multiple partners minimizes the risk caused by a disruption to any one facility.
Matt Lawrence, CEO of Virscio, a Connecticut-headquartered CRO, takes this approach even though he says his company hasn’t experienced any direct supply chain disruptions.
“Many of the APIs we are working with are formulated by study sponsors or by us, onsite,” Lawrence said. “We are anticipating possible shortages of personal protective equipment, but the real supply chain issues that are beginning to kick in, for us, are individuals who are confined away from work.”
In that regard, the ability to ship research materials could become an issue.
“We have the somewhat unique position of having a primary research base in the Caribbean, so we have long since worked out our supply chain. We have regular container shipments from Miami and maintain a reasonable inventory onsite,” Lawrence said.
Typically, that’s a four-month supply for its primate center. Early in the COVID-19 outbreak, however, Virsio expanded its inventory to allow it to withstand a six-month disruption.
The African green monkeys housed at its primate center are an important test system for their development of vaccines and other therapeutics because their physiology is very similar to that of humans, with immediate relevance to COVID-19.
As the ramifications of travel bans, quarantines and other precautions that may be put in place increase supply chain risks, Lawrence tries to find solutions.
“There is an opportunity for institutions to help alleviate interruptions by sharing supplies, equipment, and information where appropriate,” Lawrence said.
He’s working proactively now to prepare for any new supply chain disruptions. That means continuing to identify alternative sources of supplies, and planning for disruptions among carriers, transportation lanes, and even specific routes.
For example, if quarantines occur in Memphis, where UPS is headquartered, or Cincinnati, home to DHL, they could cause delays in shipments even though those carriers are highly automated. Prudent logistics managers should have alternative routes or carriers in mind to enable cargo to avoid highly infected areas and the slowdowns that may occur.
Lawrence, for example, said he’s anticipating a reduction in the number of container ships and flights to the Caribbean. “So, we’re remaining nimble, charting what’s moving and where the bottlenecks are forming.”
