Supply chain risks force significant shift to near-shore medicines sourcing

Following intensified supply chain risks due to the COVID-19 pandemic, the number of requests for commercial proposals from European distributors when drug manufacturers are also based in Europe have increased by 69 percent in 2021 compared to the previous year, revealed new data from Pipelinepharma B2B pharmaceutical marketplace. 

According to a note by the European Commission (EC), shortages for medical products in the EU have increased 20-fold between 2000 and 2018. The document does not take into account the new challenges posed by the global pandemic. On the European market 40 percent of finished medicines come from China or India. Additionally, 80 percent of active pharmaceutical ingredients are also produced overseas.

Pipelinepharma hosts the largest European B2B pharmaceutical marketplace for finished dosage formulations. The platform provides access to more than 9 900 EU CTD dossiers, listing products from more than 600 EU GMP manufacturers. Approximately 56 percent of the platform buyers are based in Europe, with an increasing majority of licensing deals occurring inside the European Union block.

In November 2020, the EC adopted the Pharmaceutical Strategy for Europe, calling for access to affordable medicines, increasing innovation in the pharmaceutical industry, strengthening the defence strategy against future pandemics and making the EU a leader in public health. There are also increasing calls to strengthen European pharmaceutical manufacturing, with an additional effort for increasing market presence of generic and biosimilar medicines.

“These Europe-to-Europe deals indicate distributor interest to shorten the supply chain or at least to identify alternative sourcing options in case of delivery shortages. Increasing logistical costs and supply chain uncertainties also make localised sourcing more cost effective”, noted Mindaugas Zagorskis, Chief Executive Officer of Pipelinepharma.

“The supply chain risks and drug shortages are not unique to European customers. FDA also lists more than 100 medications that are in short supply,” Zagorskis continued. “The current situation calls for supply network risk mitigation, such as diversifying supply sources and taking geographic as well as geopolitical risks into account.”