Friday, 29 March, 2024

Effect of COVID-19 pandemic on global pharmaceutical industries


The dark cloud of the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) has been hovering around the globe since a long time now and has had a profound impact on various industries resulting into consequences such as recession, complete upheaval of lifestyle, risk of economy crash among many more. Amidst the effect the virus has had on the industries, one major challenge it is been faced as is by the global pharmaceutical industries as there is an in built pressure of finding the solution to this unavoidable question. The impact of the pandemic is on major parameters of the industry such as cost of drugs and raw materials, supply chain, FDA policies, digital health, primary and secondary markets and many among others. In this blog, we will talk about the consequences occurred on each of these parameters as well as the face of pharmaceutical companies being affected country wise in order to gain a deeper understanding about the situation.
As the virus has been indigenous to china, it has worst affected the pharmaceutical industries the most due to the established that the country is the first world producer and exporter of active pharmaceutical ingredients (API) by volume. Initially, the industry was facing a trial time because china as the world’s biggest exporter for major countries went through a lockdown of two months acting as a major hindrance for the business. The significance of China’s role in global pharmaceutical industry can be explained with an example of india domestic pharma industry whose reliance on the imports from china is extremely high, more than 60% of API is been imported from the country. Certain specific APIs such as cephalosporins, azithromycin and penicillin, the dependence is as high as 80 to 90 per cent. Apart from that, the starting materials required for the formation of drug which are known as key starting materials (KSMs) is also exclusively supplied from china. However, there are alternative sources available for the above mentioned products but china still remains to be a preferred source considering the marketing rates. But, due to the unprecedented times that are being faced because of the virus and china being the first and worse affected country, the supply chain has been severely affected resulting into difficulties for the pharmaceutical industry considering the challenge of formulating a drug against the virus is on them.


The consequences of this virus has effected on the building blocks of the pharmaceutical industry, the cost of drugs and raw materials- the deadly virus which led to lockdown across the powerful companies increased the risk of shooting up the cost of raw materials required for formulating a drug, for e.g.: the cost of a paracetamol has steeped from 250-300 rupees per kilogram to 400-500 per kilogram indicating the effect pandemic has on the business and if the condition persists, the cost might increase and considering there is a phase of recession this might prevent a set of population from buying the essential drugs. The supply chain- the fragility of the chain of the industry is known for years but now with respect to the virus has taken the show as there are two types of drugs, a brand name drug whose products are protected with a reliable supply chain and profitable to the manufacturers, another is generic drug the profit is very marginal and supply chain is also lean, The API plant for these are often overseas with India and China dominating the API market. Since the hydroxycloroquine and chloroquine as drugs are been used against this virus, soon might cause a shortage and cause increase in demands of these medications. The FDA policies- due to the current situation, the drugs which have to undergo compliance with the rules of FDA might lead to relaxation in certain areas such as the federal law requires the manufacturers to inform the FDA in case of shortage for medications but this does not imply for the medical devices, due to the current situation this might also be taken into consideration by the FDA, it might also rethink and process the number of inspections on the overseas manufacturing plants more seriously. The data and analytics- due to usage of various amounts of data in order to formulate a particular drug there are various challenges also faced by the industry and in order to overcome those challenges and hastened the process against Covid-19, the data accumulated over the years can be used to help against the fight, this data might help them to run the clinical trials process more efficiently and further the post-marketing drug surveillance as well. The digital health- as social media and technology is taking a pace, this will help and be a user-friendly medium for the doctors and patients to interact and in times like these will encourage social-distancing and avoid patients to get out of their houses in order to be treated. The primary and secondary market- in order to control the drug shortages that often occur companies will reassess their strategies on the primary and secondary market for manufacturing. With the trial times that are present due to Covid-19, there are certain examples of pharmaceutical companies who are undergoing a tough period, one of this is AstraZencea which expects to see a drop in the revenue considering the economic status of China, the virus has hindered the growth and will not affect the company but also the other countries where the drug is been imported, but in order to compensate they have idealised the plan of making 9 million masks and also are hoping for use of their cancer drug as a potential medication against the virus , apart from that they have held hands with Sanofi in order to create a vaccine against the virus as fast as possible. Another industry is Bayer which has decided to provide three million chloroquine tablets to the states, with controversies revolving around the usage of the drug it can be said that if the drug turns out to be efficient it will help change the growth of Bayer in terms of the fight against Covid-19.Novartis is also helping the world by donating 130 million doses of hydroxychloroquine, apart from that it has pledge to fund a whooping 20 million dollars that will be provided to local communities facing a terrible time due to the pandemic. If global data is to believed, both these companies will have a huge profit from their drugs if accepted for usage. Other leading pharmaceutical company is Pfizer, the pneumonia vaccine of Pfizer has seen an unexpected sale as one of the indicative symptom of the virus is pneumonia hence use of this vaccine is preferred. Apart from these big industries, there are many other industries as well which are coming together in collaboration to fight against the virus.
As this long battle with the virus continues, the pharmaceutical industry as a whole are the warriors working hard in order to save the world from any other caused but yet the battle is still very long. The impact has been tremendous on the industry due to the virus but the efforts are taken are commendable and will soon help to find a cure against the deadly virus.
Name of Author: Prachi Storewala, OPF Project Intern

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