Global restrictions spawned by the coronavirus pandemic have sent transport costs skyrocketing for generics and biosimilar makers, a trade association finds. But despite the dire report, COVID-19 might not be all bad news for the industry.
Average shipping costs have jumped by 224% as the pandemic added new kinks to the global drug supply chain, a survey from the Association for Accessible Medicines (AAM) found.
In a notable case, one drugmaker's cost to ship its medicines skyrocketed by 413% as an economic slowdown and restrictions on international travel raised the price of global transport, AAM said.
"The global pharmaceutical ecosystem is built on a highly complex supply chain,” AAM interim CEO Jeff Francer said in a release. “This ongoing crisis illustrates the importance of developing new strategies and policies that enhance the pharmaceutical supply chain in the U.S. and increase our nation’s self-sufficiency.”
AAM highlighted government-mandated work-from-home orders and "unpredictable" trade restrictions as cost drivers during the pandemic.
After some "initial shocks" from the pandemic, the global generic drug supply chain is likely to rebound and deliver strong growth numbers despite some potential "spot shortages," Bernstein analyst Ronny Gal said in a March note to investors.
A potent mixture of patient and channel stockpiling and manufacturer "allocation" measures will drive generics pricing upward in the short term, Gal argued, and could have a "lasting positive impact" on the industry in future quarters.