How are pharma supply chains reacting to COVID-19? Without info, it's hard to tell: analyst

The novel coronavirus is putting pharma's complicated global supply chain under strain, no question. What's up in the air is just how supplies could be affected––and unfortunately, analysts just can't be sure. 

Why? Lack of transparency, for one thing. A dearth of information is making it hard on pharma watchers who'd like to diagnose the growing impact COVID-19 has had on individual companies' struggles, SVB Leerink analyst Ami Fadia wrote in a note to investors Monday.

The firm scouted around the industry for feedback on manufacturing and drug supplies, and China obviously played a role in their responses. Given the country's large role in manufacturing active pharmaceutical ingredients (API), generic and branded drugmakers are keeping a close eye. 

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Generics makers in particular rely heavily on API and raw materials manufactured in China. Copycat drugmakers acknowledged "minor exposure to API from China" when SVB Leerink asked, but "acknowledged exposure to China on key starting materials," Fadia wrote. "With COVID-19’s impact expanding globally, it is important to watch the exposure to manufacturing sites across the world."

For branded drugmakers, however, a long-lasting crisis could be easier to weather, especially with a slew of drugmakers pointing out growing stockpiles in case of a lockdown.

On Sunday, Amarin said it was working with a "significant stockpile" of its fish-oil derivative Vascepa, even with none of its manufacturing housed in China. Amarin said it was barring its field sales force from "face-to-face" interactions until at least March 30. 

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Fadia said Amarin indicated its stockpile would last 30 weeks, or about seven and a half months. 

Other drugmakers, including Xeris, Jazz Pharmaceuticals and Exparel, indicated to Fadia's team that they had limited exposure to Chinese supply and had set aside stockpiles that could last between four and five months in the event of further disruption. 

Another area where analysts are paying close attention is to prescription tracking services. Fadia wrote her team was looking for unusual decreases or increases in scripts for drugs, which could affect drug pricing in the coming months.