Tested by a pandemic, pharma supply chain showed resilience

Editorial Note: This article is custom content created in collaboration with AmerisourceBergen.

When the COVID-19 pandemic began to sweep across the U.S. this year, early fears of shortages of critical pharmaceutical supplies and life-saving drugs were quickly abated by a responsive and resilient supply chain.

As the crisis unfolded and the public’s attention was focused on shortages of everyday items like toilet paper, paper towels and disinfectants, patients with critical needs for treatments that ranged from insulin to inhalers also began to fret.

Manufacturers worried as well. Was the pharmaceutical industry prepared to meet the challenge? Particularly since—according to industry averages—between 70% to 80% of APIs (active pharmaceutical ingredients) are manufactured in China and roughly 40% to 50% of generic drugs are produced in India. On top of that were early shortages of protective equipment like face masks, face shields and gowns for front-line healthcare workers and other essential workers like associates at AmerisourceBergen’s distribution centers. AmerisourceBergen is one of the nation’s primary pharmaceutical wholesale distribution entities. The company picks, packs and ships nearly 4 million pharmaceutical and healthcare products daily and services more than 65,000 hospitals, pharmacies, physicians’ practices and clinics annually.

“Our family and friends used to say they didn’t really understand what we did every day,” Heather Zenk, Senior Vice President for Strategic Global Sourcing at AmerisourceBergen, said. “Now supply chain is something we talk about around the kitchen table.”

The immediate response from the company was to ensure that its front-line associates—primarily distribution center associates, patient-facing nurses and pharmacy staff—were monitored for health and provided the protective equipment they needed. If anyone across AmerisourceBergen could work from home, they were asked to do so.

Concurrent with those actions was a program to support front-line associates that provided day-care needs and paid time off for employees who either needed to quarantine themselves or their families. Additional steps included daily temperature checks, constant sanitization of warehouse sites that now utilize ultraviolet robots, and an app with Centers for Disease Control questions to help monitor associates’ health.

Having a good business continuity plan

“What served us, our partners and customers well was our ability to be resilient and have a nimble business continuity plan,” Erin Horvath, President of AmerisourceBergen’s Distribution Services, said. “We were able to handle certain circumstances like having to close a distribution center for a short period of time, divert product orders to another facility and still meet the needs of our customers.”

An example was the company’s closure for several days of its Newburgh, N.Y. distribution facility at the height of that state’s COVID-19 outbreak last spring although the site’s positive tests for the virus were very low.

“We saw associates were getting uneasy about coming in and we wanted them to know we cared and wanted to protect them, so we decided to close that center,” Horvath said. “We could take that action because we knew we had the network to support customers by servicing them through our other distribution centers.”

With a network of 33 human health and specialty distribution centers and 19 animal health distribution centers and depots nationwide and about 4,000 associates manning them, AmerisourceBergen was able to implement a robust business plan with a long track record of responding to other natural disasters like hurricanes, earthquakes and wildfires. Only, instead of day and weeks of response, the pandemic has persisted for months and will likely continue through the first half of next year.

That history of successful crisis response is supported by close partnerships with a variety of government agencies, as well as its relationship with Healthcare Ready, a Washington, D.C.-based nonprofit focused on supporting the healthcare supply chain by collaborating with government entities and the private industry sector.

Such collaboration between the private sector, government agencies and with non-profit health organizations will play an integral part as vaccines developed to fight COVID-19 start to become available in the coming months and year.

Partnerships across the board will be a key part when it comes to distributing and administering those vaccines, and both Horvath and Zenk agree that the centerpiece to a successful outcome has and will continue to be open and transparent communication.

“Early on, we knew to invest the time in that kind of communication so that everyone wasn’t fighting the same battle for resources,” Zenk said. “Because of that, we were able to respond to customers very honestly and quickly. We saw hospital customers changing therapies as they learned more about how to treat the virus; we were able to routinely check in with them on the therapeutics they needed most and start supporting them right away.”

Zenk also points out that with the attention mostly focused on the pandemic response this year there were about 20 launches of new oncological treatments. A clear indication that despite the immediate crisis, innovation in the pharmaceutical industry continues, and that innovation needed to be distributed to patients in the same manner they were accustomed to getting under normal circumstances.

Preparing for a vaccine rollout

As vaccines become available, they will initially be allocated to those most at risk like front-line health-care workers, essential workers and populations such as the elderly and people with co-morbidities. When a nationwide vaccine program is rolled out and begins to reach critical mass deeper into 2021 it will likely involve multiple manufacturers offering multiple treatments, all of which will need the strength of the full national supply chain and distribution system.

“Something of this scale has never been undertaken before,” Horvath said. “We are talking about a vaccine that includes two doses and requires frozen and ultra-frozen storage and transportation capabilities—and will need to be available to the entire population of the United States.”

AmerisourceBergen has extensive experience in managing ultra-low temperature products and is standing ready to support the vaccine distribution effort when needed, both Horvath and Zenk said.

Clearly it will involve an enormous effort by the government and private industry and will require independent neighborhood pharmacies, large retail pharmacies and physicians to have a voice in the project.

“We have invested hundreds of millions of dollars in our technology and in our distribution network in the last 10 years and in the past months we’ve seen that those investments pay off. They have given us the agility and resilience to do things in a very quick manner,” said Horvath.

“One of the great things I’ve observed during this time is how the national healthcare system has been working more like a community,” Zenk added. “A hospital in one region might say they are doing okay, but then ask us to make sure another hospital in another area that might be a hot zone gets what they need.”

To learn more about how AmerisourceBergen anticipates supply and demand and the role of distributors in the supply chain, check out: https://www.amerisourcebergen.com/value-of-the-distributor.