Viewpoint: Supply chain business strategies must evolve to offset shaky trade relations

Pharmaceutical companies must rethink their supply chain business strategies to ensure reliable delivery of medications amid souring trade relationships that may significantly affect pricing and availability of active pharmaceutical ingredients, according to an opinion piece published in STAT.

Tariffs and shaky trade relations pose significant risks to the pharmaceutical supply chain, Roddy Martin, chief digital strategist for TraceLink, an integrated supply network, writes in the op-ed. 

It is estimated that more than 80 percent of all active pharmaceutical ingredients come from abroad, specifically from China and India. The U.S. imported more than $3.9 billion worth of generic ingredients from China alone in 2017. Without reliable access to these ingredients, supply chain disruptions are likely. Tariffs on these ingredients will be financially disruptive as well.

"Compromising API importation will have financial impact on pharmaceutical companies and the patients they serve and could limit access to treatments because of potential slowdowns in production caused by limited API availability," Mr. Martin writes. 

As this uncertainty around tariffs and active ingredient availability of continues, business planning must evolve to become more continuous, integrated and agile to guarantee availability of medication and mitigate issues from rising tariffs.

"Industry thrivers and survivors will be the ones that modernize their integrated business planning infrastructures, analytics and process capabilities to proactively manage risk and avoid interrupting patients' access to safe and affordable medications," Mr. Martin writes. 

Access the full op-ed here. 

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