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Bolstering the Covid medicine chest

PT Jyothi Datta | Updated on: Jan 10, 2022
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As yet another pandemic wave unfolds, drugmakers forecast under uncertainty to shore up their supply and production lines

A new year should be a time for new beginnings. But with the Omicron variant of SARS-CoV-2 driving a global surge in cases, 2022 starts for the pharmaceutical industry with much of the same, as they implement skills picked up over the last two years and “forecast under uncertainty”.

“Who would have thought, three years on, we would still be talking about these things,” says an industry veteran, capturing the sentiment expressed by many. After all, how does one plan in a pandemic, when there is a moving target.

“It is difficult. The [Covid-19] cases are rising again and so is the demand for products. Despite planning for, say, 10,000 cases, demand would shoot up if that increases to 6 lakh a day,” says SudarshanJain, a member of the Indian Pharmaceutical Alliance (IPA), on the day the US reported over onemillion cases a day.

Despite the planning, companies across the world will have to think and adapt on their feet to keep pacewith increasing demand, he says. India has the manufacturing capacities but, given the rapidly changing requirements, IPA’s 25 members (representing large domestic drugmakers) have a supply-chain group that meets every fortnight to review stock movement in the distribution channels, to see if inventory was waning, truck movement on the ground, factory attendance and so on, he said. And this could become a weekly routine, if need be.

Ironing out past issues

Taking stock at this level, he explains, helps address a surge in requirement if, for instance, there are rolling peaks in Covid-19 cases across the country. Presently there are no shortages, but there is an increase in demand for paracetamol and vitamins, for example.

Comparing with the early days of the pandemic, he says issues involving truck movement across the country and so on have been ironed out through constant communication between industry and the apex government departments. “At present, it appears there is no increased demand for oxygen and hospital beds like in the second wave. However, [Omicron’s] high transmissibility will bring up challenges in keeping staff safe, as quarantine periods can keep people off factories,” says Jain.

“There is no choice, measures have been put in motion and we have to manage,” says Daara Patel, member of the Indian Drug Manufacturers’ Association, on behalf of small and medium companies. Drugmakers are keeping buffer stock and stockpiling APIs (active pharmaceutical ingredients).

‘Educated guesses’

“But these prices are going through the roof,” he said, echoing the exact words of many in the industry. In some cases, input costs have doubled, says a drug company representative, urging the government to step in and cushion the blow, since they cannot raise medicine prices at this point in a pandemic.

Honing its skills from the past two years, industry is working on “educated guesses” and by “forecasting under uncertainty”, says Kedar Upadhye, Global Chief Financial Officer at Cipla, a drugmaker with a robust portfolio of Covid-19-related products, including exclusive arrangements on Roche’s tocilizumab and the antibody cocktail.

Where there are more than five drugmakers making a product, like antiviral remdesivir or molnupiravir, the supply pressure is“hedged”. Besides API buffers, in some cases the companies are “over-stocked” to be prepared for a surge in demand, he said.

The challenge is in manufacturing, if even a large percentage of people are to be quarantined following an infection, he agrees. “We are dealing with it through sequential rostering of people,” he says, referring to staggered shifts and systems to catch early symptoms.

Testing resilience

Lessons from the previous wave are working for businesses, saysSujay Shetty, PwC’s Health Industries Leader, where “supply chain resilience” (manufacturing more than is needed) is key, as opposed to the efficient just-in-time approach.

Beyond the material, container and freight-related problems, there is a real concern involving human resource, observesShetty.If there is another surge, staff at pharma factories are frontline workers and their safety is critical, he says, adding that “there is only so much you can plan in a pandemic”. Industry wants booster shots for factory staff, channel distributors and chemists.

Meanwhile, representatives are closely watching developments abroad, especially in South Africa, where Omicron was first reported. The steep rise in cases followed by the fall, they say, holds out hope.

Published on January 10, 2022

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