10 Key Vulnerabilities in the Global Pharmaceutical Supply Chain

The global pharmaceutical supply chain, while essential for modern commerce and interconnected economies, is riddled with vulnerabilities that can disrupt the flow of goods and services, leading to economic instability and potential crises. These vulnerabilities have been highlighted by various events in recent years, such as the COVID-19 pandemic and cyberattacks on critical infrastructure. Here are 10 key vulnerabilities of the global supply chain:

1. Dependency on Single Sources: Many supply chains heavily rely on a single source or a small number of suppliers for critical components or materials. This concentration puts the entire supply chain at risk if that source experiences disruptions due to natural disasters, geopolitical tensions, labor strikes, or other unforeseen events. Diversification of suppliers is crucial to mitigate this vulnerability.
2. Just-In-Time Inventory: The just-in-time (JIT) inventory strategy, designed to minimize inventory carrying costs, leaves little buffer for disruptions. This means that any interruption in the production or transportation process can quickly lead to shortages and delays, as seen during the early stages of the COVID-19 pandemic when demand for certain products far exceeded supply. More currently, the recent actions taken by the US FDA regarding cisplatin also reflect this vulnerability.
3. Complexity and Lack of Transparency: Modern supply chains are intricate networks spanning multiple countries and involving various intermediaries. This complexity can lead to a lack of transparency, making it difficult to identify weak points or potential risks. Without a clear view of the entire supply chain, it’s challenging to respond effectively to disruptions.
4. Geopolitical Factors: Political tensions, trade disputes, and changing regulations between countries can impact the smooth movement of goods across borders. Geopolitical events can lead to sudden trade restrictions, tariffs, or embargoes, disrupting established supply chain routes and relationships.
5. Cybersecurity Threats and other Criminal Activity: As supply chains become more digitized and interconnected, they become susceptible to cyberattacks. Hackers targeting critical nodes, such as logistics and communication systems, can bring the entire supply chain to a halt. This was demonstrated by the 2017 NotPetya ransomware attack, which disrupted shipping, manufacturing, and logistics operations globally. In the physical world, the prevalence of substandard and falsified medicines around the world indicates that the threat posed by criminal activity in this space requires a concerted effort to defeat it.
6. Natural Disasters and Climate Change: Extreme weather events, earthquakes, and other natural disasters can disrupt transportation, damage infrastructure, and lead to supply chain interruptions. With the increasing frequency and intensity of these events due to climate change, supply chains are facing higher risks.
7. Labor Issues: Labor disputes, strikes, and worker shortages can impact various points along the supply chain. From production facilities to transportation hubs, disruptions in labor availability can lead to delays and increased costs.
8. Infrastructure Vulnerabilities: The infrastructure that supports supply chains, including ports, roads, railways, and communication networks, can be susceptible to physical damage or technological failures. Disruptions in infrastructure can lead to delays in transporting goods and components.
9. Economic Shocks: Economic downturns can lead to reduced consumer demand, affecting the entire supply chain. Companies may cut back on production, leading to reduced orders for suppliers and subsequently impacting their ability to meet their obligations further down the chain.
10. Pandemics and Health Crises: The COVID-19 pandemic exposed the vulnerabilities of the global supply chain in unprecedented ways. Travel restrictions, factory closures, and labor shortages significantly disrupted the movement of goods and strained healthcare supply chains.

Science and technology come together to tackle these vulnerabilities

Taken together these factors create conditions in which the potential for substandard and falsified drugs to enter the supply chain increases, placing a premium on the ability to conduct drug quality control in the Pharma supply chain at different stages. The need for statistically driven destructive analyses and timely reporting to stakeholders in the supply chain has never been clearer. ARTiFACTS Verify offers an integrated approach to identifying substandard and falsified drugs:

• Identification of suspect medicines through on-site testing at any point in the supply chain using paper analytical device technology that is cost-effective and requires minimal training.
• Confirmation of the properties of medicines failing the initial test through further testing at specialist labs, using advanced scientifically recognized techniques, including high-performance liquid chromatography, mass spectroscopy, among others.
• Coverage of over half of WHO’s 600 Essential Medicines.
• Recording and analysis of results on a purpose-built blockchain platform which provides an immutable record of test results, including active pharmaceutical ingredients, product origin and manufacturer.

By focusing on medicines that have found their way into the supply chain, Verify satisfies the pressing need for a service capable of identifying suspect drugs before they reach patients even if they have eluded detection in the manufacturing process.