Skip to main content
  • login
  • contact
  • language
    • English
    • Français
    • Español
    • Português
    • Deutsch
    • 简体中文
    • 日本語
  • search
X
GEP Logo GEP Logo
  • Company
    • Leadership
    • Customers
    • Partners
    • Sustainability at GEP
    • News
    • Events
    • Culture
    • Mission & Vision
    • Awards & Recognition
  • Solutions
    • Strategy
      • Procurement Consulting  
        • Procurement Transformation
        • Digital Procurement Transformation
        • Opportunity Assessment
        • M & A Services
        • Strategic Cost Management
        • Supply Risk Management
      • Supply Chain Consulting  
        • Environmental, Social and Governance
        • Socially Responsible Sourcing
        • Supply Chain Strategy
        • Supply Chain Diagnostics
        • Inventory Optimization
        • Network Optimization
      Software
      • GEP SMART  
        • Procurement Software
        • Direct Procurement Software
        • Indirect Procurement Software
        • Digital Procurement Transformation
        • Master Data Management
        • AP Automation
        • Spend Management
        • SMART S2P Technology
      • GEP NEXXE  
        • Supply Chain Visibility and Execution
        • Supply Chain Planning
        • Supply Chain Collaboration
        • Supply Chain Control Tower
        • Should-Cost Modeling
        • Inventory and Warehouse Management
      • GEP CLICK  
      • GEP MINERVA  
      Managed Services
      • Procurement Outsourcing  
        • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing
          • Category Management
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services
        • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing  
        • Planning & Forecasting
        • Inventory Management
        • Logistics Management
        • Supply Chain Data Management
        • Supply Chain Risk Management
  • Industries
    • Automotive
    • Chemicals
    • Consumer Packaged Goods
    • Energy & Utilities
    • Financial Services
    • Government & Nonprofit
    • Industrial Manufacturing
    • Life Sciences
    • Oil & Gas
    • Retail
    • Telecommunications, Media & Technology
    • High-Tech
    • Media & Entertainment
    • Software, Social & Platforms
    • Telecom
    • Travel & Hospitality
  • Knowledge Bank
    • Digital Transformation
    • Software & Technology
    • Strategy & Planning
    • Operations
    • Procurement
    • Sustainability
    • Insights From the Top
    • COVID-19 Resource Center
    • Inflation Strategies
  • Careers
    • Join Us
    • GEP Per Se
    • Campus Connect
  • Partners
   
  • GEP Strategy ›
    • GEP Strategy
    • ‹ Back
      • Procurement Consulting ›
        • Procurement Consulting
        • ‹ Back
          • Procurement Transformation ›
            • Procurement Transformation
            • ‹ Back
              • Procurement Strategy
              • Org. Design & Implementation
              • Capability Building
              • Change Management
              • Governance & Performance
              • Processes & Policies
              • S2P Operations
              • Sourcing & Category Management
              • Technology
          • Digital Procurement Transformation
          • Opportunity Assessment
          • M&A Services ›
            • M&A Services
            • ‹ Back
              • M&A Clean Room
          • Strategic Cost Management ›
            • Strategic Cost Management
            • ‹ Back
              • Zero-Based Budgeting
          • Supply Chain Risk Management
      • Supply Chain Consulting ›
        • Supply Chain Consulting
        • ‹ Back
          • SUSTAINABILITY AND RESILIENCE
          • Environmental, Social and Governance
          • Socially Responsible Sourcing
          • Scope 3
          • PLAN
          • Digital Planning, S&OP, S&OE
          • Collaborative Planning
          • PROCURE
          • Source To Contract
          • Procure To Pay
          • MAKE
          • Inventory Strategy & Management
          • Operations & Manufacturing Excellence
          • DELIVER
          • Network Strategy & Optimization
          • Warehousing & Transportation Management
  • GEP Software ›
    • GEP Software
    • ‹ Back
      • GEP SMART ›
        • GEP SMART
        • ‹ Back
          • Procurement Software
          • Direct Procurement Software ›
            • Direct Procurement Software
            • ‹ Back
              • Bill of Materials Management
              • Data Analytics & Reporting
              • Inventory Management
              • Master Data Management
              • Quality Management
              • Supplier Collaboration Portal
              • Supply Chain Operations
          • Indirect Procurement Software ›
            • Indirect Procurement Software
            • ‹ Back
              • Source-to-Contract
              • Spend Analysis
              • Savings Project Management
              • Category Management
              • Contract Management
              • Savings Tracking
              • Sourcing
              • Supplier Management
              • Procure-to-Pay
              • Guided Buying
              • Procurement Portal
              • Catalog Management
              • Order Processing
              • Invoice Management
          • Digital Procurement Transformation
          • Master Data Management
          • Product Accessibility
          • AP Automation
          • Spend Management
          • SMART S2P Technology
      • GEP NEXXE ›
        • GEP NEXXE
        • ‹ Back
          • Supply Chain Visibility and Execution ›
            • Supply Chain Visibility and Execution
            • ‹ Back
              • Inventory and Warehouse Management
              • Logistics Visibility
              • Control Tower
          • Supply Chain Planning ›
            • Supply Chain Planning
            • ‹ Back
              • Supply Chain Control Tower
              • Should-Cost Modeling
              • Demand Planning
              • Supply Chain Bill of Materials
              • Supply Chain Direct Sourcing
              • Supply Planning
          • Supply Chain Collaboration ›
            • Supply Chain Collaboration
            • ‹ Back
              • Forecast Collaboration
              • Purchase Order Collaboration
              • Quality Collaboration
              • Capacity Collaboration
              • Quality Management Software
          • Supply Chain Control Tower
          • Should-Cost Modeling
          • Inventory and Warehouse Management
      • GEP CLICK
      • GEP MINERVA
      • Innovation ›
        • Innovation
        • ‹ Back
          • Emerging Technologies
          • Native to Cloud
          • Native to Mobile
          • One Unified Platform
          • Security
          • User-Centric Design
  • GEP Managed Services ›
    • GEP Managed Services
    • ‹ Back
      • Procurement Outsourcing ›
        • Procurement Outsourcing
        • ‹ Back
          • Source-to-Contract
          • Spend Analysis
          • Strategic Sourcing ›
            • Strategic Sourcing
            • ‹ Back
              • MRO
              • CAPEX
              • Logistics
              • Packaging
              • IT & Telecom
              • Energy
              • Direct Materials
          • Category Management ›
            • Category Management
            • ‹ Back
              • Contract Management
              • Supplier Performance Management
              • Savings & Compliance Tracking
          • Supply Market Intelligence
          • Tail-Spend Management
          • Procurement Support Services ›
            • Procurement Support Services
            • ‹ Back
              • eSourcing
              • Supplier Performance Management
              • Savings & Compliance Tracking
              • Sourcing Support
          • Procure-to-Pay
          • Cost Recovery & Invoice Auditing
          • Accounts Payable
      • Supply Chain Outsourcing ›
        • Supply Chain Outsourcing
        • ‹ Back
          • Planning & Forecasting
          • Inventory Management
          • Logistics Management
          • Supply Chain Data Management
          • Supply Risk Management
  • Industries ›
    • Industries
    • ‹ Back
      • Automotive
      • Chemicals
      • Consumer Packaged Goods
      • Energy & Utilities
      • Financial Services
      • Government & Nonprofit
      • Industrial Manufacturing
      • Life Sciences
      • Oil & Gas
      • Retail
      • Telecommunications, Media & Technology
      • High-Tech
      • Media & Entertainment
      • Software, Social & Platforms
      • Telecom
      • Travel & Hospitality
  • Knowledge Bank ›
    • Knowledge Bank
    • ‹ Back
      • Digital Transformation
      • Operations
      • Procurement
      • Software & Technology
      • Strategy & Planning
      • Sustainability
      • Podcasts
      • Insights from the Top
      • COVID-19 Resource Center
      • Inflation Strategies
  • Company ›
    • Company
    • ‹ Back
      • Leadership
      • Customers
      • Partners
      • Sustainability at GEP
      • News
      • Events
      • Culture ›
        • Culture
        • ‹ Back
          • GEP Core Values
          • Women@GEP
          • Diversity
          • GEP Cares
      • Mission & Vision
      • Awards & Recognition
      • Contact Us
  • Global Presence ›
    • Global Presence
    • ‹ Back
      • Americas ›
        • Americas
        • ‹ Back
          • English
          • Español
          • Portugués
      • Europe ›
        • Europe
        • ‹ Back
          • English
          • Deutsch
      • Asia-Pacific ›
        • Asia-Pacific
        • ‹ Back
          • English
          • 中文
      • Middle East ›
        • Middle East
        • ‹ Back
          • English
          • العربية
  • Contact Us
  • Careers ›
    • Careers
    • ‹ Back
      • Join Us
      • GEP Per Se
      • Campus Connect
  • Language ›
    • Language
    • ‹ Back
      • English
      • Français
      • Español
      • Deutsch
      • Português
      • 简体中文
      • 日本語
  • Rapid Response from GEP
  • BLOGS
  • Strategy
  • Technology
  • MIND
Contact Us
  •  
  •  
  •  
  •  
  •  
  •  
  •  

Breadcrumb

  1. HOME
  2. BLOG
  3. MIND
  4. HOW PHARMA IS DEALING WITH API SHORTAGES
Blog Image

How Pharma Companies are Dealing with API Shortages

  • Many US-based pharma companies are planning to reshore and move their production closer to home and consumer demand.
  • However, a major challenge in their onshoring efforts is the lack of investment in manufacturing site infrastructure.
  • Supply chain disruptions, booming transportation costs, disorganization and slowdown of API production lines, and the rise in energy prices have compounded the problems of pharma companies.

November 22, 2022 | Pharma and Life Sciences Blogs

The U.S. government continues to make a push for more domestic manufacturing with its 2021 “Made in America” legislation.

The question now is: Can this push benefit the country’s ailing pharma industry? Can it change the active pharmaceutical ingredients (API) manufacturing scenario in the next decade and lead to increased production of APIs back home?

API Prices Continue to Increase

The surging prices of APIs have become a major concern in the pharma industry. In the last couple of years, the biggest hike was noticed in the price of methylprednisolone, a high-demand medicine for COVID-19. Its price rose from around USD 1,000 to USD 2,800 within a week.

Booming transportation costs, disorganization and slowdown of API production lines, and the rise in energy prices have led to a steep price hike. The health crisis during the pandemic has highlighted structural supply difficulties that are mainly due to the existence of a fragmented and vulnerable API manufacturing process.

The U.S. imports nearly 70% of APIs. While China contributes ~15% to the U.S. API market, the European Union, which is currently involved in the Russia-Ukraine conflict, offers ~25% of the API manufacturing facilities.

Supply chain disruption has led to delays in raw material availability and shortages. The pandemic magnified the challenges of pharma companies’ heavy reliance on foreign contract manufacturing organizations (CMOs). Delivery times for shipments from Chinese CMOs to the U.S. West Coast took less than 50 days till early 2019. In January 2022, these delivery times hit a record high of 113 days.

How Pharma Companies Suffered

Pharma companies have undergone a massive test in recent years. While the COVID-19 pandemic kept doctors and healthcare professionals on their toes, it also exposed wide gaps in pharma supply chains.

The shortage of staff, medicines as well as facilities has put a lot of pressure on pharma companies to quickly transform their operations, especially with regards to the supply chain. Companies must act now, identify potential risks and mitigate their impact by leveraging end-to-end supply chain visibility.

Can Nearshoring Help Overcome the Challenges?

Many US-based pharma companies are now planning to move their production back home. As a result, there has been a sharp surge in onshore API programs.

However, the lack of investment in manufacturing site infrastructure poses a major challenge to pharma companies’ onshoring efforts. Many companies have faced barriers and a lack of capacity while aiming to move back a manufacturing project.

What Lies Ahead

The U.S. produced most of the drugs it consumed until the 1980s. The mass transition to overseas contract manufacturing was mainly because of cost advantage. Labor in developing countries such as India and China saved companies up to 40% annually compared to U.S. labor wages.

However, persistent supply chain delays and the U.S. government push for more domestic manufacturing have encouraged pharma companies to re-shore. This movement may change the API manufacturing scenario in the next decade with increased production returning to the U.S. or Europe.

 

Tags: pharma

Add Comment +

FEATURED POST

...
Supply Chain Strategy Blogs

How to Effectively Monitor Scope 3 Emission Reporting From Your Supply Chain

...
Supply Chain Software Blogs

From Cost to Resiliency: How Supply Chain Priorities Have Changed

    BLOG CATEGORIES

  • Marketing Blogs
  • Professional Services Blogs
  • Pharma and Life Sciences Blogs
  • IT & Telecom Blogs
  • Logistics Blogs
  • Chemicals Blogs
  • Energy & Utilities Blogs
  • Market Intelligence Blogs
  • Oil and Gas Blogs
  • MRO Blogs
  • Facilities Management Blogs
  • Supply Chain Blogs
  • Human Resource Blogs
  • Procurement Process and Excellence Blogs
  • Agro Blogs
  • CAPEX Blogs
  • Direct Materials Blogs
  • Packaging Blogs
  • Automotives Blogs
  • Healthcare Blogs
  • Corporate Travel Blogs
  • Metals & Minerals Blogs
  • Technology Blogs
  • Awards and Events Blogs
  • Category Management Blogs

TAGS

sustainability
Procurement Software
supply chain strategy
Inflation
Russia-Ukraine War

By checking the box below, you consent to GEP using your personal information to send you thought leadership content – such as white papers, research reports, case studies – and other communications. GEP representatives may contact you to provide additional information or answer questions.

If at any point in time you decide to withdraw your consent, you may unsubscribe by emailing your request to us at privacy@gep.com.

Please refer to the GEP Privacy Statement to understand how we manage and protect your personal information.

Terms of Use | Privacy Statement

Contact Us

Ask Us

Send us your question(s)

RFP

Request for a business proposal

Feedback

Share your thoughts, comments and suggestions

Demo

Schedule a live demo of our software

Discover
STRATEGY
Strategy
  •   Procurement Consulting
  •   Digital Procurement Transformation
  •   Strategic Cost Management
  •   Opportunity Assessment
  •   Supply Chain Risk Management
  •   Supply Chain Consulting
  •   Supply Chain Strategy
  •   Supply Chain Diagnostics
  •   Inventory Optimization
  •   Procurement Transformation
  •   Sustainability and ESG Consulting
SOFTWARE
Software
  •   Procurement Software
  •   Supply Chain Software
  •   Source-to-Contract
  •   Procure-to-Pay
  •   Supply Chain Planning
  •   Supply Chain Collaboration
  •   Supply Chain Visibility & Execution
  •   Supply Chain Control Tower
  •   Should-Cost Modeling
  •   Inventory & Warehouse Management Software
  •   Source-To-Pay Software
MANAGED SERVICES
Managed Services
  •   Procurement Outsourcing
  •   Strategic Sourcing
  •   Tail-Spend Management
  •   Category Management
  •   Procurement Support Services
  •   Supply Chain Outsourcing
  •   Supply Chain Planning & Forecasting
  •   Inventory Management
  •   Logistics Management
COMPANY
Company
  •   About Us
  •   Leadership
  •   Customers
  •   Sustainability at GEP
  •   Careers
  •   News
  •   Awards
  •   Partners
  •   Contact Us

Fresh Insights, Now on Your Phone

  • Dowmload On The App Store Button
Stay Connected
  •  
  •  
  •  
  •  

Latest Tweets

  • Conquering 2023 Supply Chain Setback - 31 Jan 2023 https://t.co/wg0MdRATfh

  • On the occasion of Republic Day in India, GEP Hyderabad held an art competition and GEPpers showed their creativity… https://t.co/NSHrXILbiv

  • We're proud to announce the extension of our #procurement services agreement with @Macys's Inc. to help drive… https://t.co/Hgn4uaGbW0

  • The #SupplyChain and #procurement #software market is in flux amid #MnA. If your software provider gets acquired, w… https://t.co/orQlKUZB4X

  • #SupplyChain #disruptions are a reality in today's unpredictable world. Learn how @gepsoftware has helped #SGS resp… https://t.co/jA2GnbWIBg

  • What steps can companies take to achieve #ESG goals effectively? Well, they can start with #procurement. Learn how… https://t.co/HGEfNyGdeD

  • #ElectricVehicles are a key part of the auto industry's plan to become #NetZero by 2050. But EVs aren't enough on t… https://t.co/YlEoys6vTA

  • Why did Asahi choose #GEP as their #procurement and #SupplyChain partner? Check out this video featuring Carmen Rad… https://t.co/RmstcfJXtm

  • GEPpers know how to have a good time! Check out a glimpse of our Winter Party at the GEP Prague office. We are hir… https://t.co/BqVK6XkpHv

  • #Inflation has dampened expectations for GDP growth and raised the risks of a #recession. What can #procurement lea… https://t.co/Hn1R5bxZXn

  • 4D seismic #technology is opening deep-sea #OilAndGas reserves for exploration, lowering costs and optimizing reser… https://t.co/Omq51vlEq7

  • The #GEP Europe Outlook 2023 Roadshow is coming to a city near you! Join us to learn the seven critical priorities… https://t.co/Hzv68et4Rr

  • GEP wishes a Happy Republic Day to all the Indians around the world.  We are #hiring. Explore our careers section:… https://t.co/RKTsyBfQFc

  • Sustainability Outlook for 2023: Trends, Insights and Actions 25 Jan 2023 https://t.co/58KIepy577

  • #Pharma companies are reshoring production, but shortages of active pharmaceutical ingredients make it a challenge.… https://t.co/a3uQJhn7tx

  • With uncertainty looming over 2023, there’s no end in sight to the challenges for #SupplyChain and #Procurement lea… https://t.co/O9tWELnt2i

  • Tight timelines and #COVID-related uncertainties made post-merger data ecosystem #convergence a tricky task for thi… https://t.co/RY6du0AP1D

  • Discover the keys to operating a strategic #procurement and supply function at an essential #PetroChemicals company… https://t.co/sJZmqhnWvS

© Copyright GEP 2022. All rights reserved. Terms of Use | Privacy Statement | Cookie Policy |   | Quality Policy | GEP Logo