Supply Chain Strategies for COVID-19 Vaccine

As the first COVID-19 vaccine developed by Pfizer and BioNTech is rolled out in the U.S., U.K. and other parts of the world and another 987-odd drugs and vaccines are in development (with 16 in the final phase)^{1 2} as of Dec. 15, 2020, pharma companies, Contract Manufacturing Organizations (CMOs) and suppliers are racing against time to put in place a sound production and supply chain plan so the vaccines can reach people speedily and securely.

There are, however, considerable uncertainties and variables at this stage that can impact the production and distribution of the vaccine:

• Uncertainties on approvals: It’s not entirely clear how many vaccines will be approved. This affects the total amount of vaccine doses available (in the short to medium term) and consequently, production and distribution capacities.
• Nature of vaccine: An approved vaccine that needs a continuous cold chain and specified temperature range will impact not only its distribution and allocation, but it will also have have specific packaging requirements (for some vaccines, packaging must withstand temperatures as low as minus 80 degrees Celsius). Both Pfizer and Moderna vaccines must be stored at below-zero temperatures, with the Pfizer vaccine requiring dry ice and special refrigeration.³
• Number of vaccinations needed: How much vaccine a country needs depends on the population to be vaccinated and the vaccination timeline. This depends on public health care capabilities and government policies. For example, there will be no compulsory COVID-19 vaccinations in Germany.⁴
• Efficacy of vaccine: The efficacy rate of a vaccine will decide how often people need to be vaccinated to contain the pandemic, which will impact production and distribution. For example, the Pfizer and Moderna vaccines require two doses that must be administered in a short sequence to be effective,⁵ so there can’t be a lag in the supply chain.

This white paper examines the strategies that pharmaceutical companies are currently pursuing to address the challenges in purchasing and supply chain management while factoring in uncertainties, so that when the vaccines are approved, there will be no delay in getting them to customers.

KEY PROCUREMENT AND SUPPLY CHAIN CHALLENGES

The most recent bottlenecks created by a high global demand for breathing apparatuses, personal protective clothing, sanitizers and medical disinfectants, and COVID-19 test kits, etc., have highlighted the weakest points along the COVID-19 supply chain. There will be even more challenges in the procurement, production and distribution of vaccines.

Untested Supply Chain

While there are existing suppliers of respirators, disinfectants and other items needed to control and manage the COVID-19 infection, that isn’t the case for the vaccines. This is not an existing supply chain that only needs to be optimally maintained, but rather, it’s a supply chain that does not exist yet. The management of an existing supply chain can cause considerable problems, but a new supply chain brings with it far greater complexity, which applies to all its individual components — from procurement and production to storage, distribution and transportation.

Source: GEP

Product Features

The COVID-19 vaccine is being developed on an accelerated timeline. Usually, it takes five to 20 years to develop a vaccine and test its stability. Vaccines developed under emergency authorizations typically lack stability data, resulting in stricter temperature requirements along the entire supply chain.

Cross-continental and inter-continental transports are relatively easy to manage, as the logistics infrastructure is welldeveloped at the vaccines’ production sites, which are mainly located in industrialized regions. However, there are also scenario-independent risks in QA/QC release or customs clearance due to the consistent cooling requirements. Considerable problems are to be expected in downstream distribution. That’s because these types of cold chains, especially in like the ones the stricter scenario, do not exist.

Source: GEP

The final choice of supply chain distribution model strongly depends on temperature requirements, transport distances, quantities, and factors such as storage capacity and availability of packaging and equipment. Vaccine distribution beyond the 25 countries with the most advanced logistics systems could face cold chain challenges due to the lack of reliable electricity.⁶ Currently, large parts of Africa, South America and Asia cannot be readily supplied at scale due to the lack of cold chain logistics capacity needed for life science products.⁷

The Second COVID-19 Wave

Many countries had relaxed their restrictions, but lockdowns — some for limited periods — were again being enforced in October to contain the second wave. This will have increased the likelihood of delays and disruptions.

HOW PHARMA COMPANIES ARE PREPPING

Pharmaceutical enterprises and other companies involved in vaccine development, production and distribution — such as suppliers of raw materials, CMOs, and packaging, transportation and logistics companies — are all preparing intensively for the vaccine. Businesses are using a variety of approaches.

Partnerships for vaccine production

Many pharma companies are pursuing biotechnology partnerships to facilitate vaccine production. This approach is needed, because the machines that are being used to produce COVID-19 vaccines are also busy producing other drugs. Dermapharm, BioNTech and Pfizer, for instance, have partnered on vaccine production and are targeting 100 million doses in 2020 and 1.3 billion doses by the end of 2021.⁸ Many pharma firms are also pursuing a growth strategy and increasing their number of production plants. For instance, Johnson & Johnson has opened new plants in Europe and Asia.⁹

Development of distribution locations

Logistics service providers are investing heavily in new pharmaceutical hubs. For example, Kuehne+Nagel has set up two new locations in Brussels and Johannesburg.¹⁰ In addition to the development and expansion of suitable locations in the logistical network, partnerships are also being established. The U.S. Centers for Disease Control and Prevention (CDC) has signed a contract with McKesson for that company to be the sole distributor of Moderna’s vaccine in the U.S., once that vaccine receives emergency use authorization.¹¹

Supplier capacity expansion

Many pharma enterprises are working to help increase the procurement capacities of their key suppliers for packaging, raw materials and chemicals so that there is no delay in starting vaccine production. Usually, raw material suppliers are smaller biotech companies with limited ability to suddenly scale up their operations and capacities; they are dependent on their upstream suppliers, who are themselves facing comparable challenges.

Source: GEP

SOLUTIONS FOR PROCUREMENT AND SUPPLY CHAIN MANAGEMENT

A network of diverse supply chain partners is required to build an agile, responsive supply chain. Focusing solutions on one specific scenario is of little value, as the probability that only that precise scenario will occur is extremely low. One factor is common to all possible scenarios and variants: uncertainty. This uncertainty must be managed.

Enterprises must prioritize these five factors when evaluating procurement and supply chain management solutions:

1. Collaboration

How can disruptions or delays in the transportation or storage of the vaccines be addressed? How can a lack of quality in the product be tackled? Through what intermediate stations can the cold chain be maintained? To address any of these matters, and more, you need an open, collaborative approach.

Close cooperation between many different companies and external partners in the supply chain is essential for the efficient production and distribution of the vaccines; when working with production partners, it is critical to coordinate quantities, dates and capacities. This cooperation cannot be limited to Tier 1 suppliers either, as efficient production depends on smooth communication and collaboration on requirements, procurement quantities, timing and quality.

Determination of sales volumes and timing also requires collaboration with governments, customers and other parties.

2. Flexibility and Speed

Flexibility across all stages of purchasing and supply chain is equally vital. Some of the issues to consider are:

• Demand can change on short notice.
• Deadlines can be postponed.
• Storage and transportation problems can occur.
• The quality of continuous cold chains cannot always be guaranteed.
• Suppliers may not be able to deliver the agreed quantities consistently.
• Unexpected delays can occur at customs.

Because the vaccines’ production and distribution are on an unprecedented scale, problems such as these will arise. Ensuring a steady vaccine rollout will require an agile, responsive supply chain.

3. Visibility and Transparency

Collaboration and agility are only possible when there is real-time transparency and visibility among supply chain partners. Transparency includes the exchange of data, status messages, order quantities and joint planning. Data must be collected in real time and made available to all relevant supply chain partners to enable a quick, purposeful response.

4. Risk Management System

An existing risk management system helps identify procurement and distribution risks, ideally before they occur. In procurement, these risks will typically involve the delivery of raw materials or packaging. The loss of a supplier — whether permanent or temporary — due to lockdowns is also a probable risk. There will be similar risks in production and distribution. Early identification and alerts about possible and likely risks can prevent, or significantly reduce, disruptions in procurement, production and distribution.

5. Decision Support and Scenario Planning

Early identification of risks — such as knowing a supplier has problems with the timely delivery of urgently needed coolers for vaccine transportation — is critical and should also be supported by concrete response plans.

Assume that problems and bottlenecks can and will occur and prepare for what-if scenarios. What happens if population segments decide not to be vaccinated? How will this affect the capacities and deadlines for purchasing, production and procurement? These and similar issues — and frequently changing scenarios in the coming months — will require quick, targeted and economically sound decisions, which in the best case will have already been considered in scenario planning.

Source: GEP

RECOMMENDED: A DIGITAL PLATFORM

A digital platform is key to successful vaccine production and distribution. The number of supply chain partners involved, short-term changes of network players, and massive amount of data to be processed and evaluated cannot be managed without robust solutions. Cloud solutions are particularly suitable for this task. Leading platforms also allow for the quick activation of new partners or the removal of previously involved players. And, as the vaccine distribution is a global initiative, the solution must support many languages.

It is crucial that the solution be easily taught, easy to use and intuitive.

The solution must also support all purchasing and supply chain management functions, such as collaboration with suppliers and supply chain partners, joint sales planning, category management and supply chain risk management. A single-provider solution is optimal, and integration of individual parts of procurement and supply chain is critical. Planning without understanding feasibility leads to lost time, avoidable costs and duplication of activities. Too, data must be collected, processed, evaluated and made available to all relevant partners. Data summary and integration can be achieved with supply chain control towers, which leverage modern technologies such as AI, Big Data and analytics to quickly distill critical data to support a targeted response.

Source: GEP

SET THE RIGHT COURSE NOW

A pandemic of this scale has not occurred for decades. How will the supply chain networks respond? The pandemic, resultant lockdowns and COVID-19-specific requirements have already revealed clear weak points in the global COVID-19 supply chain.

Procurement and supply chain management play a key role in the distribution of vaccines. These are by no means the only challenges standing in the way of supplying the global population with vaccines as quickly as possible. But procurement and supply chain management solutions are critical to this effort.

Uncertainties in all areas best describes the various players’ current and future state in the supply chain. To be best prepared for all imaginable and probable scenarios, enterprises need to set the right course now and develop concrete recommendations for action. This will not solve all problems, but implementing these measures will make a significant contribution toward getting the pandemic under control. That should be the primary goal for all of us.

References

1. “Coronavirus — What Will the Impact Be?” Pharma Intelligence, 14 December 2020. Retrieved 15 December 2020 from https://pharmaintelligence.informa.com/resources/key-topics/coronavirus
2. Carl Zimmer, Jonathan Corum and Sui-Lee Wee, “Coronavirus Vaccine Tracker, The New York Times, 14 December 2020. Retrieved 15 December 2020 from https://www.nytimes.com/interactive/2020/science/coronavirus-vaccine-tracker.html
3. Daniel Bukszpan, “The Challenges Pfizer Faces Distributing Its Covid-19 Vaccine to the Masses,” CNBC.com, 25 November 2020. Retrieved 6 December 2020 from https://www.cnbc.com/2020/11/25/challenges-pfizer-faces-distributing-covid-19-vaccine-to-the-masses-.html
4. “Analysis: How Close Is Germany to Receiving a COVID-19 Vaccine?” The Local, 10 November 2020. Retrieved 8 December 2020 from https://www.thelocal.de/20201110/how-close-is-germany-to-receiving-a-covid-19-vaccine-analysis
5. “Why Moderna and Pfizer Results Could Be Good News for India,” The Times of India, 18 November 2020. Retrieved 8 December 2020 from https://timesofindia.indiatimes.com/india/why-moderna-and-pfizer-results-could-be-good-news-for-india/articleshow/79276137.cms
6. “Delivering Pandemic Resilience,” DHL, September 2020. Retrieved 8 December 2020 from https://www.dhl.com/global-en/home/insights-and-innovation/thought-leadership/white-papers/delivering-pandemic-resilience.html
7. Ibid
8. “Pfizer and BioNTech to Potentially Supply the EU With 200 Million Doses of Mrna-Based Vaccine Candidate Against SARS-Cov-2,” Pfizer, 9 September 2020. Retrieved 8 December 2020 from https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-potentially-supply-eu-200-million-doses
9. Dan Stanton, “Four Production Plants, One Billion Doses by End of 2021,” BioProcess International, 15 April 2020. Retrieved 9 December 2020 from https://bioprocessintl.com/bioprocess-insider/global-markets/jjs-covid-19-vaccine-four-production-plants-one-billion-doses-by-end-of-2021/
10. Ben Ames, “Pharma Supply Chains Start Planning for COVID-19 Vaccine Surge,” DC Velocity, 10 September 2020. Retrieved 8 December 2020 from https://www.dcvelocity.com/articles/47128-pharma-supply-chains-start-planning-for-covid-19-vaccine-surge
11. Mark Terry, “Operation Warp Speed Selects McKesson for COVID-19 Vaccine Distribution,” Biospace, August 17,2020 https://www.biospace.com/article/operation-warp-speed-selects-mckesson-for-covid-19-vaccine-distribution/