A Year in Review: 2020 API Supply Chain Trends and 2021 Predictions

Author: Andy Anderson, APIs & Intermediates Lead

Jan 2021

It has been extremely gratifying for everyone here in Kalamazoo, Michigan to have been in pharma’s corner in 2020, helping the industry from behind the scenes, manufacturing and delivering supplies of critical treatments. I am extremely proud to be a part of Pfizer CentreOne’s central role helping meet spiking demand and ensuring medicines reached patients through our partnerships and secure supply chain.

For example, early treatment studies showed that Dexamethasone was effective in managing the respiratory distress of the most severely affected COVID-19 patients. In response, orders from our global manufacturing partners for new supplies of the steroid in active pharmaceutical ingredient (API) form climbed to unprecedented levels. Over the past year Pfizer CentreOne’s Kalamazoo steroid center of excellence experienced an 100% increase in demand for our Dexamethasone API.

Looking back on 2020, I think the entire industry can be proud of what was accomplished.  With demand for all pharmaceuticals growing and a need to keep the supply chain secure, several trends are likely to gain momentum in 2021.

Time to secure supply chains 

The pandemic identified unsustainable imbalances in the global distribution of API manufacturing capacity. With so much capacity centered in one region, disruptions of any kind can have serious consequences. This is prompting investment in new capacity in North America and Europe, continuous improvement in existing facilities and a more regional, local approach to API sourcing.

Although  traditional sources of API manufacturing will likely remain dominant, in the interest of security and reliability, drug developers are looking to diversify their supply chains.  

Moving into 2021, companies will continue to scrutinize their API supply chains and take an even harder look at how much risk they are willing to take on their key brands.  

Hope on the horizon 

The distribution and use of multiple COVID-19 vaccines bring a lot of new hope into 2021, but they are not an instant ‘cure all’. Until everyone is vaccinated, there will still be plenty of patients requiring treatment, especially when associated comorbidities exacerbate their acute COVID-19 symptoms.  

Medicines used for the treatment of COVID-19 both in outpatient and clinical settings will still be in high demand, particularly early on in the year and the pharma industry must respond accordingly. 

Deeper partnerships to de-risk supply chains

Looking ahead it is likely that drug developers will be seeking a second and possibly even a third supplier to source critical APIs.

Deeper partnerships will be required between drug developers and API suppliers to de-risk supply chains. Traditionally, API supply and procurement has been very transactional, but that connection is changing - on both sides. Now, API supply relationships are becoming more partnership based, requiring greater collaboration to ensure critical medicines reach patients even in extraordinary times.

Providing strength through experience 

Although the crystal ball for what’s ahead is clearing, there will still be plenty of uncertainty in 2021. 

Preparing our customers for uncertainty is what Pfizer CentreOne does best, and we’ve been doing it for more than 50 years in Kalamazoo. We will remain focused on ensuring we have adequate API inventories for our current and future customers, as well as readying and adapting our processes for potential changes in market demand. 

Whether we are a primary or secondary API supplier, we are here to de-risk our customers’ supply chains. In 2021, you can count on Pfizer CentreOne to be in your corner. Providing a safe, secure supply chain. Because unpredictable supply is not an option for essential medicines. 

Find out more about securing your API supply today with Pfizer CentreOne, as well commercial pricing and supply availability using our API Finder https://www.pfizercentreone.com/api-finder.

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