Pharma Companies during COVID times
As the novel Covid-19 virus started spreading across borders and countries in early 2020, many industries faced the wrath of nature due to disruptions in supply chains, transport as well as the shutdown of manufacturing and production activities due to COVID-induced lockdown and quarantines. The pharmaceutical industry would be one of the most affected as well the fastest to recover in their battle against Covid-19. There were quite a few challenges to overcome such as the supply of active pharmaceutical ingredients (APIs) for the manufacture of drugs, import/export restrictions, and most importantly the R&D that went into the development of a vaccine against Covid-19. It was a slow but gradually developing impulse reaction that was observed in the pharmaceutical sector. Major changes in business processes were made and better preparation in terms of crisis and people management, and a gradual revamp of manufacturing as well as R&D came about. Constant availability of medicines as well as continuous clinical trials for Covid-19 vaccines has taken shape despite the supply chain disruptions. The industry has now emerged as a very responsive one, undergoing major positive restructuring due to the pandemic.
How were Sales impacted?
In accordance with the changing trends in the majority of the industries, COVID-19 also largely disrupted the way sales functioned in the pharmaceutical industry. While previously the sales predominantly took place in person, the onset of the pandemic forced most of the communication to commence online. Healthcare providers now expect the sales meetings, at least partially, to continue virtually, even beyond the pandemic. However, with advancements in technology and virtual systems being extensively employed, sales representatives are struggling to stay relevant today. With sophisticated systems in place, equipped with the latest AI tools, the face of sales in the pharma industry is all set to undergo a massive makeover, the foundations of which have been led by the COVID-19 pandemic. Sales representatives now have to undergo specialized training to be well equipped with the new systems in place and to navigate the business in modern times effectively. They have to be well versed with the tools, lest they become irrelevant and are at the risk of being replaced by intricate systems that are better suited to cater to the market.
The Financial aspect
The pharmaceutical sector does not need to showcase its importance in the middle of a global pandemic, everyone knows they are a vital part of a global solution to the COVID pandemic. The industry is set to emerge almost unscathed from the Covid-19 pandemic this fiscal. The sector is well diversified, with exports and domestic formulations having an almost equal share. Although the domestic market growth is down to 6% from 10% in the last fiscal, the growth for the export market has increased to 12% against 10% in the previous fiscal, leading to an approximate overall growth of 9%. In recent times, Indian pharma companies like Dr. Reddy’s and Serum Institute have been roped in as partners for testing and manufacturing of the COVID vaccines being developed by global pharma companies like Pfizer and AstraZeneca. This has led to an increase in Foreign Direct Investment in the sector, which has increased to US$414 million in FY 20 compared to US$ 266 million in FY 19. The pharma industry has not been affected financially as much as other industries with the advent of the global pandemic, instead, it has proven to be an opportunity for the industry to grow.
Touching on Distribution. How did we move the drugs?
The distribution side of the pharmaceuticals industry was under severe stress during the initial stages of the pandemic related lockdowns. In the beginning, the entire distribution networks in India and China were severely affected due to the closing of manufacturing facilities and the lack of workforce. A major roadblock for pharmaceutical companies was the export restriction by countries. India restricted the export of 26 pharmaceutical ingredients to ensure adequate supply in the country. These ingredients contribute to around 10% of India’s total medicinal exports. Since medicine availability was one of the essential requirements to fight the pandemic, there was more attention towards pharmaceutical distribution. Within a few months after the lockdown, most of the large-scale pharma companies have been able to go back to being fully operational. But that is not the case for smaller firms which still needs more time to be back to normal. Certain companies didn’t face that much of an impact from Covid because they had up to six months of the stockpile and were able to distribute from these reserves efficiently.
Plant Operations and Production of drugs
As the pandemic continues, changes are being made to the production facilities to ensure adherence to protocols and maintain productivity. The adoption of IT to enable access to infrastructure and ensure smooth business functioning has been pivotal to overall survival.
Key factors to consider at manufacturing plants include :
- Contamination and workplace or warehouses
- The inadequate social distancing between employees
- Risk of infected vehicle movement in the plant
- Contamination risk from visitors and 3rd party contractors
- Lack of detailed segregation of duty and control
To sum it up
The COVID-19 global pandemic can be associated with numerous short- and long-term impacts on the pharmaceutical industry, which can be observed from both global and local perspectives. This article aims to identify the key bottlenecks in this recovery process while presenting a holistic view of the critical areas to focus on. Demand change, supply shortages, panic-buying, and stocking were a few of the immediate impacts of the pandemic that we noticed. Approval delays, moving towards self-sufficiency in the supply chain, industry growth slow-down and possible trend changes in consumption could be long-term impacts of COVID-19 on the health and pharmaceutical market. Although the pharmaceutical market has been relatively less affected due to the pandemic compared to other manufacturing industries classified as inessential, it does present scope for improvement in addressing potentially weak business frameworks. Efficiently identifying these chinks in the armor may guide policymakers in evidence-informed planning and decision-making to combat associated challenges. For proper planning to prevent long-term complications, short-term impacts should be identified and further be measured with appropriate data analysis. This identification may be more important in the context of developing countries with more scarce health-care resources.
