Pharmaceutical companies shift to near-shore medicines sourcing

With global supply chains under stress due to the COVID-19 pandemic, European pharmaceutical companies and distributors are increasingly looking for alternative supply channels inside the EU block.

According to the data from the Pipelinepharma B2B pharmaceutical marketplace, the number of requests for commercial proposals from European distributors when drug manufacturers are also based in Europe has increased by 69% in 2021, compared to the previous year.

“These Europe-to-Europe deals indicate distributor interest to shorten the supply chain or at least to identify alternative sourcing options in case of delivery shortages. Increasing logistical costs and supply chain uncertainties also make localized sourcing more cost-effective”, - noted CEO of Pipelinepharma Mindaugas Zagorskis.

According to a note by the European Commission, shortages for medical products in the EU have increased 20-fold between 2000 and 2018. The document does not take into account the new challenges posed by the global pandemic.

On the European market, 40% of finished medicines come from China or India. 80% of active pharmaceutical ingredients are also produced overseas.

Pipelinepharma hosts the largest European B2B pharmaceutical marketplace for finished dosage formulations. The platform provides access to more than 9 900 EU CTD dossiers, listing products from more than 600 EU GMP manufacturers. Approximately 56% of the platform buyers are based in Europe, with an increasing majority of licensing deals occurring inside the European Union block.

In November 2020, the European Commission adopted the Pharmaceutical Strategy for Europe, calling for access to affordable medicines, increasing innovation in the pharmaceutical industry, strengthening the defense strategy against future pandemics and making the EU a leader in public health.

There are also increasing calls to strengthen European pharmaceutical manufacturing, with an additional effort for increasing the market presence of generic and biosimilar medicines.

“The supply chain risks and drug shortages are not unique to European customers. FDA also lists more than 100 medications that are in short supply. The current situation calls for supply network risk mitigation, such as diversifying supply sources and taking geographic as well as geopolitical risks into account”, - added Mindaugas Zagorskis.