Diversifying Supply Chains: New Opportunities Post Pandemic and After Brexit: Northern Ireland offers many favorable factors medical device manufacturers may want to consider.

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Author: Kevin Holland
Date: Jan-Feb 2021
From: Medical Product Outsourcing(Vol. 19, Issue 1)
Publisher: Rodman Publishing
Document Type: Article
Length: 2,859 words
Lexile Measure: 1510L

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The re-evaluation of our global supply chains has been long overdue.

Back in 2011, the FDA published Reliance on Foreign Sourcing in the Healthcare and Public Sector, a report that highlighted many of the underlying risks lurking within the medical device and pharmaceutical industries. They discovered that for over 43 percent of critical components, materials, and finished products intended for incorporation into medical devices and surgical equipment, no alternate source of those materials--in or outside the United States--was available. The report also found that while the most common medical manufacturing components were provided by suppliers in 32 different companies, the top single-source locations were all located in Asia.

Cut to 2021; it's now 10 years later, and over the last several months, the medical manufacturing industry has had to rapidly respond to a global health crisis that has upended not just life sciences and healthcare, but every other industry as well.

On the one hand, it has been impressive to witness the sector's heroic response to this once-in-a-lifetime challenge. Companies have quickly adapted, developing new technologies and producing supply to meet new or increased demand. From Northern Ireland, I've watched our highly flexible medtech sector quickly pivot to develop COVID-19 related PPE, medical equipment, testing, and diagnostics.

On the other hand, it didn't take long for COVID-19 to shine a spotlight on long-known, inherent supply chain weaknesses. In March 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act provided the FDA--for the first time--with "new authority to help prevent or mitigate negative public health impacts of medical device supply chain disruptions."

Given the findings of the previously mentioned 2011 report alongside what the FDA classifies as "unprecedented increased demand for some medical devices, as well as significant disruptions to global medical device manufacturing and supply chain operations," it's clear that effective global supply chains in this sector are more critical than ever.

From discussions with global manufacturers, it is evident that a profound and lasting change to how medical devices and pharmaceuticals are sourced and distributed is already underway. These companies are actively investigating how near-shoring and dual-source pipelines can protect the on-time manufacturing and distribution of critical devices and supplies.

This shift to diversified sourcing is poised to happen much quicker for medical product manufacturing than it will for pharma. The FDA found nearly half of medical devices/surgical equipment sourcing contracts are only maintained for three years or less. Flexibility is key due to ever-changing innovations and upgrades to medical products. By contrast, pharmaceutical companies operate with a higher level of regulation and the composition of medicines do not change, so supplier contracts are typically maintained for a much longer time.

So in the complex calculus of identifying alternative source locations outside the U.S., what are the top considerations? The FDA identified six factors in its research: cost, compliance (with regulatory requirements), product quality, product availability, IP protection, and market access.

It is in this context Northern Ireland presents several unique value propositions to U.S. medical product companies...

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Gale Document Number: GALE|A652003861