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Preparing for the Unexpected: The Value of Business Continuity Planning

The global pharmaceutical industry is navigating an era marked by escalating pricing pressures and increasing regulatory scrutiny.¹ The COVID-19 pandemic served as a wake-up call for pharmaceutical companies to address vulnerabilities within end-to-end operations; however, the ongoing struggle to stabilize supply chains continues to lead to significant challenges, including:

Decreased patient access
Product fulfillment delays
Increased supplier and R&D costs
Strain on supplier and contract manufacturer relationships

The past five years have underscored the urgent need for pharmaceutical companies to embrace innovative, forward-thinking strategies. This article will explore the pressing challenges facing the industry today, such as regulatory shifts, supply chain vulnerabilities and missed commercial opportunities, and how a comprehensive business continuity plan (“BCP”) can serve as a critical safeguard for future resilience.

Current Industry Challenges and BCP Solutions

Challenge 1: Regulatory Developments
COVID-19’s impact on supply chain operations led to temporarily accelerated approval pathways which may no longer be available as we transition back to standard regulatory practices.² High product demand, an influx of new submissions and increased time-to-market complications directly impacted the regulatory components of vaccine roll-out.³ In response to these disruptions, mitigation measures taken by regulatory bodies such as the FDA and the European Medicines Agency (“EMA”) included accelerated approvals, remote inspections and emergency use authorizations (“EUAs”).

Though these workarounds allowed regulatory bodies to ensure compliance despite the pandemic complications, they are subject to change. As the world works towards recovering from the pandemic, it is important to plan proactively to counteract future disruptions and not rely solely on these short-term mitigation measures.

Challenge 2: Supply Chain Disruptions
Supply chain disruptions pose a significant threat to the pharmaceutical industry, particularly for companies dependent on single-source manufacturers for critical active pharmaceutical ingredients (“APIs”). One pharmaceutical company producing a life-saving drug faced government investigations due to a global supply shortage, with allegations of market manipulation through stockpiling raw materials. Fortunately, measures were in place that allowed continuous operations with clear documentations of ongoing practices. Leveraging existing business continuity plans, the company was able to navigate this situation and review its operations to determine allocation of API and reason for purchase. If operations had ceased or records were unavailable for a period of time, it would have hindered the pharmaceutical company’s response to the subpoena. The investigation concluded with the determination of no malicious intent.

Implementing robust business continuity plans equips pharmaceutical companies with the strategies needed to mitigate supply chain disruptions, ensuring sustained access to essential medicines and maintaining compliance even in times of crisis.

Challenge 3: Loss of Commercial Opportunity
Unforeseen circumstances, such as sudden outbreaks or regulatory shifts, can arise at any moment, posing significant risks to businesses and potentially causing them to miss critical commercial opportunities in the market. Recently, a monkeypox outbreak in Central and Eastern Africa was declared a public health emergency, highlighting the urgent need for increased international aid to control the rising cases. An international biotechnology company holds the only FDA- and EMA-approved vaccine for the disease, presenting a significant opportunity to leverage its unique position in the market.⁴ However, the company faced challenges due to insufficient production capacity and lack of a robust distribution network to meet the demand for 10 million doses across the affected African nations.⁵ Had a business continuity plan been in place that outlined contracts and strategies to scale up production and distribution in the event of an epidemic, the company could have maximized the financial benefits of being the sole vaccine provider during the crisis.

What Is a Business Continuity Plan?

The overarching theme of the challenges outlined above is the true unpredictability of the pharmaceutical industry. A business continuity plan provides companies with a systematic protocol to adhere to during times of crisis. The aim is to enable critical operations to continue unaffected by negative and unexpected circumstances. A robust BCP should facilitate prompt and efficient problem resolution.

It is essential that pharmaceutical companies have structured and comprehensive BCPs to ensure the ongoing supply of lifesaving drug products to patients. A BCP should have the following five stages:

Risk Assessment: Identification of potential risks and their likelihood
Operational Impact Assessment: Analysis of the impact of the identified risks on critical business operations
Response Plan Development: Planning of strategies to prevent critical business operations from being affected by the identified risk
Governance Plan: Application of a clear process and ownership for updating and executing the BCP based on performance measurements and fluctuating environmental variables
Implementation of Response Plans: Tactical execution plan around communication, training and testing of the business continuity plan amongst team members

Leveraging a BCP for Everyday Business Resilience

Most commonly, a BCP is thought of in the context of emergency responses and disaster recovery. For example, BCPs can describe a process to safely shut down a manufacturing plant in the case of an earthquake, or restoring data after a computer malfunction. However, there are strategic uses for a BCP, outside of disaster recovery, that can improve operations and provide actionable steps for continuous processes. This can include steps to maintain inventory of critical components or ensure continuous product distribution and reliable chain management. Key strategic impacts of implementing a BCP include:

Regulatory Compliance: Business continuity ensures that regulatory requirements will be upheld during emergency events to ensure product quality
Supply Chain Resilience: BCPs identify vulnerabilities and prepare companies against shortages of raw materials, manufacturers and distribution sources
Patient Safety: A consistent availability of medications through emergencies contributes to patients’ health and well-being
Reputation & Trust: Maintenance of operations and supply builds trust in a company for its customers, third parties and investors. Also, a strong continuity plan will instill overall community trust and positive public perception
Liquidity Maintenance: A natural outcome of continuous operations is that a steady stream of revenue will be maintained throughout crises, therefore protecting financial stability

Prepare, Execute, Excel

The goal of business continuity is not to predict all possible disruptions and worst-case scenarios; rather, the goal is to analyze impacted areas and determine how to ready your team to maintain operations during an external crisis. It is not productive or feasible to try to avoid a power outage, for instance, but it is effective to ensure you have strategic inventory placement and distribution. BCP is a matter of purpose-driven preparation that can be applicable to a variety of disruptions, so your company is always prepared regardless of the situation.

Footnotes:

1: Buzzeo, William MS, and Michelle Gyzen, “Transforming Regulatory Strategy to Meet the Evolving Compliance Landscape.” Regulatory Focus (January 29, 2021).

2: Novack, Gary D, “Expedited Regulatory Approval in the Time of COVID-19.” National Library of Medicine (May 28, 2022).

3: Jean-Louis Excler, Mealine Saville, Lois Privor-Dumm, Sarah Gilbert, Peter J. Hotez, Didi Thompson, Salim Abdool-Karim, and Jerome H. Kim, “Factors, Enablers, and Challenges for COVID-19 Vaccine Development.” National Library of Medicine. (June 5, 2023).

4: Aizenman, Nurith, “Is There Enough Monkeypox Vaccine to Go Around? Maybe Yes, More Likely No.” NPR (August 16, 2022).

5: Searchinger, Chloe, and Allison Krugman, “Mpox Vaccine Tracker: Millions Pledged, Millions Still to Be Delivered.” Think Global Health (November 26, 2024).