The cost of active pharmaceutical ingredients (APIs) across the globe has risen. A number of factors have contributed to higher costs. Supply disruptions due to temporary factory closures and increases in demand for certain APIs and intermediates to support urgent drug production projects have led to supply insecurity around the world. Furthermore, cost increases and limited availability of key starting materials and critical reagents impact the entire supply chain. Often there are fewer qualified suppliers of these key inputs, than there are of API manufacturers.
Higher API prices have implications for the availability of finished drugs, with the potential for product shortages if companies cannot secure their supply of the materials needed to make them. In countries where drugs are price controlled, companies may have to absorb manufacturing cost increases, impacting their profit margins.
It is important for pharmaceutical companies to take steps to secure the supply of vital APIs and intermediates and maintain consistent manufacturing costs and ability to serve their patients with needed medicines. But how can they achieve this?