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SUPPLY CHAIN

2. U.S. Food and Drug Administration. FDA Drug Shortages
Database. Available at: https://www.accessdata.fda.gov/
scripts/drugshortages/default.cfm. Accessed October
28, 2020.
3. U.S. Food and Drug Administration. Report on Drug
Shortages for Calendar Year 2019. April 23, 2020:1213. Available at: https://www.fda.gov/media/139613/
download. Accessed November 4, 2020.
4. U.S. Food and Drug Administration. Drug Shortages
Infographic. Reasons for Drug Shortages. Accessed
November 4, 2020 https://www.fda.gov/drugs/drugshortages/drug-shortages-infographic
5. IQVIA institute For Human Data Science. Medicine
Spending and Affordability in the United States. August
2020. Available at: https://www.iqvia.com/insights/
the-iqvia-institute/reports/medicine-spending-andaffordability-in-the-us. Accessed November 5, 2020.
6. Ari Altstedter. Bloomberg QuickTake: Where the U.S.
Actually Gets Its Drug Supply: QuickTake Q&A. January
17, 2017. Accessed November 4, 2020. https://www.
bloomberg.com/news/articles/2017-01-17/where-the-us-actually-gets-its-drug-supply-quicktake-q-a

A Question of Identity
At the heart of this conversation about supply
chains is a much more existential question:
What is it that the United States wants to be
known for? As the United States has shifted
over the years from being a manufacturing
powerhouse with an abundance of brickand-mortar facilities to focusing more on
innovation through digital advancements
and intellectual property, any approach to
readjusting supply chains must also shift.
In a global economy where individual
companies and countries can decide to
focus on invention, design and intellectual
property, or manufacturing and logistics, or
any combination of these, the real question
is not how do we as a country consolidate
and control this whole process, but how do
we connect the pieces so that operations
can be smarter and deliver higher-quality
products at competitive prices? Part of the
answer is that companies should make
measured, strategic outsourcing decisions
and continued investment in technology
and infrastructure.
Companies should evaluate which changes
will add the most value, especially in the
context of diversifying supply chains away
from China and ensuring international
supply chains are not overly concentrated
in any one country or region, including the
United States. A domestic crisis can just as
easily lead to supply chain disruptions, as

evidenced by the paper products shortage
during the early months of the pandemic.
Approximately " 90% of all toilet paper
purchased in the United States is made in
America, " according to the nonprofit group
Alliance for American Manufacturing,12 but
that didn't prevent widespread shortages of
the product in March and April. It still comes
down to companies operating as lean as
possible to control costs and meet demand
just in time. Greg Guest, a spokesperson
for Georgia-Pacific - which makes toilet
paper, paper towels and more - said in a
March article on the Alliance for American
Manufacturing's website: " We are basically
a North American manufacturing company,
so it is not any kind of issue like a supply
chain disruption from Asia. We primarily
manufacture all of our products in the U.S. " 13
Rather than making wholesale changes
to life science supply chains, which would
likely increase costs, raise taxes, and focus
efforts away from innovation, it is likely
more beneficial for companies to leverage
technology and rethink the number,
proximity, and specific skills of their partners.
These more nuanced, strategic decisions can
allow companies to remain flexible, pivot
more quickly, and maintain resilience.

References
1. U.S. Food and Drug Administration. FDA Drug Shortages
Database. Available at: https://www.accessdata.fda.gov/
scripts/drugshortages/default.cfm. Accessed October
28, 2020.

pharmoutsourcing.com |

| October/November/December 2020

7. Adam Lohr and Steve Kemler. Life sciences industry
outlook, from RSM's The Real Economy: Industry
Outlook. 2020; Volume 5; 51. Available at: https://rsmus.
com/what-we-do/industries/life-sciences/industryoutlook-life-sciences.html. Accessed November 5, 2020.
8. IQVIA institute For Human Data Science. Medicine
Spending and Affordability in the United States. August
2020. Available at: https://www.iqvia.com/insights/
the-iqvia-institute/reports/medicine-spending-andaffordability-in-the-us. Accessed November 5, 2020.
9. U.S. Food and Drug Administration. Fact Sheet: FDA at
a Glance: Regulated Products Report. October 2019.
Available at: https://www.fda.gov/media/131874/
download. Accessed November 4, 2020.
10. Janet Woodcock, M.D., Director - Center for Drug
Evaluation and Research. Testimony before House
Committee on Energy and Commerce, Subcommittee
on Health; October 30, 2019. Accessed November 4,
2020. https://www.fda.gov/news-events/congressionaltestimony/safeguarding-pharmaceutical-supply-chainsglobal-economy-10302019.
11. Teva Pharmaceutical Industries Ltd. Q2 2020 earnings
call transcript. Available at: https://s24.q4cdn.
com/720828402/files/doc_financials/2020/q2/TEVA-IL20200805-2406680-C.pdf. Accessed November 5, 2020.
12. Alliance for American Manufacturing article,
America's toilet paper makers are working hard to
restock store shelves. Available at: https://www.
americanmanufacturing.org/blog/americas-toilet-papermakers-are-working-hard-to-restock-store-shelves/.
Accessed October 30, 2020.
13. Alliance for American Manufacturing article,
America's toilet paper makers are working hard to
restock store shelves. Available at: https://www.
americanmanufacturing.org/blog/americas-toilet-papermakers-are-working-hard-to-restock-store-shelves/.
Accessed October 30, 2020.

Adam Lohr is an audit partner and life science
senior analyst. In addition to providing assurance
services to his clients, he also sits on RSM's national
life science team and leads the San Diego office life
science practice. His senior analyst responsibilities
include advising the firm's life science care clients
and client servers as they work to navigate the
rapidly changing industry environment. Adam
regularly writes, presents and advises on capital
markets, digital transformation, policy and other
isues transforming life sciences.

https://www.accessdata.fda.gov/scripts/drugshortages/default.cfm https://www.fda.gov/media/139613/ https://www.fda.gov/drugs/drugshortages/drug-shortages-infographic https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-spending-andaffordability-in-the-us https://www. bloomberg.com/news/articles/2017-01-17/where-the-us-actually-gets-its-drug-supply-quicktake-q-a https://rsmus.com/what-we-do/industries/life-sciences/industry-outlook-life-sciences.html https://www.iqvia.com/insights/the-iqvia-institute/reports/medicine-spending-and-affordability-in-the-us https://www.fda.gov/media/131874/ https://www.fda.gov/news-events/congressionaltestimony/safeguarding-pharmaceutical-supply-chains-global-economy-10302019 https://s24.q4cdn.com/720828402/files/doc_financials/2020/q2/TEVA-IL-20200805-2406680-C.pdf https://www. americanmanufacturing.org/blog/americas-toilet-paper-makers-are-working-hard-to-restock-store-shelves/ https://www.americanmanufacturing.org/blog/americas-toilet-paper-makers-are-working-hard-to-restock-store-shelves/ https://www.accessdata.fda.gov/scripts/drugshortages/default.cfm. http://www.pharmoutsourcing.com

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