The COVID-19 pandemic has battered supply chains across industries. 94% of Fortune 1000 companies have seen a disruption. For pharmaceutical supply chains, while the most dire predictions made earlier in 2020 concerning disruption have not come to pass, we predict the risk of disruption will increase from its current level as 2021 progresses. Paradoxically, the cause of the increased supply chain distribution disruption risk will not be COVID-19 itself, but the distribution of vaccines for COVID-19.


The distribution of COVID-19 vaccine will stress the pharmaceutical supply chain through which many lifesaving medicines flow. Most at risk of disruption is the delivery of drugs dependent on cold chain, as the COVID-19 vaccines will need to be kept cold. Looking at U.S. pharmaceutical cold chain air cargo gives an illustration of the challenge. Pre-pandemic throughput was about one million pallets per year, according to Pharmaceutical Commerce. They report that shipping the COVID-19 vaccine by air would represent up to half a million pallets over a year’s time, i.e., needing 50% more capacity.


With this in mind and other possible constraints, such as port entries, now is the time for pharmaceutical manufacturers to assess and mitigate any potential distribution impact. They should do so not only for their cold chain network, but their overall supply chain too. As a starting point, we recommend the following proactive steps:

  1. Analyze the exposure in the current distribution strategies to the shipment of COVID-19 vaccines. Some pharmaceutical manufacturers are going to be more exposed because of factors such as geography, distributor relationships, product shelf life, etc. Manufacturers should discuss with their distributors and third-party logistics providers to better understand the level of exposure and contingency plans that are in place. Special attention should be given to the impact of current and potential government policy relating to vaccine distribution at both the federal and state levels. Lastly, manufacturers already have some experience managing disruptions due to COVID-19. Data around shipment delays, consumption shifts, etc., should all be analyzed to find patterns.
  2. After understanding the potential exposure, pharmaceutical manufacturers should start updating the assumptions in their supply planning process. Some of the key business questions may be where the new potential bottlenecks are, where to increase safety stock, and which steps need a secondary or even tertiary backup plan. From a process perspective, teams must decide what, if any, changes they should make, including how to increase end-to-end visibility, which indicators are most important, and what the triggers will be for contingency plans.
  3. Manufacturers need to recognize that the situation is continuously evolving. Vaccine throughput is predicted to start relatively small, with manufacturing capacity growing throughout 2021. Thus, while at the beginning, the chance of negative externalities may be low, it will increase as more vaccine doses become available. This is further complicated by having multiple types of vaccine, each starting their distribution journey from different parts of the world, needing different storage and transportation conditions.

As the year ends, we can all look forward to the vaccination campaign starting in earnest. However, focus and flexibility are still required to ensure that immunization occurs with minimal disruption to the delivery of other life-saving drugs. Manufacturers should use the coming weeks to understand their exposure, plan accordingly, and monitor and continuously refine their supply chain and distribution plans.