Impact of Covid-19 on Pharmaceutical Industry

Impact of Covid-19 on Pharmaceutical Industry

Authored by Ameex Technologies on 06 Apr 2020

Corona Virus (Covid-19) has almost impacted every industry, causing steep inroads into the global economy. Pharma industry is no exception. In this blog let us understand the impact on the pharma industry.

1.Cost of Drugs and Raw materials

The impact Covid-19 has created in China and the lockdown in India, United States, and other countries, further increases the chances of shoot up in the cost of raw materials and drugs. 13% of the brand and generic manufacturers are based out of China and according to the FDA, as of 2018, 24% of medicines and 31% of medical ingredients were imported from India. 


  • The cost of Paracetamol in India has gone up to Indian Rupees 400-450 per kilogram from Rupees 250- 300 per kilogram 
  • The price of vitamins and penicillin have increased by 40- 50 % in India

If the current situation continues to prolong, the cost of essential drugs might increase in the US and other countries as well.

2.Supply Chain

Pharma supply chain is fragile, and the impact created by Covid-19 has brought it to limelight once again. 

There are two types of drugs 

1.Brand Name Drugs

These are products protected with a reliable supply chain and profitable to the manufacturers.


2.Generic Drugs

The profit for these types of drugs is very marginal and the supply chain is lean. The API plant for these are often overseas with India and China dominating the API market. The API may be manufactured in a single plant and each stage holds very little inventory. The problem at any stage can cause drug shortage with the average drug shortage lasting for 14 months and there are cases where it has lasted for 3 years even.
According to a recent survey, emergency care, anesthesia care, and pain management drugs are the drugs which mostly get affected due to shortage.

The current situation might cause a shortage and increase in demands of certain medications such as Hydroxychloroquine and Chloroquine, which are most talked about during these pandemic times.

It is believed that the shortage might not occur for now as companies have stocks at least for the next 5 months.

3.FDA Policies

The Covid impact, demand for drugs and the lockdown in various countries may force the FDA to allow relaxation in a few areas:

  • The review process of Generic medicine is lengthy, the demand and shortage created may also force minor changes
  • The Federal law requires the manufacturers to notify the FDA about shortages when the circumstance arises. The rules do not apply to medical devices as it is manufactured at multiple plants. The shortage of devices during the pandemic might force the FDA to rethink on regulations on devices
  • FDA might also rethink the number of inspections on the overseas manufacturing plants

Example-To maximize the number of respirators available, FDA and CDC recently announced that certain respirators regulated by CDC, but not by the FDA, can also be used.

4.Data & Analytics

Pharma industry has an enormous amount of data, which also brings in various challenges

  • Integrating siloed data and derive insights
  • Infrastructure to leverage the power of Big Data
  • Leveraging unstructured data
  • Advance insights from clinical trails
  • Data privacy
  • Social listening

The cost of drug development is skyrocketing, and the time taken for a drug to be launched is also high. The industry has been using data for years, but the challenge lies in leveraging its full potential. A large amount of clinical and molecular data available over the years can help in predictive analytics, which can be used to hasten the process of clinical trials and drug development.

Companies are leveraging data and analytics, but the current situation might want them to use data even more efficiently for clinical trials, forecasting, and marketing. Infrastructure for big data and social listening will also play a key role.

5.Real-World Data (RWD)

New drug development is estimated to cost $2.6 billion which is up from 1 billion in 2013. On top of the cost involved, the time taken for development& clinical trials, might bring in more focus towards RWD. 

Almost 95% of the companies are using RWD or will be using it by 2021. Data accessibility and security issues are a few of the challenges in using RWD, but it can be sorted out and will gain more popularity as companies and the regulatory bodies from here on might look to bring in innovative measures in clinical trials. 

Clinical trials are gold dust for pharma but there are cases in the past where the drugs were pulled out from the market even after FDA approval. The main problem with clinical trial is it looks at a homogeneous population. To address this, FDA might relax the regulations on RWD.

6.Digital Health

Digital health might be the next big thing as telemedicine / video consultations, health-related videos and apps are gaining popularity.

Investment in online portals that help doctor-patient interaction will increase. 

Example of gaining digital popularity

  • Wellmind health (provides online courses for mindfulness-based cognitive therapy) has seen a recent uptrend in the purchase and enquires
  • Due to the current pandemic situation, hospitals in the UK have been instructed by NHS England to increase telemedicine/video consultations
  • Meditation apps Calm and Headspace have released free digital offerings to help people cope up with panic and anxiety

7.Primary and Secondary Market

To control the drug shortages that occur often companies will reassess their strategies on the primary and secondary market for manufacturing.

To Know more about Ameex, Contact us