Effects of Geopolitical Strain on Global Pharmaceutical Supply Chain Design and Drug Shortages
arxiv(2023)
摘要
Emerging geopolitical risks have begun to threaten global supply chains,
including those that produce life-saving drugs. Export bans may prevent a
company from shipping products internationally, and it is unclear how these new
dynamics may affect company plans and persistent, worldwide drug shortages. To
address these questions, we present a global pharmaceutical supply chain design
model that considers the risk of export bans that are induced by capacity
disruptions and corresponding price increases. The model takes the company's
perspective as a decision-maker looking to locate plants and distribute drugs
globally. It is a two-stage stochastic program that includes uncertainty in
capacity, ability-to-export, and demand. The model is solved by integrating the
Sample Average Approximation and L-shaped methods. We present conditions
related to when demand will be met and a case study of a generic oncology drug.
We find that preparing for geopolitical strain may increase resilience and
costs as well as reduce shortages in the short term. At baseline, expected
global shortages are high (21
(3.1
income countries, respectively). Pricing policies may improve drug access
overall, back-shoring may improve access for the country of interest, and
bilateral alliances may not be effective at improving access.
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