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From governments to corporates, the importance of a diversified supply chain has been a big lesson of the pandemic. At the start, the global supply chain was tested as governments around the world urgently tried to buy personal protective equipment (PPE), test kits and other medical devices. With various countries limiting exports of products from drugs to PPE, the tension between national priorities and globalised free markets has become abundantly clear.

For governments, ways to manage health security more closely and bring production of life science products closer to home will be a big question as the dust settles on this pandemic. For life science companies, a focus on local supply and diversification are two key themes in corporate risk mitigation efforts, after experiencing first-hand the risks posed to their supply chains by government interventions, lockdowns and competition for resources.

 

With attention shifting to vaccines, the downstream supply chain is now where some of the most significant risks reside. With some vaccines needing to be stored at very cold temperatures, the pressure is on within the supply chain. If temperatures, among other parameters such as vibration and humidity, are not properly maintained when drugs are transported, it can lead to batches being thrown away.

 

Read the “Lessons from the Supply Chain” report to get an insight into how sourcing challenges during the pandemic is changing attitudes to risk in the supply chain, and ultimately changing the shape of the supply chain itself.

Key takeaways

  • Tensions over vaccine supply timelines emphasize the importance of drafting clear contracts.
  • Claims arise when pharma products fall outside of set parameters, such as temperature limits, during transit.
  • If a shipment’s value includes research and development (R&D) costs, liability can become contentious.
  • From governments to corporates, diversification of suppliers and near-shoring are being discussed.

Lessons from the Supply Chain

 

Read more reports in the ‘Life Science in the era of pandemics’ series:

Life Science in the era of pandemics
Emerging Risks in COVID-19 Clinical Trials
Making Medical Devices During a Pandemic
Fighting COVID-19 with genomics
The Great Telehealth Experiment

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No part of this article may be reproduced in any written, electronic, recording, or printed form without written permission of Chubb.

Disclaimer - The contents of this report are for illustrative purposes only and not intended to be an offer or solicitation of insurance products. You should read the policy documents to determine whether any of the insurance products discussed are right for you or your business, noting different limits, exclusions, terms and conditions apply in each country or territory, and not all cover is available in all countries or territories. This document should not be relied on for legal advice or policy coverage and cannot be viewed as a substitute to obtaining proper legal or other professional advice, or for reading the policy documents.

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Grace Fung
Head of Industry Practices
Technology, Life Science, Clean Energy & Entertainment
Grace.fung@chubb.com