Packaging, supply & logistics
as Ford and General Electric all rushing to support, the US pumped out an estimated one billion N95 masks in 2021 alone. Yet, as the immediate emergency of the pandemic has slipped into history, the supply chain challenges facing medical device manufacturing haven’t disappeared. The causes here are multifaceted, with transportation, labour, geopolitics and even weather all acting as contributing factors. The sector itself is assuredly feeling the strain, with 26% of respondents in a recent survey predicting that sourcing medical equipment will become harder in future. The same poll, conducted by Supplyframe, also found that a third believe domestic device manufacturing will need to increase.
It goes without saying, meanwhile, that the consequences here are far from rhetorical. As the pandemic terrifyingly revealed, a lack of medical devices can quickly have health consequences in the real-world – a fact that’s still apparent now. Even something as simple as saline solution for IV drips continues to be rationed across American hospitals, while a lack of semiconductors is sparking shortages everywhere from ventilators to pacemakers. All the same, as the success of the DPA vividly implies, there’s plenty that the powers-that- be can do to bolster the situation. Strengthening public-private partnerships; stimulating domestic investment; partnering with foreign allies. These are but three of the options available to policy makers – and are encouraged by industry bodies – even while the growing threat of rivals like China makes decisive action more urgent than ever.
The chips are down
Few people are as well-placed as Scott Whitaker to reflect on the supply chain problems stalking medical device development. As the president and CEO at AdvaMed, an organisation representing 80% of US medical device firms, and the biggest such association on earth, he’d had plenty of opportunities to understand just how challenging the manufacturing climate is currently. As Whitaker emphasises, recent years have seen the sector “strained” in a number of key areas. Semiconductor chips are probably the most famous example here, but Whitaker emphasises that resins and medical-grade packaging have proved increasingly hard to find as well.
If the impact of shortages is multifaceted, the causes are too. The chaos of the pandemic hasn’t helped – a situation exacerbated by the relatively small size of the medical manufacturing industry. Think about it like this: in a world where 70% of semiconductor market growth is dominated by just three sectors (automotive, data storage and wireless), it can be hard for medical manufacturers
Medical Device Developments /
www.nsmedicaldevices.com
to get a look in. Beyond these overarching issues, moreover, disruption comes in many forms. One, argues Abby Pratt, senior vice-president at AdvaMed, involves transport. “There were a lot of delays in the delivery and transport [of] cargo,” she says, adding that severe weather events and labour stresses have hardly improved things. Fair enough: floods near Beijing are ravaging supply chains as we speak, while skilled manufacturing technicians are typically demanding $2–3 more per hour than they did pre-pandemic. Combine this with ballooning geopolitical tensions – the war in Ukraine and looming conflict in the Pacific, which among other things has led the US to slap trade sanctions on Chinese chips – and no wonder Whitaker is so concerned. “First and foremost,” he says, “the major consequence of these supply chain issues is the potential disruption in the delivery of patient care. If medtech companies are unable to manufacture and deliver these life-saving devices to hospitals and clinics, patients will lose access to the care they need.” Given the scale of the quandary, though, it’s equally unsurprising that the authorities should have stepped in. On President Biden’s side of the Atlantic, probably the most significant example is the so-called CHIPS Act. Earmarking $280bn for domestic semiconductor research and manufacturing, the bill also provides 25% tax credits for relevant equipment. Not to be outdone, the Europeans started down a parallel path, passing a $47bn package modelled on the CHIPS Act. Although not the only motivation for these legislative instruments, one of the reasons cited for the creation of both was to ensure a reliable source of semiconductors for medical devices.
In good supply
AdvaMed, for its part, has been actively involved in the discussion around policies like this that aim to strengthen medical supply chains. A case in point is a new white paper, advancing six ‘priority areas’ to help build resilience into American medical device manufacturing. The suggestions here are varied; one idea involves formalising a ‘green lane’ at airports and ports, ensuring that equipment can enter the country quickly; another centres on diversifying supply chains, doubtless wise when US regulations helped shutter almost 10,000 Chinese chip manufacturers in 2021–22 alone. Yet if each of these proposals makes sense in isolation, Pratt does see a unifying theme: fomenting cooperation between the public and private sectors. “Companies have learned a great deal, and have enhanced their internal processes and procedures,” she says. “But our job as a trade
123
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136 |
Page 137 |
Page 138 |
Page 139 |
Page 140 |
Page 141 |
Page 142 |
Page 143 |
Page 144 |
Page 145 |
Page 146
