Tag: Sardella

In the United States, no manufacturing source exists for more than 80% of the active ingredients in medicines the US Food and Drug Administration deems essential for public health, according to a new study from the Center for Analytics and Business Insights (CABI) at Olin Business School.

“This creates an incredible vulnerability to our public health care system, our health care security,” said Anthony Sardella, an adjunct professor at Olin and senior research advisor at CABI. He conducted the study using proprietary data from across the industry.

Anthony Sardella

Essential medicines include antibiotics, antivirals, blood pressure pills, steroids and many others.

“We have a national security issue related to being able to maintain our public health,” Sardella said, because the US is so reliant on foreign production of active pharmaceutical ingredients (APIs).

“The US Active Pharmaceutical Infrastructure: The Current State and Considerations to Increase US Healthcare Security” focuses on generic medications, which represent more than 80% of US prescriptions.

‘A fragile system’

APIs are the necessary components of medicines that provide patients with the drug therapy they need. The compounds are made into dosages of tablets, solutions and creams.

A June 2021 White House report on supply chain resiliency referenced an epidemic of national drug shortages occurring even before COVID and the pandemic, but “COVID really drew attention to the fragility of our pharmaceutical supply chain,” Sardella said.

The crisis highlighted US reliance on long, complex supply chains and drug shortages in the US. “We really have a fragile system.”

The first of its kind, the study relied on industrywide data from Clarivate, a data and benchmarking company in the healthcare industry that has developed a dataset—Cortellis Generics Intelligence—that provides insights across the sector.

“The data is staggering, as is the implication to our health security,” Sardella said.

Sources of COVID-19, Antivirals, Antibiotics and Top 100 Medicines in the United States. Cortellis Generics Intelligence, formerly known as Newport. Copyright Clarivate 2021

A ‘race to the bottom’

His analysis shows the following:

  • The majority of large-scale manufacturing sites of APIs are in India and China, while less than 5% of such sites are in the US. (In COVID times, both China and India have threatened to cut off or restrict shipments to the US.)
  • Of 52 COVID-related medicines, 75% had no US source of API.
  • Of the top 100 generic medicines consumed in the US, 83% had no US source of API.
  • Of the 47 most-prescribed antivirals, 97% had no US source of API.
  • Of the 111 most-prescribed antibiotics, 92% have no US source of API.

One cause for our weakness in API manufacturing is the “race to the bottom” on pricing against global players, Sardella said. Foreign manufacturers have structural advantages including greater government subsidies, lower costs and fewer regulatory burdens.

He said solutions to protect US healthcare security must address the risk by creating a critical mass of domestic manufacturing infrastructure to protect domestic interests; a level playing field for global competition; and sustainable domestic markets for American manufacturers.

“Tony’s outstanding research shows the impact of being both values-based and data-driven,” said Michael Wall, professor of practice in marketing and entrepreneurship and CABI’s co-director. “This principle is core to Olin and to CABI.”

The new study follows a previous one aimed at understanding the business, societal and governmental environment of the pharmaceutical supply chain. Sardella and Paolo De Bona, a consultant and formerly a staff scientist at WashU’s School of Medicine, conducted an extensive review of academic research, media reports and public policy statements to discern the causes of chronic pharmaceutical shortages in the United States and develop policy solutions to address them.

The work has gained the attention of policymakers in Washington, DC, and compelled the pair to join with the Brookings Institution in hosting a public forum on the subject

About the Center for Analytics and Business Insights: CABI serves as a  conduit between business, academia and the broader community, helping leaders better leverage analytics and technology to make a positive and principled difference in organizations, communities and society at large.

Anthony Sardella is the recipient of the 2016 William C. and Glenda L. Finnie Adjunct Faculty Fund Award. Sardella is an adjunct lecturer in the areas of corporate strategy, innovation, growth, and marketing.

“This award recognizes exceptional adjunct faculty whose enthusiasm, teaching, and business experience combine to inspire and energize our students,” said Olin’s dean Mahendra Gupta, the Geraldine J. and Robert L. Virgil professor of accounting and management.

The award was created in 2009 by Bill Finnie and his wife Glenda who provided a generous endowment gift to recognize Olin’s adjunct professors. “We are grateful to Bill and Glenda for their continuing enthusiasm and support,” said Gupta in making the announcement.

Sardella is a recognized leader in the field of managing businesses to overcome reputation management challenges. He is a frequent speaker and consultant to corporations facing reputation issues and wanting to develop a marketing program, reputation management strategy, or strategic communications plan within a high concern, low trust environment. In addition, he has authored and co-authored over 25 papers in the field of human health risk assessment prepared on behalf of government, and non-governmental scientific bodies.

Sardella earned a BS degree from the University of Toronto and an MBA from Northwestern University Kellogg School of Management

Bill Finnie has taught strategic consulting, business strategy and marketing strategy to second-year MBA students since 1978.

Finnie received his BS in applied math and computer science in 1966 from Washington University and his PhD in 1970 from the University of Pennsylvania. He had a long and distinguished career with Anheuser-Busch from 1965 to 1991 and is currently a business strategy consultant, author and columnist. Glenda Finnie has pursued a career teaching mathematics. She received her BA in math in 1966 from Washington University and her MS in 1971 from the University of Pennsylvania.