How to ensure resilience in biologics value chains

Ensuring the availability of biologics—a category of health products that encompasses therapies, vaccines, diagnostics, and gene therapy—is becoming a global health priority, as health systems improve, countries continue to grapple with the effects of Covid, and demand for these products soars across regions. In addition to its central role in healthcare delivery overall, biologics like vaccines, is a critically important tool during pandemics and other crises.

Forthcoming analysis from Merck Life Science seeks to answer this question. The report suggests strategies for resilience, identifying five key areas for action by companies and governments:

• regionalization,
• new risk management strategies,
• reducing risk in investments,
• action by regulators, and
• enabling policies for biomanufacturing and R&D.

Regionalization: Companies and governments can focus on regional geographic diversity to help with risk mitigation and allow producers to respond more effectively to regional needs. For example, a hub model, with demand and manufacturing capacity, lined up to serve the needs of a particular region, and operating within an ecosystem with the right incentives, enabling policies, and regulatory framework seems promising. Regionalization can help offset risks associated with natural disasters, counterproductive national policies, and other challenges. Stakeholders can develop additional capacity at an appropriate pace and scale across countries and regions, rooted in a clear business case and, ideally, accompanied by government support and incentives. Collaboration between local producers and multinational technology transfer partners is an essential part of the equation.

Reducing risk in risking investments: A key role for governments will be to reduce risk in investments and actions that can boost health security, but where private actors are unlikely to step forward due to the lack of a business case. For example, government support is important to the success of rapid, large-scale clinical trials for a pandemic vaccine and building extra manufacturing capacity. Government intervention in these areas was crucial to accelerating the Covid response. To build the foundation for biologics delivery in the future, governments can provide incentives to invest in surge capacity at existing facilities; cover the cost of stocking finished or intermediate products; and co-finance the construction of new facilities or the expansion or upgrading of existing ones. They can contract manufacturing capacity in advance, for use in the event of a crisis. They can also create pull mechanisms like advance purchase commitments, which is one incentive that was successfully deployed during the pandemic.

Enabling policies for biomanufacturing and R&D: Innovators do not bring novel health technologies to society in a void. Their activities are necessarily influenced and shaped by the policy environments for conducting R&D, manufacturing, and commercialization activities. Governments are crucial partners for innovators, investing in education, instituting enabling policies for innovation and growth—such as IP and trade policies—and pursuing a vision and strategy for universal healthcare delivery. It is the responsibility of governments to provide leadership and coordination, including building the appropriate health infrastructure and funding mechanisms for crisis response and healthcare delivery for the long term.

The Merck Life Science analysis is intended to spark new conversations where practical experiences and insights of companies can help inform the healthcare and health security programs of governments and international health organizations. 

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