European heatwave and drought highlight need for resilient medicine supply chains

Sarah Taylor of Pinsent Masons was commenting as businesses in central Europe grapple with issues associated with an extended period of very hot weather and drought conditions. This, she said, is impacting on manufacturing processes and the transportation of both raw materials and finished products, adding to supply chain challenges arising from the conflict in the Middle East.

According to Taylor, the effects of the recent heatwaves and lack of rainfall in parts of Europe show how the integrity of medicines supply chains can be tested by extreme weather events.

Reports earlier this month highlighted how water levels in the River Rhine had fallen to record lows in Germany and the Netherlands owing to the extended period of hot, dry weather, with some businesses that rely on the river to transport raw materials and finished goods forced to pivot to alternative logistics arrangements.

The issue has been particularly acute at certain chokepoints on the river, such as at Kaub, which sits between two cities that the river also flows through – Mainz to the west and Koblenz to the north.

Analysis conducted by the Kiel Institute for the World Economy, published in 2023, highlighted how river levels measured via a gauge at Kaub serve as a benchmark for whether goods and materials can be transported via the Rhine in that region of Germany and set out the economic effects where low water levels are recorded. Using historical data on water levels, the analysts calculated that where water level measured at the Kaub gauging station sits lower than 78 centimetres for 30 days, industrial production in Germany declines by about 1%.

The water level measured at the Kaub gauging station fell to just seven centimetres on Monday 17 August, according to official data. The water level measured at Kaub on Thursday 20 August had risen from Monday’s low to 36cm. According to the University of Warwick, the water levels at Kaub last reached 78cm on the gauge on 22 July.

While the readings on the Kaub gauge do not reflect the actual depth of the Rhine at the point – the river is around one metre deeper – it helps to determine whether the river is navigable by ships and the weight of the cargo those ships can carry. Some commentators have highlighted the correlation between the river level and the weight of cargo that can be shipped – with lower water levels meaning less cargo able to be transported.

Taylor said pharmaceutical supply chains rely on the River Rhine for transporting raw materials and active pharmaceutical ingredients from North Sea ports, such as Rotterdam, to major manufacturing hubs in Germany and Switzerland. With lower water levels impacting on the capacity that can be transported via the river, businesses have been forced to move goods via road or rail networks, slowing down the supply of raw materials and intermediates needed to manufacture pharmaceuticals and adding to their costs for shipping finished products.

Pharmaceutical companies operate so-called ‘cold chains’ – temperature-controlled supply chains – to ensure that products that need to be stored at cool temperatures or which are of short shelf-like, such as insulin, vaccines, some oncology drugs and GLP-1 medicines such as Ozempic and Wegovy, do not degrade before they can be used. Taylor said periods of intensely hot weather, and/or delays transporting goods that might result from low river levels, pose a risk to cold chains.

“Elevated temperatures put pressure on refrigeration systems, including in warehouses and refrigerated lorries, which risk mechanical failure due to working past design limits,” Taylor said. “Further, electricity supplies to such units may be disrupted due to electricity blackouts caused by increased demand for air conditioning in hot weather. This all means that there is a risk of temperature sensitive medicines such as insulin being rendered ineffective or unsafe, potentially undermining patient confidence in the safety of their medicines, and, on a purely commercial level, can result in significant losses.”

A report by Pharmatica published in June cited the US Food and Drug Administration as estimating that the pharmaceutical industry loses around $35 billion each year owing to cold chain failures.

Cold chain failures can carry regulatory consequences for pharmaceutical companies too, with Pharmatica highlighting how medicines manufacturers are commonly subject to a licensing condition requiring that their products are stored in rooms where the temperature does not exceed 25°C.

“The heatwave and drought conditions in Europe this summer have disrupted pharmaceutical supply chains, bringing climate change resilience planning to the forefront of medicines manufacturers’ minds,” Taylor said.

To address the impact of broader climate change-induced disruption, pharmaceutical companies are strengthening the resilience of their supply chains by introducing advanced thermal packaging, engaging in real time temperature monitoring to enable them to respond to unexpected changes, and securing backup generators and secondary power protocols – to guard against the risk that primary systems fail during extreme weather events and cause products to degrade, Taylor said, describing backup plans as “critical to the infrastructure of the continuous supply of medicine”.

“Following the disruption to supplies caused by the Middle East conflict, this is another example of the need for pharmaceutical companies to review and, if necessary, update the steps they are taking to future-proof their manufacturing and distribution networks – to ensure medicines reach those in need, comply with their regulatory obligations, and protect their commercial interests,” Taylor said.