Pharmaceutical supply chains are facing unprecedented strain as geopolitical disruption, manufacturing weaknesses, cyber threats and counterfeit medicines combine to create a new era of risk, according to a new report from Moody’s.
The report warns that these threats are no longer isolated events. Instead, they are increasingly interconnected – yet so many organisations continue to manage supply chain, cyber and operational risks separately, reducing their ability to anticipate and respond to disruption.
Geopolitics Puts Pressure on Global Medicine Flows
Trade disruption and geopolitical instability are creating delays, increasing costs and exposing vulnerabilities across pharmaceutical sourcing networks.
The Red Sea crisis has sharply reduced traffic throughout the Suez Canal, forcing companies to reroute shipments and extend delivery timelines. Continued instability in the Middle East is also adding pressure to critical pharmaceutical inputs, including active pharmaceutical ingredients (APIs) sourced from major manufacturing hubs.
India remains a key supplier of generic medicine and pharmaceutical ingredients globally, meaning disruption in the region could have widespread consequences for markets reliant on affordable medicines.
Potential US tariffs on imported medicines could further increase costs, with estimates suggesting the impact could reach tens of billions of dollars annually.
Manufacturing Remains a Fragile Link
Pharmaceutical manufacturing networks have limited capacity to absorb disruption, with many sterile injectable facilities already operating at high utilisation. Establishing alternative production sites can take months due to regulatory approvals, validation and quality requirements.
The collapse of Akorn Pharmaceuticals in 2023 highlighted the risks of concentrated supply chains, when its product portfolio vanished and competitors were unable to immediately replace lost supply.
Cyberattacks and Counterfeit Risks Grow
Cybersecurity is creating another major vulnerability. The Change Healthcare ransomware attack showed how a single digital disruption can affect thousands of pharmacies and interrupt access to medicines. Growing reliance on AI, cloud systems and third-party technology providers is also creating new concerns around data integrity and operational resilience.
Counterfeit medicines are further threatening supply security, with complex global supply chains and expanding online markets making falsified products harder to detect.
Moody’s warns that companies must adopt a more connected approach to resilience, improving visibility across suppliers, manufacturing sites and distribution networks as shortages become driven by multiple overlapping risks.
Featured Image: Val Traveller on Adobe Stock
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