On 27 August, the European Medicines Agency reported a shortage of long-acting injectable medicines containing paliperidone palmitate in several European Union countries. These medicines are used for the maintenance treatment of schizophrenia in adults who have been stabilised with paliperidone or risperidone.
The list of companies affected is extensive: Advanz Pharma, Adamed Pharma, Alter, Belupo, Biogaran, EGIS Pharmaceuticals, Elpen, G.L. Pharma and Innovis Pharma. These are products marketed by different marketing authorisation holders and distributed across different markets. Yet the cause identified by EMA converges on a single point in the supply chain: manufacturing issues at Pharmathen International.
The Agency specifies that the shortage is not related to a product quality defect or a safety issue and, at the time of the communication, does not indicate when it is expected to end. It also warns that the disruption could affect the availability of other medicines containing the same active substance in additional countries.
The case itself is limited in scope. The industrial issue it brings to light is far less so.
The diversification we do not see
When we look at the pharmaceutical market from its endpoint, we see different brands, marketing authorisation holders, packaging, distributors and markets. But as we move upstream along the manufacturing chain, that apparent plurality can narrow very quickly.
Several medicines may rely on the same contract manufacturer, depend on the same site for a critical production step, or share specialised suppliers that are difficult to replace. A supply chain that appears diversified downstream may therefore be far more concentrated upstream.
This is not, in itself, an anomaly. Contract manufacturing is a structural component of the contemporary pharmaceutical industry, allowing companies to access capacity, technologies and specialised expertise without having to replicate them internally. For some processes, concentrating production among highly specialised operators may even be the most rational industrial solution.
The problem arises when that concentration creates a dependency for which no realistic alternative can be activated within the timeframe required by the market.
This is where the nature of the risk changes. A production line shutdown or difficulties at a single site no longer affect only one company’s product. If several medicines depend on the same node, a local disruption can propagate across supply chains that are formally separate.
The single point of failure may be shared
In industrial risk management, the concept of a single point of failure is well established: an element whose unavailability is sufficient to compromise the functioning of the entire system. In the pharmaceutical sector, however, it is often assessed from the perspective of the individual company and the individual product.
The picture changes when the same critical point is shared by multiple marketing authorisation holders.
A contract manufacturer may be just one supplier for each client company, while at the same time becoming a significant node for an entire category of products. Overall vulnerability therefore cannot be understood simply as the sum of the risk assessments carried out separately by individual operators. It is also a question of visibility.
Each marketing authorisation holder may know its own supply chain, assess its own risk and put continuity measures in place. But concentration becomes fully apparent only when the information is viewed at an aggregate level: how many medicines depend on that site? How much of the available capacity is concentrated in the same manufacturer? Are there technically equivalent alternatives? And, above all, how long would it take to make them operational?
Having a Second Supplier does not mean being able to use it tomorrow
In discussions about supply chain resilience, dual sourcing is often presented as an almost obvious response to dependence on a single manufacturer. In the pharmaceutical industry, however, a second source is not simply an alternative name on a supplier list.
Changing manufacturing site or manufacturer may require technology transfer, available production capacity, qualification of equipment and processes, manufacture of validation batches, analytical testing, comparability assessments, documentation updates and, depending on the nature of the change, regulatory procedures.
For complex or sterile products, or for those involving highly specialised processes, timelines and technical challenges may increase even further. There is therefore a substantial difference between having identified an alternative and having an alternative that is ready to manufacture.
Available capacity also matters. Even a second manufacturer that has already been qualified may not have sufficient free capacity to rapidly absorb volumes transferred from another site. Resilience therefore depends not only on the number of suppliers, but also on the capacity that is actually accessible, the time required to activate it and the maturity of the industrial transfer process.
Manufacturing capacity becomes part of Risk Management
This brings us to an often underestimated issue: capacity.
In a highly specialised supply chain, knowing that another manufacturer is technically capable of producing the medicine is not enough. What matters is whether that manufacturer has usable capacity, how quickly it can be made available and under what conditions.
Capacity reservation, continuity agreements, campaign planning and the ability to reallocate volumes therefore become business continuity tools. They naturally come at a cost. Maintaining redundant capacity or a second source ready for use is less efficient, at least in the short term, than concentrating production. It is precisely this tension between efficiency and resilience that makes the issue so difficult.
A supply chain designed to maximise plant utilisation, economies of scale and specialisation can perform extremely well under normal conditions. But a highly efficient network may have little room to absorb an unexpected disruption. From a purely economic perspective, redundancy may look like unused capacity. From the perspective of continuity of treatment, however, it may have an entirely different value.
Shortage Prevention Plans change the question
The case comes at a particularly significant time. In August, EMA published an updated version of the guidance and template for Shortage Prevention Plans (SPPs), developed in preparation for the new obligations introduced by the reform of EU pharmaceutical legislation.
The stated objective is to identify vulnerabilities in supply chains and ensure that appropriate measures are in place to prevent, mitigate or manage risks that could lead to a shortage. Marketing authorisation holders will need to be ready to apply the new requirements by the regulatory deadline expected from mid-2027.
The logic behind SPPs shifts attention from managing a shortage once it has occurred to understanding in advance the conditions that could cause it.
This is an important step because it requires more concrete questions to be asked. Where are the critical nodes in the supply chain? Are there single-source suppliers? How long would it take to activate an alternative? What stocks are available? Which manufacturing steps are the most difficult to transfer? To what extent does the product depend on capacity that cannot be replaced quickly?
But the paliperidone case raises an additional question: how visible is a vulnerability shared by several companies?
A risk may appear manageable within the supply chain of a single MAH, yet take on a very different scale when the same node is found to support multiple products and markets at the same time.
From supplier mapping to dependency mapping
Pharmaceutical resilience therefore requires more than an up-to-date supplier list. It requires a map of dependencies.
Knowing who manufactures a product is only the first level. It is also necessary to understand which activities are carried out at each site, which steps are difficult to transfer, which suppliers are shared, what alternative capacity is actually available and how long it would take to access it.
From this perspective, the relationship between MAHs and CDMOs also changes. Contractor management cannot be limited to GMP compliance, audits and operational performance. Available capacity, planned investments, site continuity, management of subcontractors and the ability to support sudden increases in volume all become relevant factors.
Supply chain knowledge needs to extend deep enough to identify dependencies that may become critical.
The case reported by EMA does not demonstrate that the contract manufacturing model is inherently fragile, nor that manufacturing concentration should be avoided. It does, however, show particularly clearly how misleading it can be to measure resilience simply by counting companies, products or suppliers.
Downstream, there may be many medicines. Upstream, sometimes, the road narrows back to one.
References:
EMA – Paliperidone palmitate supply shortage
