Advancing a Circular Economy for Climate-friendly Health Supply Chains
March 27th, 2023 | viewpoint
Fortunately, resilience and reducing climate consequences can go hand in hand.” — Edward Wilson, Director of Health Logistics at JSI and the Partnership for Supply Chain Management (PFSCM), a JSI affiliate.
There’s no doubt that climate change is accelerating the need to redesign the global health supply chain. Key improvements, such as developing additional manufacturing and distribution resources from inception to delivery, and in collaboration with government and business leaders, can ease disruption to life-saving health product and medicine delivery when it is needed most.
The brutal shock to global supply chains experienced during the COVID-19 pandemic demonstrated the need for alternative solutions and a fundamental shift in inventory philosophy from “just in time” to “just in case.” Focused conversation and commitment are required to reconcile these competing forces. I elaborate on this in a recent article written by Devex correspondent Andrew Green.
As global health supply chain professionals, we envision a health supply chain with greater resilience from top to bottom: from diversified development of active pharmaceutical ingredients to product manufacturing, procurement, and delivery.
Overall, we know that health care is responsible for 4–4.5% of global net emissions. The supply chain, from production to consumption to final disposal, accounts for 71% of them.
Fortunately, efforts to increase resilience and reduce climate consequences can go hand-in- hand; strategies for the former can lessen the latter. Throughout, we will need to shift from linear operating models of consumption to circular economy models that reduce waste, extend product life cycles, and regenerate nature through product design and limited use of finite resources. This will entail a long-term commitment among suppliers, funders, procurers, and communities.
With over 20 years experience delivering health products and strengthening supply chains at all levels, we are urging governments and implementing partners to consider the following recommendations to advance the resilience and circularity agenda.
Expand active ingredient production capabilities.
This is upstream from where we get involved, but we have an indirect role through our sourcing and procurement activities. “De-concentrating” the production of active pharmaceutical ingredients is a long-term challenge for pharmaceutical companies. To expand this activity beyond China and India, the private sector will need a business case for investment for 5–10 years. Ideally, this involves a coalition of governments, private organizations, and multilateral funders that ensures access to materials at the origin of production and technology to produce the ingredients, and enough of a geographic spread of sources so that a major climate, health, or political catastrophe will not derail production.
Partner with manufacturers.
How can we incentivize manufacturers to move production of health products intended for sub-Saharan Africa — where climate crises and pandemics can cause severe supply chain disruptions — closer to demand? By establishing predictable demand; improving availability of skilled labor; creating a favorable regulatory and policy environment; and providing infrastructure such as transportation, electrical networks, and wastewater systems.
Implement a place- and people-centered delivery system.
Here is where resilience and climate-friendly strategies have an ethical and humane imperative: that no one goes without medicine. These strategies include multi-month dispensing of antiretroviral medicines; using pharmacies or community locations in places like Kenya, Madagascar, and Uganda to reduce patient travel time and cost; and bundling deliveries from multiple suppliers and chartering flights into countries to reduce overall CO2 emissions.
Build circular economy practices throughout the supply chain.
This will require collaboration among manufacturers, regulators, procurers, supply chain operators, health care providers, and consumers to identify waste throughout the supply chain; leveraging opportunities for reduction, such as elimination of excess packaging and single-use plastics; and creating opportunities for reuse, life-cycle extension, and repurposing.
Resilience strategies are tested during a humanitarian crisis created by climate change and other upheavals. In these instances, organizations prioritize getting people shelter, food, and medical aid quickly under extremely adverse conditions. Incorporating climate considerations in humanitarian response requires planning and effective operational oversight. This includes:
- Developing a humanitarian response playbook that leverages local assets as much as possible, including local pharmaceutical distributors, their suppliers, and delivery companies.
- Limiting donations and deliveries during a crisis to those that are needed and wanted to avoid having to store and dispose inappropriate and unwanted goods later.
- Working closely with local organizations to shift to a more normal supply system that implements best practices for inventory management, forecasting, ordering, and sourcing as quickly as possible.
We can and must harness our experience and collective desire to stabilize the climate. We have the foundation for action today, but must accelerate efforts to achieve greater resilience and reduce climate damage.
By Edward Wilson
