Dave Splett , VP of Business Development at Injectech, LLC07.02.21
As a component supplier based in the USA, we have seen an enormous increase in requests regarding a shortage of plastic components used in the bioprocess and medical device industries. This can be attributed to the following three factors. In preparation for this white paper, numerous hours were invested in researching public information as well as studies with industry leading medical device, bioprocess companies and resin suppliers.
The three main factors contributing to this current market disruption are:
1. Operation Warp Speed
On May 15, 2020, President Trump announced Operation Warp Speed. The goal of this program was to speed the delivery of vaccines, therapeutics and diagnostics for Covid-19. The goal was to have 300 million doses available by January 2021. As of March, 2021, approximately 80% of the 300 million dose goal has been achieved.
According to www.TheHill.com: “The most innovative feature of OWS was government purchases of large quantities of vaccine types undergoing clinical trials, irrespective of the outcome (such as $2 billion and $483 million in early purchases from Pfizer and Moderna, respectively).
"OWS called for clinical trials, manufacturing, and logistics to be conducted on a parallel rather than a sequential basis. The pursuit of multiple vaccine types built redundancy into the program to insure as many approved vaccine types as possible. (Currently, 251 vaccines are in the process of development).”
As of April, 2021, the United States has 26% of our population fully vaccinated and 40% of the population have had the first dose. For the global community, Israel is leading with approximately 60% of their country having at least one vaccination followed by The United Kingdom and Chile (which joins the United States) at over 40%.
2. Unexpected Force Majeure
Component manufacturers worldwide that supply medical device OEM’s and bioprocess customers have had to manage several force majeure scenarios with a limited supply of resins due to chemical shortages, temporary plant closures, hurricanes and cold weather in addition to the pandemic. This resulted in an immediate shortage of nylon, polycarbonate, ABS, POM, Polypropylene, EVA, and Polyethylene. There is forward movement with resin suppliers in overcoming the force majeure, however, they are also increasing prices. If current forecasts are correct, the force majeure should ease up by the end of the year.
3. Covid and Elective Surgeries
Additionally, there was a decrease in elective surgeries that were offset by an immediate increase in ventilator and vaccine components. As of January 2021, elective surgeries are increasing which is good news for the general public. However, this sudden increase in demand can be taxing on component manufacturers unless clear communication and forecasts have been discussed with their customers.
So what does this mean to you? When will you be able to get components again?
The answer will most likely be in hindsight depending on your component supplier. The Warp Speed operation will continue for the unforeseeable future. A referenced above, no country is over the 50% mark for the first vaccination shot as of April 2021 with the exception of Israel. The United States has also pledged $100 million in supplies for the current Covid outbreak in India. The component suppliers that are mandated by the US government to support the strict Operation Warp Speed guidelines have no choice as the government will certainly demand their continued support in combating Covid as well as receiving a return on their early investment. These companies are doing a public service that is certainly needed and should be applauded! However, there is mounting frustration as other OEM’s that manufacture non-Covid products are now learning about extended lead times or even order cancellations.
Although we were not immune to the pandemic, Injectech’s management team conducted a multi-year risk analysis in the early stages of the pandemic. Over the last year, we doubled the size of our Class 8 clean room, procured additional molding machines and invested in numerous mold bases. We understood that the pandemic would be a hindrance for several years; yet made these investments to position our company for our customer’s demands – whenever they would materialize.
Dave Splett is vice president of Business Development at Injectech, LLC, a global supplier of medical device and bioprocess components.
The three main factors contributing to this current market disruption are:
1. Operation Warp Speed
On May 15, 2020, President Trump announced Operation Warp Speed. The goal of this program was to speed the delivery of vaccines, therapeutics and diagnostics for Covid-19. The goal was to have 300 million doses available by January 2021. As of March, 2021, approximately 80% of the 300 million dose goal has been achieved.
According to www.TheHill.com: “The most innovative feature of OWS was government purchases of large quantities of vaccine types undergoing clinical trials, irrespective of the outcome (such as $2 billion and $483 million in early purchases from Pfizer and Moderna, respectively).
"OWS called for clinical trials, manufacturing, and logistics to be conducted on a parallel rather than a sequential basis. The pursuit of multiple vaccine types built redundancy into the program to insure as many approved vaccine types as possible. (Currently, 251 vaccines are in the process of development).”
As of April, 2021, the United States has 26% of our population fully vaccinated and 40% of the population have had the first dose. For the global community, Israel is leading with approximately 60% of their country having at least one vaccination followed by The United Kingdom and Chile (which joins the United States) at over 40%.
2. Unexpected Force Majeure
Component manufacturers worldwide that supply medical device OEM’s and bioprocess customers have had to manage several force majeure scenarios with a limited supply of resins due to chemical shortages, temporary plant closures, hurricanes and cold weather in addition to the pandemic. This resulted in an immediate shortage of nylon, polycarbonate, ABS, POM, Polypropylene, EVA, and Polyethylene. There is forward movement with resin suppliers in overcoming the force majeure, however, they are also increasing prices. If current forecasts are correct, the force majeure should ease up by the end of the year.
3. Covid and Elective Surgeries
Additionally, there was a decrease in elective surgeries that were offset by an immediate increase in ventilator and vaccine components. As of January 2021, elective surgeries are increasing which is good news for the general public. However, this sudden increase in demand can be taxing on component manufacturers unless clear communication and forecasts have been discussed with their customers.
So what does this mean to you? When will you be able to get components again?
The answer will most likely be in hindsight depending on your component supplier. The Warp Speed operation will continue for the unforeseeable future. A referenced above, no country is over the 50% mark for the first vaccination shot as of April 2021 with the exception of Israel. The United States has also pledged $100 million in supplies for the current Covid outbreak in India. The component suppliers that are mandated by the US government to support the strict Operation Warp Speed guidelines have no choice as the government will certainly demand their continued support in combating Covid as well as receiving a return on their early investment. These companies are doing a public service that is certainly needed and should be applauded! However, there is mounting frustration as other OEM’s that manufacture non-Covid products are now learning about extended lead times or even order cancellations.
Although we were not immune to the pandemic, Injectech’s management team conducted a multi-year risk analysis in the early stages of the pandemic. Over the last year, we doubled the size of our Class 8 clean room, procured additional molding machines and invested in numerous mold bases. We understood that the pandemic would be a hindrance for several years; yet made these investments to position our company for our customer’s demands – whenever they would materialize.
Dave Splett is vice president of Business Development at Injectech, LLC, a global supplier of medical device and bioprocess components.
