The pros and cons of reshoring to address the problems of shortages in global pharmaceutical value chains: the case of antibiotics

PurposeAntibiotics shortages have become an increasingly common problem in Europe because of several reasons, including the offshoring of the production of active pharmaceutical ingredients for many of these products to low production cost countries, such as China and India. The problem has deteriorated because of the Covid-19 crisis that has put most global value chains (GVCs) under great stress. This situation has boosted extensive discussions among academics, practitioners and policymakers on possible changes to the configuration of GVCs. This paper aims to focus specifically on antibiotics supply chains from the perspective of a small country (Sweden), and analyse the pros and cons of backshoring and nearshoring alternatives, as a means to reduce drug shortages. Design/methodology/approachThis work adopts a systemic perspective to capture the implications of reshoring for the different stakeholders involved in the antibiotics field. The present meso-analysis, focusing at the industry level, is based on multiple sources of primary data collected between 2014 and 2021, including participation in policy-related projects and interviews with over 100 representatives of key stakeholders in the antibiotics field. FindingsThis paper shows how reshoring can address the problems of drug shortages and reduce availability risk in antibiotics' GVCs. However, the authors show that no simple and best solution exists because both alternatives of reshoring, i.e. backshoring and nearshoring, entail pros and cons for different stakeholders. The authors conclude with implications for policymakers and managers. Research limitations/implicationsThe analysis of pros and cons of both backshoring and nearshoring for various stakeholders offers relevant implications for research on operations and supply management, international business and economics/political science. Originality/valueThis paper looks at reshoring as a policy-driven decision and provides an innovative systemic perspective to analyse the implications for different stakeholders of two reshoring options concerning the antibiotics supply chain.

Automated summary

Antibiotics shortages in Europe have become more common due to the offshoring of production to countries with lower costs, such as China and India. The Covid-19 crisis has further exacerbated this problem, leading to discussions on potential changes to global value chains. This paper focuses on the antibiotics supply chain in Sweden and analyzes the advantages and disadvantages of backshoring and nearshoring alternatives.