All Eyes on the Middleman

The race to produce a vaccine for COVID-19 is coming to a close finish as drugmakers await FDA approval for their vaccines and distributors await massive shipments to issue across the globe. McKesson is a “global leader in healthcare supply chain management solutions” and is currently under contract with the United States government for $568 billion to produce supply kits with needles, syringes, and personal protective equipment for business related to the COVID-19 pandemic (LaVito, 2020). Traditionally, McKesson partners with healthcare organizations to match their products and services to the right customers in a timely, safe, and cost effective manner  (McKesson, 2020). The healthcare company was also chosen as the central distributor by the Centers for Disease Control (CDC) to supply the government’s Operation Warp Speed (OWS), which is an accelerated vaccine process designed by the government this year. This unprecedented task at slating the completion timeline for the vaccine process to 14 months as opposed to the typical 73 months will come at a great challenge (Figure 1, defense.gov). We are at a critical point in the process with Phase III clinical trials in the rearview.  With the spotlight on McKesson, we will look to them for updates on the vaccine distribution process in the coming weeks, but for now, let us dive into what that might look like. 

Figure 1

Innovation and nimbleness will determine how McKesson plays this process out. The supply chain for vaccines has historically been a very careful process, but the first question we must ask is what the supply chain is and what it looks like for vaccines? To define supply chains, they are intricate networks where humans and machines work in sync to move products from production to their final destinations ( McKesson, 2020). If not for this process, people would be out of reach from essential food, medicine, and healthcare. It wasn’t until this pandemic that we realized the true value of these processes. McKesson has continuously put forward their networks and 30 U.S. distribution centers to work around the clock to pick, pack, and ship millions of pharmaceutical supplies across the country. They deliver around 40,000 packages of medicine each day, which is ⅓ of America’s total pharmaceutical volume. These deliveries are handled with some of the best automated equipment that has produced 99.98% order accuracy (McKesson, 2020). Warehouse automation has been a central point to companies across all sectors with COVID-19. McKesson’s National Redistribution Facility (NRDC) in Olive Branch, Mississippi was built in 2011 in place of a warehouse that managed products manually. According to McKeson, automation in the new facility has helped handle five times more volume than the old facility. Nimbleness in supply chain management has become a focal point for the supply chain management firm. While NRDC unloads 40 to 60 trucks per day, McKesson must keep their own workers safe in order to keep their facilities in shape to distribute products in timely, safe, and cost efficient ways. In other words, supply chain nimbleness translates directly into speed and resilience with their non-negotiable demand for keeping all parties safe while continuing to do business efficiently (McKesson, 2020). 

As the largest seasonal flu vaccine distributor in the U.S., McKesson will take on the responsibility of distributing the COVID-19 vaccine in line with Operation Warp Speed. McKesson will be the centralized distributor of future COVID-19 vaccines that are refrigerated (2-8℃) or frozen (-20℃), but not ultra frozen vaccines (-70℃ and colder) according to their contract with the CDC (McKesson, 2020). Pfizer, Astrazeneca, and Moderna are the frontrunners for becoming the first drugmaker to gain approval for public distribution of their vaccines. Astrazeneca, although the least likely to be approved first because of safety issues, can reportedly be transported at 2-8℃ (Blankenship, 2020). The top two candidates, Moderna and Pfizer, can be held and transported at 2-8℃ and -70℃, respectively (Morris, 2020). Given this, McKesson would be able to distribute both Astrazeneca and Moderna’s products since their storage temperatures are within refrigerated and frozen ranges. 

What does this mean for McKesson? Upon FDA approval, McKesson will have received medical supplies and have created supply kits to have at it’s 30 distribution centers. Once the vaccines arrive in bulk from the FDA approved vaccine company, McKesson will receive them and pick the vaccine doses. Immediately after, they will fill the supply kits and organize the CDC’s order of how many doses to supply and where to ship them to. Once packaged, the delivery process takes off and sends the supply kits to point-of-care facilities to administer vaccines to a given population (McKesson, 2020). 

Operation Warp Speed advisor, Moncef Slaoui, publicly stated recently that Americans could start receiving a COVID-19 vaccine by December 12th, according to Christianna Silver of NPR (2020). The plan is to begin rolling out vaccine distribution within 24 hours of FDA approval, so Slaoui anticipates that to happen in a matter of weeks. Come that time, McKesson will be on center stage, distributing the first approved vaccine that could potentially put this pandemic to an end, so millions of approved vaccine doses will need to comply with their proven successful nimbleness. Rolling out a COVID-19 vaccine will need to be safe and timely, so looking out for that first FDA approval will make for a massive step forward in this fight to contain COVID-19. 

For more information on the vaccination process followed by CDC guidelines, please visit: https://www.cdc.gov/coronavirus/2019-ncov/vaccines/faq.html. 

Sources

Blankenship, K. (2020, November 23). AstraZeneca hopes warmer storage needs for COVID-19 vaccine will be an advantage against mRNA competitors. https://www.fiercepharma.com/manufacturing/astrazeneca-hopes-warmer-storage-needs-for-covid-19-vaccine-will-be-advantage-against

Coronavirus: Operation Warp Speed. (n.d.). https://www.defense.gov/Explore/Spotlight/Coronavirus/Operation-Warp-Speed/

How McKesson became a supply chain leader in the industry. (n.d.). Retrieved November 28, 2020, from https://www.mckesson.com/Our-Stories/Art-and-Science-of-Supply-Chain/

LaVito, A. (2020, November 3). McKesson to Get Earnings Boost from Covid-19 Vaccine Rollout. Bloomberg. https://www.bloomberg.com/news/articles/2020-11-03/mckesson-to-get-earnings-boost-from-covid-19-vaccine-rollout?sref=KkPzpZvz

McKesson to distribute future COVID-19 vaccines in support of Operation Warp Speed. McKesson. 

https://www.mckesson.com/About-McKesson/COVID-19/Vaccine-Support/

Morris, D. (2020, November 29). Pfizer's COVID vaccine comes with a chilly complication. But that may change. 

https://fortune.com/2020/11/28/pfizer-covid-vaccine-cold-storage-update/

Silva, C. (2020, November 22). Americans Could See A Vaccine By Mid-December, Says Operation Warp Speed Adviser. https://www.npr.org/sections/coronavirus-live-updates/2020/11/22/937780366/americans-could-see-a-vaccine-by-mid-december-says-operation-warp-speed-adviser

(2020, August 14). McKesson to Distribute Future COVID-19 Vaccines in Support of Operation Warp Speed. McKesson. https://www.mckesson.com/About-McKesson/Newsroom/Press-Releases/2020/McKesson-Distribute-Future-COVID-19-Vaccines-Operation-Warp-Speed/

Edited by Jaret Prothro