After a global shortage of contrast agents for CT imaging left medical providers scrambling last year, North American pharmaceutical provider Voyageur Pharmaceuticals is now planning to use barium and iodine sources in Canada and the U.S. to power its own vertical integration efforts.
Decreasing dependence on overseas sources
The novel approach will be the first time that a contrast supplier has embraced full vertical integration, largely in an effort to decrease dependence on foreign or distant sources.
“There are critical shortages of iodine contrast with supply issues out of China and the European Union,” Voyageur CEO Brent Willis said in a news item about Voyageur’s new direction, noting that the recent contrast agent shortages have led to price instability.
Although the recent supply disruptions were largely blamed on COVID shutdowns, other risks on the horizon mean that independently sourcing barium and iodine will continue to offer key business advantages even as pandemic-related disruptions wane.
“This has become the most important factor in our plan due to the destabilization of the global markets with lockdowns, war, and the West’s move to decouple from China,” Willis said. “Finding the main ingredients for these products has become very challenging to the current market.”
The company has 100% ownership of three barium sulfate projects, including a project in British Columbia which contains more than 60 years of supply of pharmaceutical-grade barium for imaging contrast media.
They also are working on an iodine brine project in Utah and are considering additional resources after performing an analysis of iodine-rich brine waters in the U.S.
Gaining price stability and savings through integration
In addition to decreasing dependence on outside providers, other potential benefits of vertical integration are price stability and cost savings, Willis noted, explaining that their team of contrast media experts and doctors from the radiology pharmaceutical industry helps provide expertise to extract minerals and develop products such as a new carbon fullerene drug for MRI.
“By combining these talents, our company can vertically integrate by extracting the main ingredients for our pharma product lines, which allows our company to have the lowest cost of ingredients compared to all our competitors,” he said.
A three-part strategy toward independence
As CEO Willis noted, the path to eventual vertical integration has several steps. Their plan—which may also prove relevant to other companies seeking similar solutions—is to move from “stage 1” of using imported ingredients and a contract manufacturer, to “stage 2” involving manufacturing its own products at its own facility using imported ingredients, to “stage 3” where they are both manufacturing products and producing their own ingredients (barium and iodine).
“We are currently in stage 1 of our plan and we are working on advancing to stage 2 in 2023 and stage 3 in 2024,” Willis said.