Even before a supply line interruption and lockdowns in China, hospitals and doctors nationwide in the U.S. are facing shortages of crucial lifesaving drugs, with 116 drugs currently running low, according to the Food and Drug Administration (FDA).
For example, heperin, which is used as blood thinner used during cardiac surgery, is made from pig intestines. The ingredient source for most of this drug is from China, and 70% of China’s pigs have been destroyed by swine flu.
China is the largest and only global supplier for the active ingredients in many vital medications. Active ingredients for medicines that treat breast cancer and lung cancer, for example, and the antibiotic Vancomycin, which is a last resort antibiotic for some types of antimicrobial resistant infections. They’re made almost exclusively in China.
China is not only the dominant general global supplier of pharmaceuticals, but it’s also the largest supplier of medical devices and parts for the U.S. These include items like MRI equipment, surgical gowns and equipment that measures oxygen levels in the blood.
Wuhan, the epicenter of the coronavirus outbreak, is a significant player in the biotechnology and pharmaceutical industry, with multiple pharmaceutical companies located in the city. What a coinkydink.
Drug shortages were increasing and lasting longer even before the outbreak, according to an FDA report of the 163 drugs that were running low between 2013 and 2017, more than 62 percent were due to manufacturing or product quality problems. Fifty-six percent of U.S. hospitals reported delays or changes to patient care due to drug shortages during between 2015 and 2017, according to a survey cited by the FDA.
In a market the FDA calls “broken,” drug manufacturers have little incentive to produce older drugs that cost less, leaving only a few companies supplying certain drugs. These are Chinese. The last U.S. penicillin plant closed in 2004.
It could take years to redevelop the necessary infrastructure to reestablish U.S. manufacturing capacities and obtain required FDA licencing necessary to overcome the loss of resources from Chinese suppliers.
Amplifying the issue is the prevalence of bottom-line-focused JIT (just in time) inventory systems that provide little or no room for production curtailments or China First policies during a worldwide pandemic. This may happen by force majaere from China’s own national emergency needs to treat millions in the epidemic.
China will face decisions whether to prohibit the export of pharmaceuticals, medical devices and other vital medical components in order to treat or protect its own people. Such scenarios would be the logical outcome of an escalating situation. In the 2009 H1N1 pandemic response, for example, the U.S. was pushed to the back of the queue for vaccine deliveries even though it had existing contracts with a major vaccine manufacturer located in another country.
Bob Woodward’s book, “Fear: Trump in the White House,” pointed out that Gary Cohn, then chief economic adviser to President Trump, argued against a trade war with China by invoking a Department of Commerce study that found that 97 percent of all antibiotics in the United States came from China.
“If you’re the Chinese and you want to really just destroy us, just stop sending us antibiotics,” Cohn reportedly said.
Cohn’s national security warning was ignored and his tenure in the Trojan Horse Trump administration was short lived.
Cohn exaggerated a little, as actually 80 percent of the active pharmaceutical ingredients (APIs) used to make drugs in the United States are said to come from China.
Many Indian pharmaceutical firms are leading API manufacturers, but India depends on China for sourcing nearly three quarters of APIs in generic drug formulations. In fact, epicenter Hubei province accounts for 50-60% of API imported into India. The Modi government published a list of 57 medicines that are likely to go out of stock following a shutdown.
Even among the drugs that are being imported, there are problems. In the summer of 2018, for example, one of China’s largest domestic vaccine makers sold to the U.S. at least 250,000 substandard doses of vaccine for diphtheria, tetanus and whooping cough. It’s the latest in a slew of scandals caused by poor quality drug products made in China over the last decade.
And now the FDA has pulled its inspectors out of China because of the spreading epidemic. By law U.S. supplies must come from FDA-approved and inspected manufacturers. Even before the coronavirus outbreak, the FDA had told Congress it lacks the staffing needed for oversight in China. It said its work is also hampered by language barriers and its limited ability to conduct surprise inspections there.
Congresswoman Anna Eshoo (D-Calif.), who serves as chairwoman of the House Energy and Commerce Health Subcommittee, said Thursday evening that China’s control of the global supply of many pharmaceutical ingredients is keeping her up at night. She complained she’s not getting answers from U.S. officials on what overseas factories may be shut down amid quarantines.
“We have every reason to worry because we don’t know. Have any of the agencies on behalf of the administration done an inventory?” Eshoo said. “I think they don’t know.”
Even the Pollyanna spinmeister, White House economic adviser Larry Kudlow confirmed in 2020 that the coronavirus could lead to a drop in exports and production in China, particularly in the pharmaceutical sector. And today 40% of China’s GDP is in lockdown.