The US is already struggling with shortages of medicines for children, including pain relievers and antibiotics.
US officials and medical suppliers said in interviews they have been closely following the situation in China and have yet to see any shortages directly related to the latter wave of infection there. Biden administration officials said they were coordinating among federal agencies to monitor the supply chain and, unlike at the start of the pandemic, did not expect significant shortages due to the government’s efforts to bolster U.S. inventories and companies’ moves to reduce their reliance on China. .
“We are very much looking for potential early warning signs of any kind of disruption in the medical supply chain,” an administration official said. “Given what is currently happening in China, we have not detected any current or suspected violations, at least with regard to the flow of drugs or devices or supplies of PPE (personal protective equipment) into the United States.”
But healthcare executives and supply chain analysts are wary of China’s latest influence It could take months for a wave of Covid to move through the supply chain, and much will depend on the trajectory of the pandemic in the coming weeks, with officials in the US having limited insight in the absence of data from China.
“One of the main concerns throughout the pandemic is that shutdowns due to China’s zero-Covid policy have significantly reduced manufacturing capacity in China. This is clearly the type of activity on steroids,” said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. “This is the worst of the supply chain problems we’ve seen so far in pandemics from China.”
Potential deficiencies can range from common drugs such as antibiotics and blood thinners to electronic components used in advanced medical devices. Despite the Biden administration’s efforts over the past two years to strengthen the nation’s domestic medical supply chain, the complexity, costs and regulations associated with healthcare manufacturing limit companies’ ability to transform manufacturing.
“When you have proprietary intellectual property tied to a particular manufacturer, or when you have very expensive factory manufacturing, which is typical for pharmaceuticals and critical components like integrated circuits, these aren’t flip moves, there’s a lot that goes into it,” he said. Douglas Kent, executive vice president of corporate and strategic alliances at the Supply Chain Management Association.
The U.S. imported $3.2 billion worth of drugs and active pharmaceutical ingredients directly from China in 2020, including antibiotics, antidepressants, birth control pills and chemotherapy drugs, according to the White House’s 2021 supply chain analysis.
For the United States, more than a quarter of the companies that make active ingredients in blood thinners and about 20% of those that make some type of anesthesia are located in China. According to the report, drugs imported to the United States from other countries such as India and Europe also get the vast majority of their ingredients from China.
The U.S. health care system has been grappling with a series of shortfalls over the past year as a result of China’s Covid policy, which has caused factory shutdowns and disruptions to the flow of goods across the country. Last spring, doctors had to limit medical examinations after the GE plant that makes the imaging agent used in the procedure was shut down for weeks.
The Healthcare Industry Distributors Association found that delays in the shipment of medical supplies have persisted over the past year, in part due to bottlenecks caused by China’s outbreak of Covid-19. The group found that up to 10,000 medical containers were delayed by an average of 25 days in October.
“Although the situation has improved in 2020 compared to the early stages of Covid, manufacturers and distributors are facing shortages, long lead times and supply risks along with increased operational costs,” said Vijay Mohan, vice president of o9 Solutions, which provides supply chain management to healthcare companies. presents the technology. “A new wave of Covids starting to re-emerge will exacerbate the problems.”
There are some early signs of a slowdown in China’s largest ports and manufacturing order completions, according to CNBC data. Other shipping data shows that ocean crossings continue to decline. But industry analysts say it will take several more weeks to determine how much of that is due to the virus and how much is due to lower demand from U.S. consumers brought on by other economic factors.
The lack of data from China on the number and location of infections, death rates and options has made it particularly difficult to assess where companies may face disruptions. Logistics executives said They rely on a network of Chinese contacts and analytics that have so far shown no major problems.
“We have this huge and unprecedented and very fast-moving pandemic that’s going to have multiple peaks at different times in different geographies and we’re a little bit blind to the data that will start to give us more insight into what’s going on. Stephen Morrison, director of the Center for Global Health Policy at the Center for Strategic and International Studies, said.
Still, Morrison doesn’t expect the disruptions to be long or widespread, as healthcare companies have already moved their operations away from China.
“There’s a lot of regulation going on in the industry, they’re already starting to calculate that it’s in their strategic interest to reduce and diversify their exposure to China. So it’s a different reality now,” Morrison said. “If this had happened at the front of the pandemic, the effects would have been greater, but we’ve had a recalibration in three years.”
Businesses may also have to contend with the risk that China will divert drugs and medical supplies to meet the needs of its own population and shift away from exporting these goods to other countries.
“If you build things to keep your people healthy and don’t have enough stuff to go around, you’re going to go back to domestic contentment. I think that would be a natural response,” said Douglas Kent, executive vice president of corporate and strategic alliances at the Supply Chain Management Association.
Chinese media reports that the country has run out of fever-reducing substances such as ibuprofen and acetaminophen, and Chinese companies are adjusting production to meet the demand. But U.S. officials at Johnson & Johnson, which makes Tylenol and Motrin, said they don’t expect a significant shortage of the drugs in the U.S. They don’t buy any of the active ingredients for those drugs from China.
Health officials say they hope the United States is in a better position to withstand any shock from China. After hospitals saw shortages of gloves, gowns and masks in the early days of the pandemic, many moved to keep larger supplies on hand. Hospitals are also increasingly trying to diversify from which countries their main supplies come from.
“We’ve seen a lot of success in the supply chain by ensuring that inventory is where it needs to be,” said Kyle MacKinnon, senior director of operational excellence at Premier, which helps healthcare providers manage their supply chains. “It feels like there’s room to absorb some of the potential effects of that. How difficult it is to put your thumb on the potentially very large-scale level of Covid cases now.”