As the novel coronavirus outbreak continues to spread across the globe, Europe and the US are bracing for disruption to the medicine supply chain.
The raw ingredients for most European drugs often come from China and India. Recently the dependence on Asia for low cost supply of active pharmaceutical ingredients (API) has caused alarm due to shortages because of impurities in the manufacturing processes of many sites in China and India. Now, the novel coronavirus outbreak is shutting down API factories in China, which will surely exacerbate the existing shortages.
It is predicted that generic medicines will be greatly affected, as they are frequently produced with 80% of the initial ingredients coming from outside the US and Europe. Generic medicine ingredients are sourced at the lowest cost to maximise profit margins, with China and India being the cheapest locations for production.
The US Food and Drug Administration (FDA) has released a supply chain update, announcing their first shortage as a result of Covid-19. A Chinese API manufacturer has notified the FDA that their site is directly affected by Covid-19 which has impacted their API production. However, as there are alternative drugs available, the FDA will work with other manufacturers to minimise the effects of the shortage. They have also identified a further 20 API’s which are sourced from China, and are making plans to assess the risk of supply disruption to these ingredients due to the outbreak. Currently, the FDA is not aware of any shortages in advanced therapy medicinal products (ATMP) or biologics.
It is also predicted that there will be a global supply disruption of cough and cold medicines as influenza and Covid-19 reach their peaks.
As for medical devices, there has been a desperate worldwide shortage of face-masks. There could be future problems with other medical technology products from not only China, but other countries which are severely affected by the new epidemic.
In the European Union (EU), notified bodies (NB) verify the safety and efficacy of medical devices, as well as auditing factories. Due to the lack of notifies bodies because of the incoming changes to medical device regulations, medical device supply is already under threat. The coronavirus outbreak could deepen this threat further.
Certain European ministers have now called for an end to the EU’s dependence on foreign supplies, and the possibility of incentives to bring API production back to Europe. However, under current regulations, it is difficult for companies to switch suppliers due to the regulations and applications required. Furthermore, the cost of using European API producers may negate the profitability of generic medicines.
The current situation regarding the coronavirus highlights the risks of prioritising low-cost medicines procurement.