[Asia Economy Beijing=Special Correspondent Park Sun-mi] Concerns over a global shortage of pharmaceuticals have grown due to the halted operations of Chinese factories amid the spread of COVID-19. The United States and Europe, which heavily depend on Chinese active pharmaceutical ingredients (API), are keeping a close watch on the situation in China, leaving open the possibility of short-term supply shortages.
On the 5th, Hong Kong's South China Morning Post (SCMP) reported that as China stopped factory operations and restricted personnel movement to prevent the spread of COVID-19, there is a high likelihood of problems in the supply of APIs used in antibiotics, diabetes medications, blood pressure drugs, headache medicines, antipyretics, and human immunodeficiency virus (HIV) treatments. It also stated that this threatens global public health.
China is the world's largest producer of APIs. According to the latest statistics from 2018, China's API export volume exceeded $30 billion. The United States imports about 80% of its APIs, most of which come from China and India. According to the U.S. Food and Drug Administration (FDA), the U.S. currently relies entirely on China for APIs for more than 20 drugs. Last year, the U.S. imported 95% of its ibuprofen, 91% of hydrocortisone, 70% of paracetamol, 40-45% of penicillin, and 40% of heparin from China.
Signs of drug shortages are already appearing. The U.S. FDA announced last week that, without specifying drug names or manufacturers, "due to COVID-19, API production has been affected, causing a shortage of one type of drug." Stefan Han, an FDA director, said, "We are closely monitoring the supply chain, keeping open the possibility that the spread of COVID-19 could disrupt the supply of key medicines in the U.S."
Europe is also maintaining vigilance and closely monitoring the situation. The European Medicines Agency (EMA) of the European Union (EU) stated last week, "So far, no API supply shortages have been detected, but we are analyzing and monitoring the situation due to concerns about the impact of COVID-19 on the medical and pharmaceutical supply chain."
Fearing the spread of COVID-19, China extended the Spring Festival (Chinese New Year) holiday at the end of January, halted operations of companies and factories except for essential goods, and restricted interregional population movement. As a result, China's manufacturing Purchasing Managers' Index (PMI) for February recorded 35.7, the lowest ever. About 60% of small and medium-sized manufacturers are still unable to operate their factories normally. China's state-run Xinhua News Agency reported that although the government excluded pharmaceutical factories from the list of industries required to halt operations, pharmaceutical manufacturing has also contracted in reality.
Jiaxi, partner in charge of pharmaceuticals and healthcare at consulting firm PwC China, explained, "How quickly China resumes production will determine the extent of disruption to the global pharmaceutical supply chain," adding, "It is not easy to replace China's large-scale API production with other countries."
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