Worries about pharma's reliance on China for its supply of key drug ingredients have popped up in the U.S. from time to time before. Now, the rising coronavirus has sparked the fear again.
As of Sunday, China had reported more than 17,205 confirmed cases of 2019-nCoV in humans. The death toll has reached 361. The mushrooming case count and various measures aimed at thwarting the disease are straining medical supplies in China, though it's mostly protection products, such as masks, running short so far.
But as the virus continues to spread across China and beyond, one question emerges: If China prioritizes drugs for its own use amid surging domestic demand—or if the outbreak spurs further bans on international travel and trade, such as the restrictions now imposed by the U.S.—can other parts of the world sustain an adequate drug supply?
There's no question that China is a major supplier of drug ingredients to the U.S., especially for widely used generics. For example, according to U.S. International Trade Commission data cited in a U.S.-China Economic and Security Review Commission report (PDF), China accounted for a 70.4% share of U.S. antibiotic imports in 2013. Today, that number may be even higher at a dominant 97%, according to Gary Cohn, previously chief economic adviser to President Donald Trump, as quoted by Yanzhong Huang, a senior fellow for global health at nonprofit think tank the Council on Foreign Relations (CFR).
And questions about that dependence on Chinese sources for essential medicines have repeatedly surfaced in the U.S.—once as tainted valsartan was first traced to an API from China’s Zhejiang Huahai Pharmaceutical, once amid U.S.-China trade tension and once as an African swine fever threatened heparin supply. And that's just in the last few years.
For instance, in the heat of the now partly resolved U.S.-China trade war, Li Daokui, an economist at Tsinghua University and an adviser to Beijing, raised the possibility of China curbing exports of antibiotics as a countermeasure.
“Just as some international analysts have pointed out, we are indeed at the mercy of others when it comes to computer chips, but we are the world’s largest exporter of vitamin and antibiotic ingredients,” Li said last March during a speech at a national advisory conference, as quoted by state-run Xinhua (Chinese). “If we cut back exports, some western countries’ medical system won’t operate well.”
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China at least isn’t likely to throw the first punch. As CFR’s Huang noted in his blog post, China needs innovative finished drugs made in western countries for diseases such as cancer. However, the coronavirus epidemic adds a different fold of uncertainty: domestic demand.
Supplies of a traditional Chinese herbal concoction called Shuanghuanglian immediately ran out both online and in pharmacies after state media reported Friday that the drug could “inhibit” the new deadly coronavirus.
The report cited research at the Chinese Academy of Science’s Shanghai Institute of Materia Medica and the Wuhan Institute of Virology. Even though the idea was quickly rejected by the wider science community, it does show China—with a population of 1.4 billion—can deplete drug supplies amid an epidemic. By that time, it simply might not have enough left for the rest of the world.
“I would be asking my supply chain folks, what do we have coming from China, what’s our inventory, and if we don’t have enough, can we get as much as fast possible?” Steven Lynn, an FDA official turned consultant, said in a Stat report. “And remember, this isn’t just a U.S. problem. It’s a global problem if China starts shutting down its borders.”
Then there's also the concern that if the virus continues to spread and infects more people, manufacturers might struggle to maintain enough healthy employees to get the job done, or they might scale back daily on-duty staffers—especially those working on drugs for non-communicable and other less deadly but important diseases. Although most drug manufacturers are clustered in the provinces of Zhejiang, Jiangsu and Shandong along China's East Coast far from Wuhan in central China, the fact that the virus has been detected in every province makes such distance almost irrelevant.
But that scenario seems unlikely right now, as the Chinese government has already urged drugmakers to maintain or even increase their supplies to help the country whether the challenge. Chinese CDMO WuXi Biologics, for one, just reassured the public it will continue to make the critical drugs for clients around the world.
“We have sufficient number of staff to resume operations after the holiday break,” the company said. ”We have a strong GMP quality system and a robust global supply chain. We do not expect to see any negative impact of this outbreak on our operations.”
Multinational pharma companies also say they are well prepared.
“Pfizer consistently and diligently monitors the supply of our medicines,” a Pfizer spokesman told FiercePharma in a statement Friday. He pointed to the company’s 40 self-owned sites and more than 200 suppliers globally, “which provide capacity and redundancy as needed.” Most of its finished products and APIs come from countries other than China, he said.
Johnson & Johnson is also on the lookout for the coronavirus situation. “We have robust business continuity plans in place to prepare for unforeseen events and to meet the needs of the patients, customers and consumers who depend on our products,” a J&J spokesperson said.
That includes “critical inventory” at major distribution centers outside high-risk areas, the spokesperson said, as well as working with external suppliers.
A Roche representative told FiercePharma the Swiss drugmaker has one API for global demand coming from China “with existing stock reserves and the opportunity to source from another location,” adding that the company has “robust plans for dealing with the impact of potential health crises.”