The raging coronavirus outbreak that has shut down employers and paralyzed business in China could soon constrain the production of core ingredients for critical drugs and medical products sold thousands of miles away in the U.S.
Restrictions on travel to and from China have forced the U.S. Food and Drug Administration to postpone inspections of Chinese factories. This delay could interfere with China's ability to continue supplying the U.S. with the active pharmaceutical ingredients for antibiotics and other medications used to treat serious illnesses, including tuberculosis, experts said.
"There is a lot of reliance on China for antibiotics, and I worry about it for sure," said former FDA compliance executive Steven Lynn, who now runs a consulting firm. "The worst-case scenario is China starts shutting down all its ports. That means no more air traffic, boats or trains are going out, and raw material can't get out of the country."
At particular risk of running short, is the U.S. supply of antibiotics such as amoxicillin, doxycycline, penicillin and other key drugs, with experts noting that 90% of their core components are sourced in China.
Demand for the anesthetics epinephrine and propofol, as well as pain reliever fentanyl, is also increasing at hospitals in China that are treating patients with coronavirus. Their supply is limited, and China could start stockpiling medical ingredients to treat its own citizens, some experts warn.
Medical writer Rosemary Gibson, author of "China Rx," which highlights the U.S.'s dependence on China for medicine, has long advocated for the rebuilding of domestic drug production capabilities to safeguard the U.S. from a disruptive event like the coronavirus outbreak.
"We have a couple of perfect storms that are colliding. Large parts of China are locked down. People are not going to work. They are not making essential medicines and even if they were made, transportation routes are blocked," she told CBS MoneyWatch.
Gibson said she fears China could begin nationalizing medicines that would otherwise be exported to the U.S. and other countries. "Whatever supply of essential medicines China has is needed to care for Chinese people that are suffering. It means we in the U.S. are not going to have as much as we thought we would. It's very scary," she said.
FDA expects supply chain disruption
The FDA said last week it already expects the deadly disease, officially called COVID-19, to cause "potential disruptions to supply or shortage of critical medical products in the U.S."
"We are keenly aware that the outbreak will likely impact the medical product supply chain," the FDA said in a press release.
The FDA has a list of 150 prescription drugs facing shortage risks, Axios reported over the weekend, citing sources familiar with such a list.
The agency did not outline which drugs or medical products could be hit, but virtually no industry with manufacturing operations in China is insulated from the effects of the coronavirus. The disease has infected more than 75,000 people and killed more than 2,200.
Meanwhile, many U.S. companies with factories in China are struggling to find enough workers to staff production lines, according to the American Chamber of Commerce in Shanghai. Most notably: Apple, which reported last week it would miss its revenue target for the current quarter, owing to coronavirus-related store closures and reduced manufacturing capacity in China.
Drug companies have not yet reported coronavirus-related supply deficiencies, but experts say they are on the horizon. "It's definitely not a time for fear-mongering, but we could start to see shortages," Lynn said.
Chinese companies also manufacture numerous FDA-approved medical supply components, including parts for pulse oximeters to measure blood oxygen levels, MRI machines, catheters, dental implants and more.
Medtronics, a Dublin-based medical technology company that makes everything from insulin pumps to coronary stents, this week said it would take a hit from delayed factory re-openings because of the coronavirus.
"Given the fluidity of this situation, the duration and magnitude of the impact are difficult to quantify at this time," Medtronics Chief Executive Omar Ishrak said on a conference call with analysts.
Leaning on China
The U.S. is partially reliant on China for the raw ingredients that go into some 370 drugs that are sold in the U.S. and deemed "essential" by the World Health Organization (WHO). Only 21% of the manufacturing plants that make the ingredients for those drugs are located in the U.S. — 15% are located in China, and 64% are in other countries.
Three of those 370 drugs rely on active pharmaceutical ingredients that are only manufactured in China. They are: Capreomycin and streptomycin, both used to treat mycobacterium tuberculosis; sulfadiazine used to treat chancroid, a sexually transmitted disease; and trachoma, a bacterial infection of the eye.
Pharmaceutical company Akorn, which makes Capastat Sulfate, a version of capreomycin, declined to comment on concerns that the U.S. could run low on some Chinese-made drugs.
Several leading pharmaceutical firms said they have safeguards in place if supplies of drug components run low:
- Roche told CBS MoneyWatch it sources one active pharmaceutical ingredient from China, which it has in supply and can also source from another location. "Our global manufacturing network has robust plans for dealing with the impact of potential health crises and is actively assessing and monitoring this situation," a Roche spokesperson said.
- Merck said it is assessing potential supply shortages, and that it could experience supply-chain disruptions should the outbreak continue to spread: "The situation is fluid, but at this point we do not anticipate impacts to our supply chain unless disruption due to the COVID-19 outbreak is sustained over the next several months," the company said in a statement to CBS MoneyWatch.
- Several other top drugmakers, including Bayer, Johnson & Johnson and Pfizer, told industry news site Fierce Pharma that they are prepared should they face supply shortages.
- Allen Goldberg, a spokesperson for the Association for Accessible Medicines, a trade group representing generic drug manufacturers, said that both brand-name and generic drugmakers are positioned to handle a potential supply-chain disruption.
The FDA last week said it is working with drugmakers to assess supply concerns. "We are not waiting for drug and device manufacturers to report shortages to us — we are proactively reaching out to manufacturers as part of our vigilant and forward-leaning approach to identifying potential disruptions or shortages," the agency said.
But the clock is ticking, despite drug companies reporting sufficient supplies of ingredients, experts say. Some offshore manufacturers — companies in India, the U.S. and Europe — that make finished drugs using core chemicals from China could run out of active ingredients come March unless their supplies are replenished.
"They certainly have inventory, but it's getting dicey," Gibson said.