Coronavirus: Will the Outbreak Lead to US Drug Shortages?

A media report of potential drug shortages because of the ongoing novel coronavirus (COVID-19) outbreak has one senator sending a letter to the US Food and Drug Administration (FDA) seeking answers.
 
On Sunday, Axios reported that FDA has compiled a list of about 150 drugs that are at risk of shortage because of COVID-19.
 
In response, Senator Josh Hawley (R-MO) on Monday sent a letter to FDA asking the agency what it is doing to head off any potential shortages and whether the agency needs new authorities to gather information from manufacturers about the supply of components used to make their products.
 
In the letter, Hawley also frets about the US reliance on China for drugs, writing that “the degree to which our own manufacturers rely on China to produce life-saving and life-sustaining medications is inexcusable.”
 
FDA Commissioner Stephen Hahn acknowledged that the agency is “keenly aware that the outbreak will likely impact the medical product supply chain, including potential disruptions to supply or shortages of critical medical products.”
 
And although no shortages have been identified yet, Hahn said Monday that FDA has been in contact “with hundreds of manufacturers of human and animal drugs and medical devices to detect indications and early warning signs of potential manufacturing discontinuances or interruptions.”
 
Outbreak
 
While the coronavirus outbreak appears to be slowing in China, much of the country remains on lockdown and companies have struggled to get back to work as concerns about the virus persist.
 
As of Monday, the World Health Organization (WHO) said there have been more than 77,000 cases of COVID-19 and 2,618 deaths in China. “In the past 24 hours, China has reported 416 new confirmed cases, and 150 deaths. We’re encouraged by the continued decline in cases in China,” said WHO Director-General Tedros Adhanom Ghebreyesus.
 
However, outside China there has been a surge in new cases in countries including hundreds of new cases in Iran, Italy and South Korea, with WHO reporting 2,074 cases in 28 countries.
 
Supply Chain Concerns
 
Because China is one of the world’s largest suppliers of active pharmaceutical ingredients (APIs) and other raw materials used to manufacture drugs, concerns have been raised that prolonged disruption due to the coronavirus outbreak in China could impact the US and global pharmaceutical supply chain.
 
In India, where much of the world’s generic drugs are made, companies have reported surging prices and winnowing supply for many pharmaceutical ingredients coming from China.
 
FDA has also acknowledged that the offshoring of drug manufacturing poses risks. In a 2019 report on drug shortages, the agency notes that 88% of API manufacturing sites and 63% of sites making finished dosage forms are located outside the US. China accounts for 14% of the API manufacturing sites and 8% of the finished dosage form manufacturing sites for US drugs.
 
“Although these moves may have resulted in cost savings, they have also made it more difficult for firms to coordinate across the entire supply chain and enforce quality management in manufacturing sites,” FDA wrote.
 
While concerns over potential drug shortages may be more pronounced during public health emergencies, such as the coronavirus outbreak, there has been increasing interest in diversifying API production.
 
French drugmaker Sanofi announced on Monday that it is creating a new company focused on manufacturing APIs at six existing European production sites in France, Germany, Hungary, Italy and the UK.
 
“With increasing medicine shortages that critically impact patient care, the new entity would contribute to supporting and securing API manufacturing as well as supply capacities for Europe and beyond,” Sanofi writes, noting that the company would be the world’s second largest API manufacturer with an estimated €1 billion ($1.1 billion) in sales by 2022.
 
Bernstein analysts point out that the $120 billion API market “is highly fragmented,” with around 600 companies, many of whom are “over reliant on Asian suppliers.”