The wave of covid in China threatens another entanglement of the US medical supply chain.

United States is already dealing with unrelated scarcity of medicines for children, including pain relievers and antibiotics.

US officials and medical providers said in interviews that They were closely monitoring the situation in China and had yet to see any shortages directly related to the latest wave of infections there. Biden administration officials said they had been coordinating among federal agencies to monitor the supply chain and did not anticipate significant shortages, unlike at the start of the pandemic, due to government efforts to bolster US stockpiles and moves by companies to lessen their dependence on China. .

“We are very much looking for potential early warning signs in the medical supply chain for any type of disruption,” an administration official said. “At this point, we have not detected any actual or likely disruption, at least in the flow of drugs or PPE (personal protective equipment) devices or supplies to the United States given what is happening in China.”

But healthcare executives and supply chain analysts are seeing the impact of the latest The wave of covid could take months to work its way through the supply chain and much will depend on the trajectory of the pandemic in the coming weeks, something US officials have limited insight into given the lack of Chinese data.

“One of the main concerns throughout the pandemic has been that due to China’s zero covid policy, the lockdowns have greatly reduced manufacturing capacity in China. Obviously, this is that kind of activity on steroids,” said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota. “This is by far the worst of the supply chain challenges we have seen so far in China pandemics.”

Potential shortages could range from generic drugs, such as antibiotics and blood thinners, to electronic components used in advanced medical devices. Despite efforts over the past two years by the Biden administration to bolster the nation’s domestic medical supply chain, the complexity, cost, and regulations involved in manufacturing health care products have limited the firm’s ability to change output.

Employees make face masks on a production line at a glove factory, which started producing face masks as overseas mask orders were at a peak amid the coronavirus outbreak, on May 16, 2020 in Shenyang, China. Liaoning province of China.
Employees make face masks on a production line at a glove factory in Shenyang, Liaoning province, China, May 16, 2020.Yu Haiyang/China News Service via Getty Images file

“When you have specific intellectual property that is associated with a specific manufacturer or you have very expensive factory production, which is typical in the pharmaceutical industry and critical components like integrated circuits, those are not reverse moves, there is a lot to that,” he said. . Douglas Kent, executive vice president of corporate and strategic alliances for the Association for Supply Chain Management.

The US imported $3.2 billion worth of drugs and active pharmaceutical ingredients directly from China in 2020, including antibiotics, antidepressants, birth control pills and chemotherapy drugs, according to a 2021 supply chain. analysis for the White House.

More than a quarter of the facilities that make the active ingredients of anticoagulants for the US and nearly 20% of those that make a type of anesthetic are in China. Drugs imported into the US from other countries, such as India and those in Europe, also source the vast majority of their ingredients from China, according to the report.

The US health care system has already been dealing with a variety of shortages over the past year as a result of China’s anti-Covid policies that have shut down factories and disrupted the flow of goods across the country. Last spring, doctors had to limit medical scans after a GE plant that produced an imaging agent used in the procedure was shutdown for weeks.

The Health Industry Distributors Association found that shipment delays for medical products have persisted over the past year in part due to bottlenecks created by manufacturing from China. covid outages. The group found up to 10,000 medical containers were delayed an average of 25 days in October.

“While the situation has improved compared to the early stages of Covid in 2020, manufacturers and distributors still face shortages, long lead times and supply risks, combined with higher operating costs,” said Vijay Mohan, Vice President of o9 Solutions. . , which provides supply chain management technology to healthcare companies. “The new wave of Covid that has started to make a resurgence will further amplify the challenges.”

There are some early signs of a slowdown in China’s largest ports and the completion of manufacturing orders, according to Data from CNBC. Other shipping data shows that ocean crossings have continued to decline. But industry analysts say it will take several more weeks to determine how much of that is due to the virus and how much is due to declining demand from American consumers caused by other economic factors.

The lack of data coming from China on the number and location of infections, the fatality rate, and variants has made it particularly difficult for companies to assess where they may encounter disruptions. Logistics executives said they have it has been relying on its network of Chinese contacts and analytical data, which so far have not indicated any major problems.

“We have this colossal, unprecedented, very fast-moving pandemic that will reach multiple peaks in multiple different geographies at different times, and we’re kind of blind to the data that would start to give us a clearer picture of what’s going on. said Stephen Morrison, director of the Center for Global Health Policy at the Center for Strategic and International Studies.

Still, Morrison doesn’t expect the outages to be prolonged or extended because healthcare companies have already been moving their operations away from China.

“There have been a lot of adjustments by the industry, which has already started to calculate that, in terms of their strategic interests, they needed to reduce their exposure to China and diversify. So now it’s a different reality,” Morrison said. “If this had happened at the beginning of the pandemic, the impacts would have been greater, but we have had three years of recalibration.”

Companies may also have to deal with the risk that China will divert medicines and medical supplies to meet the needs of its own population and stop exporting those products to other countries.

“If you build things that are needed to keep your people healthy and there aren’t enough to go around, you’re going back to domestic contentment. I think that would be a natural response,” said Douglas Kent, executive vice president of corporate and strategic alliances for the Association for Supply Chain Management.

Chinese media reports They indicate that the country has been running low on fever-reducing items such as ibuprofen and acetaminophen, and Chinese companies are adjusting production to meet those demands. But US officials said they did not anticipate there would be significant shortages of those drugs in the US. Johnson & Johnson, which makes Tylenol and Motrin, said it did not source any of the active ingredients in those drugs from China.

Health care officials say they hope the US is in a better place to withstand any shock from China. After hospitals saw shortages of gloves, gowns and masks in the early days of the pandemic, many moved to keep larger stocks on hand. Hospitals have also increasingly sought to diversify which countries their essential supplies come from.

“We’ve seen a lot of success throughout the supply chain in ensuring inventories are where they need to be,” said Kyle MacKinnon, senior director of operational excellence at Premier, which helps healthcare providers manage their supply chains. “It looks like there is room to absorb some potential impacts from this. Now to what extent is it a little more difficult to identify because of the potentially very large level of covid cases.”

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