COVID-19: Impact on Global Pharmaceutical and Medical Product Supply Chain Constrains U.S. Production
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March 31, 2020
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Pharmaceutical and medical product supply chains are struggling on a global scale to keep pace with the rapid spread of the COVID-19 virus. Below is a snapshot of the impact of the global medical supply chain on U.S. medical supply production, a summary of the actions taken by the Chinese government and the U.S. FDA to address this crisis, and the “new norm” that may materialize in the coming months.
Pharmaceutical Impact
The disruptive effects of the coronavirus COVID-19 have placed enormous strain on the global supply of medical products, increasing the risk of shortages. Although production across various industries and regions in China has been gradually resuming since late February, U.S. pharmaceutical and medical device manufacturers, which heavily source directly and indirectly from China, are now exposed to high risks in supply shortages over the next one to two months.
These risks are due primarily to limited operational capacity in China and how resumption of production will be prioritized. In the United States, approximately 72 percent of active pharmaceutical ingredients (APIs) that supply the domestic market are foreign-sourced. Production in China (which manufactures 13 percent of U.S. medical products), for instance, has been significantly curtailed as the country strives to contain the outbreak.
India (the source of 18 percent of U.S. pharmaceutical imports) is also constrained. Furthermore, the country has restricted the exportation of 26 pharmaceutical ingredients and the medicines manufactured from them, which add up to 10 percent of its total pharmaceutical exports.
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March 31, 2020
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