COVID-19: Medical supply chain at risk as virus spreads

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Erin McCallister Senior Manager, Health Research Institute, PwC US March 02, 2020

Makers of drugs, medical devices and durable medical equipment, and the users of these products, are beginning to see supply chain disruptions as COVID-19, the disease caused by SARS-CoV-2, continues its march across the globe.

The FDA halted its inspections in China for February and has postponed, for now, many of its March inspections, stating on Feb. 24 that it is taking steps to ensure the safety of medical products as well as access to them. The agency also has reported its first shortage of a drug due to COVID-19, although it says there are alternatives.

In a statement released Feb. 14, FDA Commissioner Dr. Stephen Hahn wrote that the agency was being proactive. “We are not waiting for drug and device manufacturers to report shortages to us,” Hahn wrote, adding that the FDA has allocated additional resources to identify potential shortages related specifically to the SARS-CoV-2 outbreak and is coordinating with other international regulators.

Twitter statement from FDA chief Dr. Stephen Hahn on impact of covid-19, sars-cov-2 on drug supply chain and medical device supply chain

Hahn, in a previous statement, wrote that the agency is tracking reports of increased ordering of medical products, such as respirators, that could result in shortages. If a shortage of any drug or device is identified, the FDA will use “all available tools to react swiftly,” according to the commissioner, such as working with the manufacturers involved in the shortage and expediting the review of alternate drugs or devices.

Hahn said the FDA is requesting records from facilities in China to prioritize which facilities to target once inspections resume and identify products at the time of importation that may violate FDA rules.

According to Johns Hopkins Center for Systems Science and Engineering, which has been tracking data globally on the epidemic, there have been about 90,000 confirmed cases of COVID-19 globally, including 80,000 in China, as of the morning of March 2. Three thousand deaths have been officially attributed to the disease. In the US, the number of confirmed cases numbered 86 as of the morning of March 2, but that number is expected to rise as testing becomes more widely available.

HRI impact analysis

China is the second-leading supplier to the US of drugs and the top supplier of medical devices. According to a July 2019 congressional testimony by Mark Abdoo, associate commissioner for global policy and strategy at the FDA, 13.4% of drugs in the US come from China, with 83% imported as drugs ready for the market and 7.5% as active pharmaceutical ingredients (APIs).

In a Feb. 12 testimony before the Senate Committee on Homeland Security and Governmental Affairs, former FDA Commissioner Scott Gottlieb said that 40% to 45% of US imports of penicillin and 40% of heparin imports come from China. Additionally, 80% of antibiotics in the US are made in China, said Gottlieb, a resident fellow at the American Enterprise Institute.

China is the leading supplier of APIs to countries around the globe. China supplies 80% of the APIs used by companies in India, which is the largest supplier globally of generic drugs, according to the annual report from the US-China Economic and Security Review Commission issued in November 2019.

China is also a major location for clinical trials. In his testimony, Gottlieb said an analysis of ClinicalTrials.gov found 16,490 studies registered in China with 5,086 recruiting patients, or about 10% of all active studies in the registry. BioCentury found 224 global Phase III trials sponsored by multinational companies with sites in China as well as 29 Phase III trials that are solely in China and have not yet reached the last patient visit needed to measure the primary endpoint.

The FDA’s decision to suspend inspections in China for now comes at a time when some stakeholders are skeptical of the quality of imported drugs. Survey data presented earlier this month showed that nearly three-quarters of patients and physicians were uncertain or didn’t believe that drugs manufactured outside the US adhered to FDA manufacturing quality standards and regulations.

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Contact us

Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

Erin McCallister

Senior Manager, Health Research Institute, PwC US

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