On March 11, a heavy news broke out. Foreign media sources said that the US FDA said on March 10 (Tuesday) that it would delay the review of almost all foreign medicines, medical equipment, and food until April. This decision may also affect global drug supply and safety issues.
Shortage of some APIs in the US and India
Prior to this, the US FDA issued a document saying that if the epidemic continues for several months, there will be a shortage of multiple drugs in the United States. The FDA has stated that there are 20 kinds of medicines sold in the United States that are produced in China, or rely on APIs that are only produced in China. FDA data also shows that as of 2018, China was the second largest exporter of US drugs and biological agents, and the largest importer of medical devices.
APIs, or active pharmaceutical ingredients (APIs), are chemical substances or biological substances that have beneficial therapeutic effects in medicines, and are the basic molecules used in the composition and production of any medicine.
On February 27th, the FDA updated the description of the impact of COVID-19 on the supply chain of US pharmaceutical companies. It mentioned that at least one drug is currently suffering from supply difficulties due to the epidemic. Although the drug has not been publicly disclosed, according to the US Pharmacopoeia CEO Dr. Ron Piersonsen, the shortage of drugs is very likely to be antibiotics, or at least an antibacterial agent.
He pointed out that currently 80% of the world's antibiotic raw materials come from China. Although antibiotics are not used in viruses, the virus will cause secondary infections, so the current shortage of antibiotics is more serious.
India's generic drug industry chain is also highly dependent on China, with about 70% of its raw materials imported from China. The outbreak of the Chinese epidemic led to delays in resumption of work, and raw materials stockpiled in India also announced an emergency. India's Indian Pharmaceutical Alliance (IPA) Secretary-General Jain even stated that due to the interruption of the supply of raw materials in China, large pharmaceutical companies can only maintain for 2 to 3 months, while small companies can only persist for 30 to 40 days. In addition, it is worth noting that on March 3, India decided to restrict the export of some medicines and APIs, including 26 kinds of ingredients and preparations including paracetamol, tinidazole, erythromycin, clindamycin, etc. It shows that the epidemic is causing damage to the drug supply chain.
At present, China's epidemic prevention and control has achieved good results, but the epidemic situation abroad is not optimistic. According to the latest daily epidemic report released by WHO, as of 10:00 March 10th Central European Time (17:00 Beijing time 10th), the number of confirmed cases of new coronary pneumonia outside China increased by 4105 cases to 32778 cases from the previous day; The number of deaths outside of China increased by 186 from the previous day to 872.
Affected by the global spread of new coronary pneumonia, on the one hand, many countries need to take measures to prevent and control. On the other hand, in order to reduce the risk of overseas imports, China needs to continue to adopt a certain degree of restrictions on the flow of personnel. Some pharmaceutical industry manufacturers cannot fully resume work due to labor shortages. Some countries that rely heavily on Chinese APIs may have some drugs in the short term. Panic.
Prices of raw materials such as antibiotics and vitamins have soared
At present, China's API industry is undergoing a normalized “supply-side” reform driven by high-pressure environmental protection, consistent evaluation quality improvement, and related review policies. The industry's concentration has increased and the “high barriers, high investment, high "Return".
Affected by the epidemic, there have been some fluctuations in the supply of APIs in the short term. The global spread of the epidemic now directly threatens the global production capacity of APIs. In addition, India, the country with the second largest API, has begun to restrict the export of some APIs. It is expected that the prices of APIs will rise sharply.
Recently, Ping An Securities Research also pointed out that the prices of bulk APIs such as vitamins are currently rising. Affected by the new crown epidemic, the market prices of many vitamin varieties have risen recently. Among them, VB1, biotin, VK3, VE, nicotinamide, VD3, VA and other gains are among the top gainers, up from the previous year (January 20, 2020) 106%, 86%, 59%, 34%, 18%, 16%, 7%.
Antibiotic is recommended as a new coronavirus prevention and treatment guide, and the dosage has been increased to a certain extent. In addition, the delay in resumption of work has led to tight supply, which has caused some antibiotics to increase in price. Especially for the intermediate varieties in an oligopoly pattern, taking 6-APA as an example, the recent federal pharmaceuticals, Kelun Pharmaceutical, and Wichida have increased the 6-APA factory offer to 180 yuan/kg, compared with the previous 145 yuan/ Kilogram increased by about 24.14%.
Ping An Securities pointed out that the delayed resumption of work caused by the epidemic has a general impact on the pharmaceutical industry. What can be seen from the two fields of vitamins and antibiotics is that there is a certain room for price increases in the varieties of APIs with an oligopoly pattern.
Under the epidemic situation, some countries have begun to show their drawbacks due to the high dependence of some APIs on China. In the future, a series of measures may be taken to change this situation.
