THE THREAT OF MEDICINE disruptions from the COVID-19 pandemic may pose a larger threat to public health than the virus itself.
Coronavirus-related supply-chain interruptions in China, which along with India is responsible for 80% of America’s generic drug supply, may cause severe shortages of essential medicines, including antibiotics, heart drugs and painkillers, in the U.S.
Last month, the Food and Drug Administration announced the first domestic drug shortage due to a manufacturing disturbance caused by the coronavirus. The number of medicine shortages will likely only grow in the coming weeks alongside coronavirus cases.
We have been warning about the threats posed by American overreliance on Chinese medicine manufacturing for years. It gives us no pleasure to say, “We told you so.”
Decades ago, most prescription drugs consumed by Americans were made in the U.S., but for tax, regulatory, and labor cost reasons, many drug companies have offshored manufacturing. U.S. policymakers and health officials should use this supply shock to finally spur the reshoring of manufacturing for the country’s most vital medicines. The status quo risks not only public health but also national security.
Due to supply disruptions from China, India recently announced that it is freezing exports of 26 essential drugs and drug ingredients to ensure its domestic population is covered. The U.S. receives roughly 40% of its generic drugs from India, which imports the vast majority of its raw materials from China. Last year, India accounted for roughly one-fifth of the world’s generic drug exports by volume.
One of our biggest fears is that China may similarly nationalize its drug supply if it cannot manufacture an adequate amount while its economy is largely idled. This move would create widespread shortages of essential medicines in the U.S., almost surely eclipsing coronavirus as the nation’s biggest public health threat.
Fortunately, Chinese manufacturers are slowly returning to work. That trend may change, however, if workers cause new coronavirus clusters to emerge.
The shortage threat is especially pronounced for generic antibiotics, classes of which China is the only manufacturer. Antibiotics are essential to treat a wide variety of common infections that otherwise would be life-threatening. They are also key in the fight against the secondary infections that may result from the coronavirus, suggesting that lack of access to them may be driven not only by supply-side constraints but also by increased demand. Most of the drugs on India’s no-export list are antibiotics.
“This first (FDA) shortage is almost certainly an antibiotic or at least an antimicrobial agent,” Ron Piervincenzi, chief executive officer of the United States Pharmacopeia, told Forbes. The U.S. shut down its last domestic antibiotic manufacturing plant in 2004.
Yet dozens of other drugs are affected. The FDA has identified roughly 20 drugs that are solely made in or derive their active pharmaceutical ingredients from China. The U.S. is partly reliant on Chinese raw ingredients for 370 medicines deemed “essential” by the World Health Organization. According to one research study, the prices on pharmaceutical raw materials have grown by up to 50% since the outbreak began.
Despite the well-publicized threat, reliance on Chinese medications has only increased in recent years. According to a U.S. government report released last year, U.S. imports of Chinese pharmaceutical materials grew by nearly one-quarter in 2017 from the prior year to nearly $4 billion.
In order to protect the generic drug supply chain, the U.S. must produce its most vital medications, such as antibiotics, insulin and anesthesia, at home. In their 2018 book “China RX,” authors Rosemary Gibson and Janardan Prasad Singh lay out 10 steps to achieve this goal. These include deeming medicines a strategic asset, providing incentives to bring manufacturing home and increasing FDA testing of medications.
More broadly, Congress must also look at the regulations, taxes and barriers that originally drove drug suppliers offshore. To develop treatments and vaccines for coronavirus and put this crisis behind us, policymakers must allow drug-makers to put as much money as possible into research.
Coronavirus must force policymakers to finally act to shore up the U.S. drug supply and foster homemade cures. Such actions would be a silver lining to the coronavirus pandemic.
In 2005, the Food and Drug Administration found that close to 85% of “Canadian” drugs actually came from 27 other countries. It is also estimated that 1 in 10 drugs from developing countries are counterfeit, according to the World Health Organization. (PHOTO GETTY STOCK IMAGES)
EFFORTS TO IMPORT prescription drugs from Canada received a big boost in May when President Donald Trump reiterated his support for the proposal. Trump reportedly directed Health and Human Services Secretary Alex Azar to work with Florida, which is one of 16 states pursuing importation legislation, to get the necessary federal approvals as quickly as possible. According to Florida Rep. Matt Gaetz, the president is “chomping at the bit for this solution to lower drug prices.”
As former presidents of the California State Pharmacy Board, we sympathize with patients suffering from the significant increase in prescription drug list prices in recent years. We’ve seen personally and professionally the medical and financial consequences of rising out-of-pocket drug costs throughout our careers.
Widescale drug importation from Canada, however, is not a practical solution to this problem. It is a distraction from efforts to address the real prescription drug cost drivers. In the words of Secretary Azar, it’s “a gimmick.” Trump and legislators should redirect their efforts to proposals that could actually make a difference short term and long term in lowering costs.
Perhaps conflating its geographic size, importation proponents seem to overlook Canada’s small population, which is less than California’s. There’s no way that our neighbors to the north could supply the U.S. market — or even a handful of states — with all of its prescription drug needs. According to the Canadian Pharmacists Journal, Canada’s drug supply would run out in 224 days if merely 10% of U.S. prescriptions were filled with Canadian drugs. The former Health Minister of Canada said, “Canada cannot be the drugstore for the United States.”
Yet the bigger problem with drug importation is not logistics but safety. While bona fide Canadian drugs are surely safe, there’s just no way to ensure that drugs marketed as Canadian are actually Canadian. It’s easy for a supplier in, say, Turkey to set up a “Canadian” drug website and route its product through a Canadian address. Federal investigations have repeatedly found drugs that supposedly came from Canada really originated in other nations.
In 2005, the Food and Drug Administration found that nearly half of the imported drugs intercepted from four developing countries were marketed as “Canadian.” They found that the vast majority — some 85% — of “Canadian” drugs actually came from 27 other countries. Last year, Canadadrugs.com was fined $34 million by U.S. prosecutors for selling two cancer drugs with no active pharmaceutical ingredients.
The World Health Organization estimates that 1 in 10 drugs from developing countries are counterfeit. In 2018, the FDA found 3,600 websites selling illicit and counterfeit drugs.
According to Katherine Eban, author of “Bottle of Lies,” FDA investigators found fraud and deceptive practices in the vast majority of drug plants inspected in India and China, including bird and insect infestations and potential urine contamination.
Counterfeit concerns have only grown with the prevalence of fentanyl, just 500 micrograms of which is enough to cause an overdose. Law enforcement uncovered 130,000 counterfeit pillslaced with fentanyl in Alberta in 2016.
A compromised drug supply threatens the only thing more important to patients than cost: safety. This has led to a bipartisan consensus among recent FDA chiefs of both Republican and Democratic Administrations opposing Canadian drug imports. There’s “no effective way to ensure drugs coming from Canada really are coming from Canada rather than being routed from say a counterfeit factory in China,” says HHS chief Alex Azar.
So if not by importation, how can prescription drug prices be brought down? Drug distribution and supply channels must be reformed to allow for more competition to bring down prices as well as eliminate pricing distortions that thrive behind a veil of secrecy — what former FDA chief Scott Gottlieb has called “Kabuki” theater.
Yet to address these real drivers of prescription drug costs, policymakers must avoid using up their political capital on this distracting and dangerous importation delusion.
Holly Strom, a licensed pharmacist, is a former president of the California Board of Pharmacy and the founder of Strom and Associates LLC, a health care consulting practice.
Kenneth Schell, a licensed pharmacist, is former president of the California Board of Pharmacy.