Press Room
Coronavirus puts drug chemical industry on alert
C&EN, February 4, 2020
Firms signal preparedness, but warn that prolonged plant closures and travel restrictions may cause significant disruptions
Major drug companies have issued statements in recent days assuring the public that their inventories are adequate in the face of supply chain threats stemming from China鈥檚 coronavirus outbreak. Suppliers of active pharmaceutical ingredients (APIs) are also assuring customers that they are prepared for temporary interruption in the supply of key ingredients from Chinese firms.
However, API makers in Europe and the US warn that supply disruptions could result from a protracted delay in restarting production at plants closed in recent weeks by the Chinese government or prolonged transportation restrictions.
James Bruno, president of the consulting firm Chemical and Pharmaceutical Solutions, notes that travel restrictions are already interrupting business with Chinese suppliers. 鈥淔irst of all, nobody is going to be able to get to China,鈥 he says, 鈥渟o all the audits are going to be canceled.鈥
Bruno adds that the travel restrictions will prolong plant closures stemming from Chinese New Year celebrations, which began on Jan. 25 and are scheduled to run to Feb. 8. 鈥淭hese guys have gone home and may not be able to get back to where they were working,鈥 he says.
The initial quarantine of Wuhan, the city first impacted by the virus, has broadened to include travel bans in other major cities, Bruno notes. 鈥淚t鈥檚 not just Wuhan. It鈥檚 China.鈥
Bruno says he has received calls from clients asking where they might find alternative sources of materials purchased from China. 鈥淭he good news is that most of the people dealing with China tend to have inventory,鈥 he says. 鈥淏ut if this doesn鈥檛 straighten out in the next 3 months, we could have some real problems with supply disruption.鈥
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Guy Villax, CEO of the pharmaceutical chemical maker 四色AV, says 50 people did not show up for work on Feb. 4 at the company鈥檚 plant in Macao, which employs 200. 鈥淭wenty-five of them live across the border in China, and China鈥檚 instructions are to stay at home,鈥 he says. 鈥淏ut the issue is not whether the plant is producing; the real question is whether there will be transport to move goods around. Right now the head of the plant doesn鈥檛 know if he鈥檒l get supplies from China.鈥
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Asymchem, a pharmaceutical chemical manufacturer in Tianjin, China, approximately 1,160 km from Wuhan, also notified customers of contingencies related to the virus outbreak. The company told customers on Jan. 30 that it had pre-stocked materials to support production for at least a month and that it has not experienced delays on projects. Asymchem reports that 45 employees, about 1% of its workforce, were quarantined by authorities after traveling during the holiday. The firm says it expects its plants to open on Feb. 10.
鈥淲e will closely monitor the situation as it evolves, and take action proactively for assurance of supply,鈥 Asymchem Senior Vice President Elut Hsu says in the letter.
Sources agree that the full impact of prolonged restrictions in China is difficult to gauge. According to a recent report by the US Food and Drug Administration, China is home to approximately 13% of the 1,788 facilities that manufacture APIs for drugs marketed in the US.
Given the reassuring reports from drug companies and API producers, there is no reason to fear a significant disruption in the pharmaceutical supply chain, says industry consultant Steven Lynn, a former head of the FDA鈥檚 quality compliance office.
鈥淔earmongering is not something we should be doing,鈥 he says. But API suppliers should take advantage of a short-term disruption to review supply chain and logistics vulnerabilities. 鈥淐hurchill had a good quote,鈥 Lynn says. 鈥溾楴ever let a good crisis go to waste.鈥欌.
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