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Supply chain concerns resurface following surge in China's COVID-19 cases

by John R. Fischer, Senior Reporter | January 19, 2023
Business Affairs
Surging cases of COVID-19 in China have healthcare experts worried about potential supply chain shortages in the coming months.
After lifting COVID-19 restrictions last month, infections in China have surged, spreading worry within the U.S. healthcare industry about the potential for supply chain shortages in the coming months.

Healthcare experts say that any cuts in supplies could exacerbate existing shortages in the U.S., such as with pediatric medications or contrast media, a shortage that started early last year following the shutdown of GE Healthcare's Shanghai facility during COVID-19 lockdowns, limiting access to medical scans globally.

They say that providers and healthcare companies could potentially see shortages in generic drugs, such as antibiotics and blood thinners, and electronic components for advanced medical devices, according to NBC News.

“One major concern throughout the entire pandemic has been that because of China’s zero-COVID policy, shutdowns greatly reduced manufacturing capacity in China. This is obviously that type of activity on steroids,” Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, told NBC News.

Over 25% of facilities that supply the U.S. with ingredients for blood thinners are based in China, as are nearly 20% that make a type of anesthetic for it, reported NBC News. Other countries that supply the U.S. with drugs, such as India and those in Europe, depend on China for the majority of ingredients that go into them.

Supply chain shortages during the first wave of COVID-19 cases in China in 2020 motivated hospitals, healthcare companies and federal officials to reduce their dependence on the country, but costs, complexity and regulations in healthcare manufacturing have made this difficult. China has also stopped releasing official death and infection tallies, making it hard for companies to determine if they will experience disruptions.

The Biden administration has also taken action to improve the country’s domestic medical supply chain, stockpiling items and coordinating with federal agencies to monitor supply chain.

“At this point, we haven’t detected any current or likely disruptions, at least to the flow of drugs or devices or supplies of PPE [personal protective equipment] to the United States, given what’s going on in China," said an unnamed administration official.

But healthcare executives and supply chain analysts say the latest wave may only start to be felt in the coming months, depending on the trajectory of the pandemic.

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