Could China’s coronavirus outbreak hurt the global drug industry?

China, epicentre of the outbreak, is the world’s dominant maker of the building blocks of some of the most common drugs.

Beijing, China – “When you control the supply of medicines, you control the world.”

Those were the words of Rosemary Gibson, co-author of the book, China Rx: Exposing the Risks of America’s Dependence on China for Medicine, at a United States Congressional committee hearing last July in Washington, DC.

At that session of the US-China Economic and Security Review Commission, Gibson, who is also a senior adviser to the Hastings Center, a US-based bioethics research institute, laid out her concerns about what she described as “a really hidden and overlooked threat to our national health security, economic prosperity, and national security, and that is our dependence on China for medicine.”

The US Food and Drug Administration has contacted producers of about 20 drugs that either source all of their main ingredients from or are finished in China to gauge if they will face shortages due to the coronavirus outbreak.

Around 88 percent of the active pharmaceutical ingredients used in drugs for the US market were manufactured overseas in 2018, according to the FDA

China‘s attempts to limit the spread of a deadly viral outbreak have crippled factories that produce everything from cars and electronics to clothes and greetings cards. That, in turn, has reminded the rest of the world just how dependent it is on China as a source of components and finished products.

The impact of the coronavirus epidemic on companies ranging from chipmaker Foxconn to car firms such as Tesla and Hyundai has been the subject of intense scrutiny. But China’s pivotal role in the pharmaceutical industry – in particular the manufacture of cheaper generic drugs that have lost their patents – has largely gone unnoticed.

Its dominance of that segment of the industry is largely due to its commanding position in the production and export of so-called active pharmaceutical ingredients (APIs). These are the chemical building blocks for many crucial drugs, including penicillin, the painkiller ibuprofen and the popular diabetes drug acarbose.

Just how dominant it is, is a subject of some uncertainty because there is no reliable global register of APIs, according to an August report by Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations (CFR) in Washington, DC.

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