COVID-19 disruptions on health supply chains a challenge for aid orgs

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Employees work on a production line for surgical masks at a factory in Nantong, Jiangsu province, China. Photo by: China Daily via Reuters

MANILA — The European Commission has implemented export restrictions on personal protective equipment outside the European Union on Sunday, March 15, valid for six weeks. Export of this equipment, which includes masks, visors, face shields, and protective garments, outside the EU are subject to member state authorization.

The latest restriction adds another challenge for aid organizations that have already raised concerns about the growing shortage of PPE supplies due to increased demand globally and panic buying.

“Let's say on average there are 18 million containers in the world … at this time, most of the containers are completely stuck in China.”

—  Maarten Neve, director of wholesale, the IDA Foundation

Lucica Ditiu, executive director at the Stop TB Partnership, said discussions are ongoing with the German government, which banned the export of PPEs in early March, on providing exemptions for humanitarian agencies.

The U.N. Population Fund meanwhile has issued approvals for all of its country offices to procure PPEs locally and is studying the overall market status for these items to secure “a maximum level of stock” for UNFPA’s programs and partners.

“The locally procured PPE is to protect ours and our partners' health workers who are exposed to the virus in the course of their work, so they can treat and support women, girls and the elderly who could be carriers, or suspected carriers of the virus,” according to representatives of UNFPA’s procurement and humanitarian teams.

Factory shutdowns, and travel and export bans due to the novel coronavirus outbreak have put some constraints on the procurement of health products and medicines.

The COVID-19 outbreak, first detected in Wuhan, China, in December, has since been classified by the World Health Organization as a pandemic, has affected 143 countries and territories, with 153,517 confirmed cases and 5,735 deaths worldwide as of March 15. The crisis has significantly limited travel and trade, with airlines forced to cancel trips and ground the majority of planes as countries impose travel restrictions in efforts to halt or slow the spread of the virus.

The shutdown of businesses and factories in China — a major manufacturing hub — in the past two months as the country grapples to contain the outbreak, have also caused delays in production and shipment of goods in different industries. It has raised concerns about potential shortages of health products and essential medicines such as for HIV, tuberculosis, and malaria, and even cancer drugs and antibiotics.

India, a major hub for the manufacture of generic medicines, is highly dependent on API supplies from China. Indian pharmaceutical companies procure almost 70% of its APIs from China, according to a recent The Lancet article.

In its latest assessment dated March 12, the Global Fund to Fight AIDS, Tuberculosis and Malaria has classified the overall impact of COVID-19 on health product supply chains as “low to moderate.”

The assessment follows the resumption of production of API manufacturers in China, and other key companies for pharmaceutical products including antiretroviral drugs, and malaria and TB medicines. But it also acknowledges some emerging logistical challenges in producing APIs, which may have an impact on the production of these medicines.

The fund also identified interruptions in the production of long-lasting insecticidal nets due to closed production sites, and raised the need to find alternative sources for raw materials.

“We continue to closely monitor the situation and are working with the U.S. President’s Malaria Initiative (PMI) to anticipate demand for pyrethroid-PBO nets,” according to the fund.

The Against Malaria Foundation, a U.K.-based charity that purchases and distributes long-lasting insecticide-treated nets through partners in lower-income countries, noted in a Feb. 27 update on its website that the COVID-19 outbreak “has had some, but currently only a moderate, effect on bednet production estimated to be one month but, given planning margins, distribution dates are not affected.”

Two of its manufacturers were initially forced to shut down manufacturing plants but have since restarted work.

As The Global Fund continues to assess and address COVID-19-related procurement and supply chain risks, it has recommended that its implementing partners add 30 days lead time in the recommended procurement of health products “to better manage any disturbances that may emerge in being able to deliver products on time.”

The Global Fund recommended lead time for the procurement of HIV and malaria products varies between 150 days, 180 days, and 210 days. But some, such as long-lasting piperonyl butoxide-treated insecticidal nets, require a longer period of 310 days.

Logistical challenges

The IDA Foundation, a social enterprise based in Amsterdam that procures medicine and medical goods — mostly from China and India — for health organizations worldwide, told Devex it is monitoring the situation closely and working with freight forwarders to monitor developments and discuss contingency plans.

The situation has not yet affected the foundation’s stock levels to date, and it has also looked into its suppliers outside China and India, such as in Europe, United States, and Africa, as “back-up to guarantee access to these essential medicines.” But it faces some challenges in logistics and the changing or limited availability of health products.

“The latest updates we have for China are that production has restarted in most facilities after a period of almost 6 weeks. As they restart, freight forwarders indicate that capacity is still limited and this can potentially cause delays of 0-6 weeks to our inbound shipments,” said Maarten Neve, director of wholesale at the IDA Foundation.

“A few things are happening at the same time. You have shipping lines equipment [such as] the containers ... impacted by the pandemic. Let's say on average there are 18 million containers in the world … [and] one container rotates more or less 10 times per year on average. At this time, most of the containers are completely stuck in China.

“So actually there's a shortage in Europe for outgoing containers. On the other hand, now production is commencing in China. But that means that way larger volumes than usual will be shipped out. So [there’s] kind of a congestion also or expected congestion, at least, in some of the Chinese ports,” he explained.

There’s also a lengthy process presently in getting clearance for certain medicines from India, after the government placed restrictions on exports of some medicines such as paracetamol; antibiotics such as tinidazole, metronidazole, chloramphenicol, erythromycin, and neomycin; antiviral acyclovir; vitamins B1, B6, and B12; and hormone therapy medication progesterone.

The restrictions were driven by fears of shortages of medicines and raw materials in the production of these drugs from China.

Neve said the clearance process usually takes hours or a day, but can now take up weeks. However, he said, “I think it will only affect the lead time rather than the availability or the amount to be exported.”

In some countries where the IDA Foundation ships to, such as Congo and the Democratic Republic of the Congo, delays can also be expected as countries place restrictions on visitors, including a quarantine period of 14 days.

Long-term impact

Health organizations Devex has spoken to said they so far have enough stocks in place, but it’s unclear how this will play out if the outbreak continues.

Stop TB’s Ditiu said the organization has not had any shortages so far. Its global drug facility team has been monitoring the situation since January 2020.

Médecins Sans Frontières, which operates in emergency situations, said it’s been collecting information from manufacturers and suppliers on whether they’re having production and shipping delays that could affect the delivery of health products. But the organization has not heard any shortages in its supply of health products too, said Isabel Lucas Manzano, international pharmacist coordinator at MSF.

UNFPA also told Devex that the outbreak “has not caused too much disruption” in the procurement and delivery of the contraceptives and medicines it uses for its programs, as most of its supplies are outside China. Although UNFPA’s procurement and humanitarian teams did say that China is a major manufacturer of medical and IT equipment, and so purchasing new medical and IT equipment “has been disrupted.”

In a statement shared with Devex, Thomas Cueni, director-general of the International Federation of Pharmaceutical Manufacturers and Associations, said the organization is actively engaging with its member companies and associations in Africa and Asia, and is not aware of any “near-term impacts” of the outbreak on the availability of medicines and vaccines.

“The companies are telling us that they are working hard to prevent and mitigate potential shortages of medicines necessary to both treat the symptoms of COVID-19, as well as supplying the medicines and vaccines that normally underpin treatment across the health care sector including for vulnerable populations,” he said.

“The companies are continuously monitoring and proactively handling the situation as it’s developing. They do not expect any long-term impact on the availability of medicines and vaccines, unless disruption due to the novel coronavirus outbreak is sustained over the next several months,” he added.

Last week, the Asian Development Bank said it will make available $200 million for companies in Asia and the Pacific manufacturing and distributing medicines, and other critical items such as personal protective equipment, to address the COVID-19 outbreak.

About the author

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.