Many drugs that are sold in Germany come from China. Dealers are reporting possible delivery bottlenecks – as transport routes are interrupted due to the coronavirus outbreak.
In China, public life has come to a virtual standstill in many cities. Streets are empty, offices orphaned, factories stand still. This could also have implications for healthcare in many other countries. Because a large part of all active medical ingredients used worldwide now come from China.
According to experts, almost the entire global supply of some vital medicines depends on Chinese manufacturers – for example, antibiotics. The raw material for these products is now almost exclusively produced there and then partly processed in other countries – especially in India. After all, they end up in clinics and pharmacies around the world.
In January 2017, the management consultancy Roland Berger published a report on the "Safety of Antibiotic Supply". In it they describe how production has been systematically built up in China since the 1980s. In the meantime, the global production of antibiotics is dependent on a few manufacturers outside the EU.
Impending dependence on China
In Germany, the last large antibiotics factory in Frankfurt-Hochst stopped production at the beginning of 2017. The then managing director of the company, Dieter Kramer, spoke shortly before in an interview with the NDR of a ruinous competition with Chinese competitors. The factories there are much larger and can therefore produce much cheaper. This price war is the reason "that we are really one of the last competitors in the western hemisphere". A few weeks after the interview, his plant shut down.
At that time, Kramer had also warned of the impending dependence on China. If supply only depends on one country, various events could lead to interruptions in the supply chain, he said. These could be environmental problems, political decisions or the failure of means of transport.
Many transport routes interrupted
Now the Chinese government has interrupted many transport routes because of the coronavirus outbreak. Roadblocks have been set up all over the country. In addition, the holidays after the Chinese New Year were extended in many companies, and production was partially stopped or shut down. To what extent important pharmaceutical companies are also affected is currently difficult to say.
Only a few pharmaceutical manufacturers have their headquarters in the hardest-hit region around Wuhan. However, this week the authorities also severely restricted the freedom of movement of millions of people in Zhejiang Province. And it is from there that many medicines that are sold worldwide come from.
Production at the lowest level
What the current situation looks like in other parts of the country is unclear. The NDR asked some of the largest Chinese antibiotics manufacturers as an example, but received only limited information. The two state-owned companies NCPC and CSPC have announced that production will continue in their factories in the Hebei region, around 300 km southwest of Beijing.
In contrast, the governor of Inner Mongolia in northern China announced on its website that the United Laboratories plant there would be producing at the "lowest level" after the extended vacation on February 9th. The factory is by far the most important manufacturer of the basic material for all penicillins that are used worldwide. Other companies also say that production was partially stopped after the New Year celebrations. Some companies could not be reached either.
Dealers expect bottlenecks
At the moment, however, it cannot be foreseen whether the production downtimes will actually lead to supply problems. Pharmaceutical associations and manufacturers are currently quite cautious about the possible consequences.
However, many traders anticipate that there may be supply bottlenecks for some funds. This is shown in a survey by the Swiss pharmaceutical trading platform Kemiex. At the end of January, she asked almost 100 buyers, retailers and producers about the possible effects of the coronavirus epidemic. 85 percent of them expect there will be disruptions in some supply chains. Since then, the situation has tended to worsen due to the expansion of the quarantine measures.
Intransparent supply chains
You now have to see when and how production will start again, says the President of the European Chamber of Commerce in China, Dieter Wuttke. It is also unclear how many goods the companies have in stock and how they get the goods to the ports. "Well, the problem will probably only show up in weeks or months, but it will become noticeable at some point," says Wuttke. But he does not believe that there will be serious drug supply problems.
It is also difficult to say which means could possibly be affected because the supply chains in the pharmaceutical industry are completely opaque. Even the authorities in Germany do not know which substances from which factories are in which drugs. It is also unclear whether there are other manufacturers for the respective preparations. The Federal Ministry of Health announced last year that it would ensure more transparency here. But that has not happened so far.