With the Covid pandemic shining the spotlight on gaps in Australia’s pharmaceutical supply chain, a logistics and economics think-tank is calling on the government to compel drug manufacturers to disclose the country of origin of all active pharmaceutical ingredients (API) in their products.
Logistics expert, John Blackburn, Chair of the Institute of Integrated Economics Research Australia, says it is impossible to identify and close gaps in the pharmaceutical supply chain without first knowing where each link in the chain originates.
He’s calling on the Australian government to, “Require drug companies to list APIs and their countries of origin on labels of imported and domestically produced finished drug products.”
Its estimated that currently, over 90 per cent of America’s pharmaceuticals come from manufacturers in China and India. However it’s believed many Indian manufacturers source some API supplies from China, giving China a near monopoly on global pharmaceutical supply. Exact figures and percentages are not known as most large commercial drug manufacturers do not disclose the source of their raw ingredients, claiming the information is commercial in confidence.
This is significant for Australia as this country imports over 90 per cent of pharmaceuticals, mostly from the U.S.
A white paper released by the Institute urges the government to move towards less reliance on overseas suppliers, especially one-source suppliers, of medical products, equipment and PPE.
“…alarm bells should be sounding about vulnerable and opaque supply chains which have single points of failure. Any supply chain that relies on only one point of manufacture of critical products is vulnerable – regardless of where that single point of supply is located. “
The paper points out that if a debilitating natural disaster, pandemic, or a situation of political instability occurs in the only region on the planet producing key API’s, the world could be faced with a serious global health crisis.
The white paper also highlight’s the difficulty the U.S., government’s Federal Drug Administration (FDA) has had in trying to identify who is producing the API’s in the world’s pharmaceuticals, and where the manufacturing facilities are located.
“Supply chains are not understood, vulnerabilities are not fully understood, no one agency seems to have responsibility or accountability.”
“The bottom line is we’re going to have to increase our pharmaceutical industry sector in this country, all the way from pharmaceutical ingredients to manufacture.” Blackburn told ABC radio’s World Today program.
“Now is the time to prioritise how we could be more self sufficient .We should develop smaller, localised, more trusted supply chains.”