UK ‘weeks away’ from medicine shortages if Iran war continues, experts say | Pharmaceuticals industry

According to experts, if the Iran war continues, there will be “a few weeks” of drug shortages in the UK, from painkillers to cancer treatments, while drug prices may also rise.

The conflict has disrupted the supply of many important raw materials, including oil, gas, crop fertilizer and helium; The next step may be health basic needs.

David Weeks, Texas-based director of supply chain risk management at Moody’s analysis group, said: “It’s the perfect storm. There’s a conflict in the Gulf that’s closing the Strait of Hormuz, and India is known as the pharmacy of the world. They make a lot of generic drugs.” [off-patent] drugs and APIs [active pharmaceutical ingredients]. “It is becoming increasingly difficult to get them out due to the geopolitical situation.”

With airports in Dubai, Doha and Abu Dhabi initially closed and now operating on a limited schedule, pharmaceutical companies have been forced to reroute their shipments by air, and some are now relying on sea transport, extending journey times.

Shipping, the main route for most medicines, is also under pressure due to the near-total closure of the Strait of Hormuz.

“We’re not in a crisis at the moment, but the situation is still serious,” said Mark Samuels, chief executive of Medicines UK, which represents manufacturers of cheap, off-patent drugs known as generics, which make up 85% of medicines used by the NHS.

If the conflict continues, he said, medicine shortages could occur in just a few weeks. Medical distributors typically stock six to eight weeks of inventory to prevent shortages; Suppliers to hospitals in England must hold for an eight-week period.

Paracetamol and other painkillers were in short supply in Britain and elsewhere during the Covid outbreak as drugmakers in India, which produces 60% of generic drugs used globally and half of US requirements, struggled to keep up with demand.

The UK produces around half of its medicines domestically, with a third coming from India and some from the EU.

The US-Israeli war against Iran has doubled air transportation costs. “One in five NHS medicines arrive by air and manufacturers are currently struggling to cover these costs,” Samuels said. “But they have historically low margins and the risk of this is that it will cause damage to the supply of some medicines to the NHS.”

Although suppliers have long-term pricing agreements with NHS hospitals, they have leeway to increase prices on medicines supplied to GP surgeries and pharmacies.

Wouter Dewulf, a professor at the Antwerp School of Management and an expert in pharmaceutical logistics, said drug supplies were “not disrupted, but disrupted” for now. If the situation worsens, he expects drugmakers to pass on higher costs through single-digit price increases. “It all depends on how long the war lasts,” he added.

Frank Van Gelder, healthcare and pharmaceutical supply chain strategist and general secretary of the non-profit group Pharma.Aero, said the disruption in the Middle East airspace corridor had hit the pharmaceutical industry hard due to its reliance on frequent flights. Before the war, approximately 3,700 passenger planes, including cargo, were transiting through the region’s airports every day.

He said air cargo levels dropped 80% earlier this month and are still falling sharply.

Some medications need to be transported by air to be rapid; for example: expensive treatments for cancer and infectious diseases; high-tech cell and gene therapies; biologicals with living material requiring cold storage; and drugs used in clinical trials.

Dewulf noted that healthcare cargo will always be prioritized over goods coming from e-commerce. Transport by sea is an alternative to stable, generic medicines, but ships have to go around the Cape of Good Hope, adding 14 days to the journey and another $1 million (£750,000) in fuel costs.

The increase in crude oil and natural gas prices, in addition to increasing transportation costs, also affects the cost of syringes, vials, tubes, gowns and goggles, as well as petrochemical products such as methanol and ethylene, which are necessary for the production of APIs, which are key components of drugs.

“So the overall ripple effect on the industry, and in this case the life sciences and pharmaceutical industry, is significant,” Van Gelder said, asking the question: “Who is going to pay for this?” He said it would be the patient who would ultimately pick up the tab, either directly or through public health systems such as the NHS, which are ultimately funded by taxpayers. “So ultimately we all pay more, right?”