It is reasonable to wonder if we, particularly the DOH, learned anything from the pandemic. COVID-19 caught the DOH totally unprepared in terms of supplies including basic PPE, masks, gloves, etc. That opened the floodgates for folks like Duterte’s favored supplier, Pharmally, to take advantage and make exorbitant profits because our situation was desperate.
International shortages of essential prescription drugs pose the same problems. Indeed, we do not even need an epidemic to find ourselves in trouble due to a shortage of, for example, basic antibiotics.
Today’s turbulent world trade situation has seen China weaponize its dominance in rare earths. China can do the same thing for antibiotics and other essential pharmaceuticals.
CNN reports that China is responsible for producing 80 percent of the world’s raw materials for amoxicillin, the most widely prescribed antibiotic for treating bacterial infections including pneumonia and strep throat.
Amoxicillin has also been in chronic short supply. If push comes to shove, China could use its dominance over this life-saving antibiotic to further their political or economic whims, leaving the world vulnerable to a bacterial epidemic.
China also controls hydrocortisone (the active ingredient in the anti-itch cream), ibuprofen (found in common over-the-counter pain relievers) and acetaminophen (in other kinds of pain relievers).
Leland Miller, a commissioner at the US-China Economic and Security Review Commission, told CNN the “chokepoints” that China holds over the US pharmaceutical supply are “detrimental to American security.”
“Simply by having this leverage … whether or not they ever pull the trigger, causes us to change our policy positions on a lot of things, and that’s not good,” he said.
If the Americans are vulnerable to China on drug supply, one can imagine how bad our situation is, given problems in the West Philippine Sea. Yet, we haven’t heard our policy makers, especially those responsible for national security, recognize this and offer ways of protecting ourselves.
China and India dominate the global manufacturing capacity for the active pharmaceutical ingredients or APIs, needed to manufacture prescription drugs. Most local prescription drug manufacturers rely on these countries for key active ingredients. Only a few raw materials (e.g., herbal extracts, sugar, alcohol) are produced locally.
Even India, the world’s top supplier of generics, relies on China for APIs and other key ingredients. In fact, 70 percent of India’s API imports come from China, according to a 2023 report commissioned by the Indian government.
Generic drugs, which provide the same therapeutic effects as brand-name ones, account for 90 percent of all prescriptions in the US. India produces many of those generics, often from ingredients imported from China.
For us, United Laboratories or Unilab is the largest local drug manufacturer that also has facilities in Indonesia. It operates a vast manufacturing and distribution network — and sells both branded and generic products through RiteMED and Pharex.
The Asian Antibiotics facility within Unilab’s manufacturing network produces antibiotic and steroid preparations in various formats — solid, liquid, parenteral — following accepted international manufacturing standards. These antibiotic packs — like amoxicillin compliance kits — are produced locally and marketed regionally.
But like many pharma firms, Unilab relies on global suppliers, mainly in China, India, the EU and Israel, for APIs and excipients that comply with international standards.
Producing APIs locally is not possible because we lack economies of scale to justify high investment costs. We also have problems with inadequate infrastructure and stringent regulatory requirements as well as bureaucratic red tape.
The heavy (90 percent) reliance of modern medicines on APIs sourced from India and China should be seen as a national security vulnerability. The risk of geopolitical disruption is very clear.
Pandemics, trade conflicts or political tensions (tariffs, export bans) can suddenly cut off supplies. During COVID-19, India blocked key drug exports. Export restrictions that China and India may impose during a crisis can seriously destabilize global drug availability.
Even a world power like the US has been facing chronic shortages of generic drugs and essential APIs for over a decade, with experts calling it an existential crisis.
But the US is now considering security of drug supply as part of its defense readiness. The US has begun stockpiling APIs, invoking the Defense Production Act to secure supply in emergencies.
The US has also put up a Strategic National Stockpile (SNS) initially established in 1999 (then called the National Pharmaceutical Stockpile), that holds a broad range of emergency medicines — antibiotics, vaccines, chemical antidotes, antitoxins and more.
A key program within SNS is Project BioShield, which includes stockpiles of anthrax antitoxins, botulism antitoxin and millions of doses of the smallpox and anthrax vaccines.
EU countries are reinforcing drug supply-chain resilience with early-warning systems and stockpile strategies.
Unfortunately for us, it is business as usual at DOH after the pandemic, which means bahala na. Our readiness to respond to any epidemic has always been in a sorry state. DOH can’t even properly manage its limited stock of medicines, causing it to dump billions of pesos worth of expired stock yearly.
In its 2022 audit, COA flagged P7.43 billion in expired, near-expiry, damaged, undistributed or overstocked inventory. Some P2.3 million worth of drugs had actually expired; the rest were slow-moving or faced logistic issues.
So, it may be useless to depend on DOH to plan and manage a strategic stockpile of essential drugs. It may be better to ask the manufacturers like Unilab, Pascual Labs and Interphil, among others, to undertake the storage of essential APIs with the government picking up relevant carrying costs.
The conversation must begin on determining what drugs are essential for us to have in a strategic stockpile. Then, our manufacturers must diversify sources for their API needs. We must be alert in our increasingly troubled world.
Bahala na, the favorite stance of our bureaucrats, will kill people who could have been saved if health officials and the private pharma sector planned ahead.
Boo Chanco’s email address is bchanco@gmail.com. Follow him on X @boochanco