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Hubei vs. Covid-19: An In-Depth Focus on Expected Pharmaceutical Supply Chain Disruptions & Drug Shortages

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Make no mistake. While outwardly showing signs of restrain, pharmaceutical companies have spent substantial financial and strategic resources on risk-assessments over how the coronavirus epidemic (Covid-19) will affect the global supply chain. And the boardroom is likely to remain busy. News articles and op-ed, ranging from downright pessimistic to cautiously optimistic, have been published since early January on the global impact of the disrupted Chinese supply towards active pharmaceutical ingredients (APIs) and finished dosage formulations (FDFs).

However, risk and exposure are wider and deeper than what appears on the surface, since Chinese factories not only produce APIs and FDFs, but also pharmaceutical-related ingredients such as key pharma intermediates, starting materials, fine chemicals and basic raw materials. According to recent publications, various regulatory agencies, including the FDA, EMA and others, are bracing for drug supply shortages, as the Covid-19 outbreak in China continues to unfold.

There is no ready-made formula to quantify the impact of the Covid-19 epidemic to the supply chain of the Pharmaceutical industry. By now, it is apparent that overall availability and pricing of certain drug products will suffer, the more reliant they are on factors affecting the Chinese pharma supply chain. According to a recent article in the Financial Times, India, who has become the world’s largest exporter of generic drugs, depends on China for 70% of its raw pharmaceutical materials. Recent publications suggest that the Indian government has decided to impose export restrictions for 12 essential bulk drugs and the formulations made by them, including commonly used antibiotics such as chloramphenicol, neomycin, erythromycin salts, acyclovir, metronidazole, tinidazole, ornidazole, clindamycin salts, female hormone progesterone and range of vitamins such as B1, B6 and B12

Thus, it would be tough to underestimate the impact that Covid-19 will have also on western pharmaceutical markets, such as the US and Europe, who are heavily reliant on the exports of Chinese pharmaceutical ingredients, which are key components in many generic and innovative drug products supplied throughout western markets.

In this article, I took a closer look at several pharmaceutical factories, located in Hubei province, who manufacture and export their APIs to the largest regulated markets, such as the US and Europe. Wuhan, the capital city of Hubei province, is where the outbreak of coronavirus originated. Hubei province is still largely on lockdown and citizens are ordered to stay home while businesses have ceased operation, according to a recent Newsweek article. While few Hubei-based pharmaceutical factories produce FDF exported to western countries, a sizeable amount of API producers are at risk. A different report recently published by Globaldata focused on pharmaceutical CMOs in Hubei province and the expected effect on international drug companies. According to the WHO, about 74% of Covid-19 infections diagnosed in China are in Hubei province as of February 8, 2020.

A map of main cities in Hubei province:

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The below table identifies factories located in Hubei province who export their APIs to US and Western European markets:

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The key to understanding which APIs are being exported by each of these factories is by checking their active drug master file (DMF) filed with the FDA and certificate of suitability (COS) filings with the European EDQM. See the below list of APIs for each factory, with active DMFs and COSs listed. I have also included the last dates of inspection by the FDA and NMPA, the Chinese drug authority.

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According to the volumes of filed DMFs and COSs, there are 4 main factories in Hubei province who export their APIs to the US market. In order to identify their main export products, it was necessary to expand on each one of them separately.

  • Hubei Biocause Pharmaceutical Co Ltd from Jingmen city and Wuhan Biocause Pharmaceutical Development Co Ltd from Wuhan city (otherwise known as Hubei Biocause Heilen Pharmaceutical Co., Ltd) from the Hubei Biocause Pharmaceutical Co group.

See below table for their active DMFs filed in the US and valid COSs filed in Europe:

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According to company publications, Hubei Biocause is the largest company in China for production of Ibuprofen, one of the top 3 in the world, and is supplying their APIs to large multinational pharmaceutical companies such as GSK, Sanofi, Pfizer, Mylan and others. According to a recently published article in Breitbart, last year, manufacturing of intermediate or finished goods in China, as well as pharmaceutical source material, accounted for 95 percent of US imports of Ibuprofen.

The Hubei-based Biocause factories also manufacture several plant-based alkaloid APIs, such as Atropine Sulfate, Homatropine Methylbromide and Hyoscyamine Sulfate. Due to the limited number of other API producers who produce these plant-based ingredients coupled with the extra demands that they will face due to the general shutdown in Hubei province, the overall availability of these drug substances is expected to be impacted.

  • Hubei Gedian Humanwell Pharmaceutical Co Ltd (Ezhou city), Yichang Humanwell Pharmaceutical Co Ltd (Yichang city) and Yichang Sanxia Pharmaceutical Co Ltd (Yichang City) are part of the Wuhan Humanwell Healthcare Group Co Ltd.

See below table for their active DMFs filed in the US and valid COSs filed in Europe:

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As can be noted from the above table, the 3 Humanwell group factories specialize in different types of API categories.

  1. Hubei Gedian Humanwell Pharmaceutical Co Ltd is a large scale steroid and hormone API manufacturer, focusing on manufacturing of several key drug substances such as Progesterone, Finasteride and Dutasteride.
  2. Yichang Humanwell Pharmaceutical Co Ltd produces narcotic and psychotropic APIs, primarily used for injectable anesthetics, controlled substances such as Fentanyl Citrate, Hydromorphone HCl and Remifentanil HCl.
  3. Yichang Sanxia Pharmaceutical Co Ltd focuses on large bulk manufacturing of their key API, Neomycin Sulfate, an antibiotic used as a prescription drug to reduce the risk of infection during surgery of the bowel, but more commonly used under OTC in the triple antibiotic ointment (known as Neosporin) that contains Neomycin, Polymyxin B and Bacitracin, a medication used to try to decrease the risk of infections following minor skin injuries and to treat superficial bacterial eye infections.

It is important to note that the Hubei-based Humanwell group has a number of subsidiaries and affiliates in regulated markets. In USA, the Humanwell group has certain tie-up relationships with the following companies:

  1. Humanwell Puracap, based in Piscataway NJ, who are a US developer and distributor of generic medications, particularly in soft-gelatin capsules dosage form, which are produced at Humanwell Puracap Pharmaceuticals (Wuhan) Co., Ltd factory in Hubei province.
  2. Another tie up in US market is between the Chinese Humanwell group and Epic Pharma, a developer, manufacturer and marketer of generic pharma medications. Similar to US-based Puracap, in addition to their own US-based FDF manufacturing located in Laurelton NY, Epic Pharma also distributes several medications that are produced at the same Humanwell Puracap factory in Hubei, China such as Dutasteride capsules and Benzonatate capsules.
  3. An additional Humanwell tie-up in US market is with The Ritedose Corporation, based in Columbia SC, a contract development manufacturer with a focus on inhalation and ophthalmic products.

Hubei Haosun Pharmaceutical Co Ltd (Ezhou city) is owned by Shenzhen-based HaoRui Enterprises Limited. See below table for their active DMFs filed in the US and valid COSs filed in Europe:

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Hubei Haosun focuses on manufacturing oncology/antineoplastic APIs to treat various types of cancer. Their main exports include several plant-based drug substances such as Docetaxel and Irinotecan as well as others such as Temozolomide, Dasatinib, and Oxaliplatin.

It is noteworthy to point out that Hubei Haosun produces and exports to regulated markets a couple of APIs that are same ones as the aforementioned Wuhan Biocause factory, namely Flumazenil and Granisetron Base & Hydrochloride form. The combination of both Hubei-based API factories not being able to supply these two APIs may create a particularly heavy impact on global supply which could lead to lengthy shortages in the upcoming future.

  • Yichang HEC Pharma Co Ltd (Yidu city) from the HEC Pharm Group is the largest Hubei-based API exporter, in terms of numbers of exported products. API aside, the HEC Pharm group is also actively engaged in manufacturing and exporting FDF to the US as well as several western European markets as well.

See below table for their active DMFs filed in the US and valid COSs filed in Europe:

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As can be seen from the above list, Yichang HEC focuses on manufacturing APIs from a wide range of therapeutic categories, including anti-virus, endocrine, metabolic and cardiovascular diseases. Yichang HEC is especially strong in the manufacturing of Macrolide APIs such as Azithromycin, Clarithromycin, Clindamycin, Erythromycin and Lincomycin. According to the company website, their client list includes global corporations such as Pfizer and Abbott Laboratories.

The FDF arm of the HEC Pharm Group, formerly known as Yichang Changjiang Pharmaceutical Company Limited, manufactures and exports generic finished dosage form to many regulated markets, including EU and US. This includes the following product list, taken from the company website:

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The FDA Orange Book shows several generic Rx ANDAs that are produced at the Hubei plant and actively marketed by the HEC Pharm group in US market, including:

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In conclusion, it is time to keep a closer eye on the exports – or lack-thereof – of APIs and FDFs from Hubei province to global regulated markets in order to try to mitigate the risks of shortages especially towards certain key APIs and essential FDF medications.

Hubei is certainly not the only Chinese province affected by Covid-19 as its neighboring provinces have also been severely affected. While in surrounding Chinese provinces there has been a gradual decline in new cases reported in the first two weeks of February,  the situation on the ground in Hubei, where Covid-19 originated, remains caustic. Since the future return to the routine schedule in Hubei province is expected to take considerably longer than in other places, hence the disruption to the pharmaceutical supply chain is expected to be deeper and longer than originally anticipated.

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