Eli Lilly & Co. Zepbound Injection Pen, March 28, 2024.
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Like one The port strike stretched from New England to Texas has halted nearly half of all trade into the US, customs data shows critical medical devices and drug ingredients for exploding, expensive weight loss and diabetes drugs from Novo Nordisk and Eli Lilly — Ozempic, Wegovy, Mounjaro and Zepbound — are among the trade victims of the ILA union’s shutdown at the port.
Bills of lading, digital receipts of shipping containers, show how the distribution mechanism for insulin and diet pills depends on East Coast ports for trade.
“Novo Nordisk and Eli Lilly are both heavily dependent on the Port of Norfolk,” said William George, director of research at ImportGenius, which tracks customs data.
Novo Nordisk According to George, 419 20-foot equivalent (TEU) pharmaceutical containers were imported through Norfolk over the past year and the injection devices contained semaglutide, a compound in branded weight-loss drugs. “Novo’s best syringes commonly used for insulin injections are also shipped into the US by sea,” he said.
Novo Nordisk has pulled in nearly $50 billion in revenue from Wegovy and Ozempic, with the majority of that revenue coming from the US, the company’s CEO said in recent testimony before the US Senate.
A Novo Nordisk spokesperson said in an email to CNBC that the company has mitigation plans in place to minimize or prevent any production disruptions due to potential seaport strikes. “We plan to ship our products to and from the US via air,” the spokesperson said.
Vials on the Wegovy line at the Novo Nordisk A/S production facility in Hillerod, Denmark, on Friday, March 8, 2024.
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ONE Eli Lilly The spokesperson said it does not discuss details of its relationships with outside vendors.
Dennis Monts, PayCargo’s global chief commercial officer, said airline volumes strengthened in September, peaking about two weeks ago. “We are watching the numbers for October predicting an increase in air freight for fast-moving and perishable items such as produce, seafood, medical supplies and inventory,” Monts said. other instant warehouse”.
Some drug shipments are labeled “high value pharmaceuticals” and “low value pharmaceuticals”.
Other shipments identified active pharmaceutical ingredients (APIs) used in the US to make weight-loss drugs, as well as disposable syringes and needles.
CEO Noushin Shamsili and President of Nuco Logistics, which specializes in importing and exporting pharmaceuticals, told CNBC on Monday that the strike comes at a critical time to replenish inventories for the pharmaceutical industry. “Almost all of this industry is punctual,” Shamsili said. “Raw materials are being brought in to complete the drug manufacturing process.”
About 48% of active pharmaceutical ingredients (APIs) used in the US are imported from India. Without these APIs, drugs cannot be produced. API is also manufactured in Europe, which also uses East Coast ports as entry points into the United States.
Some of these APIs are key ingredients needed to produce blockbuster weight loss drugs.
“ILA attacks on East Coast and Gulf Coast ports could impact the import and distribution of drugs like Ozempic,” Shamsili said. “Potential impacts of the strike include supply chain disruptions, increased transportation costs, API inventory shortages and production delays.”
Eli Lilly, who produces Mounjaro and Zepboundhas been expand production facilities in America as well as in Irelandbut imports some APIs from Swiss manufacturer Corden Pharma, to produce tirzepatide for this branded drug. Novo Nordisk imports some APIs for weight loss drugs to Ozempic and Wegovy. The API used for both Ozempic and Wegovy is semaglutide.
East Coast and Gulf Coast ports pose a risk to medical supplies
Risks to overall medical supplies are being monitored by the Biden administration and state governments, such as New York.
On Monday, Biden administration leadership at the Department of Health and Human Services met with trade associations, distributors, manufacturers and other stakeholders to assess vulnerabilities and impacts of supply chain.
“Current preliminary assessments suggest that the immediate impact of drugs, medical devices, and infant formula on consumers, parents, and caregivers should be limited,” the administration said. said in a statement. “The Administration is taking action to monitor and address potential impacts to consumers from labor disputes at East Coast and Gulf Coast ports.”
In addition to HHS, the Food and Drug Administration and the Administration for Strategic Preparedness and Response (ASPR) have reached out to trade associations, distributors, and manufacturers to limit the impact to consumers and assess vulnerabilities.
Shamsili said East Coast ports are also gateways for generic drugs made in India.
Complicating matters for the healthcare industry’s supply chain is the ripple effect of Hurricane Helene.
Mirko Woitzik, director of intelligence solutions at Everstream Analytics, said Baxter International had a critical facility in North Cove, North Carolina, that was damaged. That facility produces IV fluids that supply 60% of the U.S. market, including hospitals. The facility is also the largest provider of intravenous and peritoneal dialysis solutions in the United States.
“The US just overcame a general shortage of IV fluids that has persisted since 2014 due to production issues, recalls and higher demand due to Covid-19,” Woitzik said. “In 2023, the US FDA still lists 55 shortages related to IV bags.”
Gov. Kathy Hochul of New York, home to the largest port in the strike, said in a statement Monday night that the state is “working around the clock to ensure that grocery stores and medical facilities Our economy has the essential products they need. “
Woitzik said while other IV fluid manufacturers incl Medical ICU (17% market share) and B. Braun (23% market share), it is difficult for them to compensate for the short-term supply shortage.
“IV fluids are essential medications used in hospitals for routine and critical care,” Woitzik said. “In the event of a shortage, elective surgeries may be affected and patients may have to stay in hospital longer due to restrictions.”
He added that a similar incident occurred in 2017 when Hurricane Maria devastated many pharmaceutical and medical device factories in Puerto Rico, leading to shortages of intravenous fluids and critical materials. for patients across the United States for many years.
The Alliance for Chemical Distribution (ACD) said the strike will lead to severe delays, rerouting and greater uncertainty in the delivery of essential products at countless US ports .
Brandon Daniels, CEO of supply chain risk management consulting firm Exiger, said disaster relief agencies and critical infrastructure providers are trying to sort out critical goods. most important and affected. “While 90% of containerized pharmaceutical imports are processed through these ports, we were able to determine that only 23 drugs out of 165 critical drugs are produced exclusively through these ports,” Daniels said. foreign”. “High value drugs will be shipped by air. We are more concerned about the current drug shortages we are monitoring and the impact this disruption has on our ability to supply APIs and How important precursors are for everything from antibiotics to painkillers.”
Daniels also warned that consumer products needed in disaster relief such as sterile gloves and medical plastics are also processed through these ports.
