COVID-19 and Impact on Global Nutraceutical Supply Chain

There’s no doubt that we’ve reached a critical point in this ever-growing pandemic, and the signs are beginning to become clearly evident in the nutraceutical and pharmaceutical space. In particular, the fears surround the global pharmaceutical supply chain. The biggest headaches at the moment are the restrictions and impact of COVID-19 on two of the world’s largest global producers of nutraceutical ingredients and generics which happen to China and India. Ever since the initial outbreak took place, China began imposing lockdowns, which meant a direct decline in supply from their manufacturing facilities across the board. The biggest issue is we don’t even know exactly how bad things are due to it being difficult to estimate the limitation to the workforce. There has been correspondence with Chinese manufacturers and Western traders and buyers, wherein it was revealed that large manufacturing facilities are set to be fully operational soon. However, the struggles will persist for many smaller producers, until the pandemic’s curve flattens a bit more.

There is a reason some businesses will suffer more or less than others depending on their size and output. According to the experts, many companies feel that they are in a good position to withstand a prolonged period of struggle. This is in part due to the fact that publicly traded companies generally have 6 months to a year of excess product ready to distribute. Unfortunately, if restrictions continue for an extended period of time, these supply chain shortages will create a ripple effect that will impact the majority of the world’s global marketplace. In terms of immediate impact on nutraceuticals, generic drug producers who source APIs from China are forecasting supply-chain issues depending on how much longer the pandemic persists. In fact, these “short-term” scarcities are already taking their toll on the American nutraceutical front, with the United States Food and Drug Administration announcing major shortages only days ago, things are really beginning to escalate. The demand is shifting for several nutraceutical products, as antiviral use continues to increase, and other chronic conditions are neglected by patients as a result of fear of COVID-19 exposure.

Another major obstacle in the supply-chain space is India being restricted in the export of 26 highly active nutraceutical and pharmaceutical ingredients. The problem here is that these ingredients account for nearly 10 percent of their export capacity. Overall, India contributes 20 percent of the global generics supply. This makes the decision to restrict exports as a response to the fears of internal supply shortages all the direr. In particular, paracetamol, several antibiotics like erythromycin and tinidazole, as well as hormone progesterone and vitamin B12.2 are being heavily restricted. Reports indicate that the restrictions were imposed due to India’s manufacturers relying heavily on the importation of their APIs from China. Due to the persistent lockdowns and closures, slowed production of APIs by China resulted in less availability and higher costs for the materials needed for generics production.

The global nutraceutical and pharmaceutical supply chain will continue to take a major hit as long as these restrictions on the importation and exportation of essential ingredients and materials remain in effect. The healthcare industry waits with bated breath waiting for the essential items they need to slow down or halt the damage and spread of this disease.