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Media And Political Bulletin – 06 March 2020

Media and Political Bulletin

06 March 2020

Media Summary

Your Paracetamol Supply Depends A Lot On China

Bloomberg, Lionel Laurent, 06 March 2020

Bloomberg features an opinion article by Lionel Laurent, who reports you would expect the coronavirus outbreak to have focused the minds of Europe’s politicians and drugmakers on finding a vaccine. But it’s the continent’s fragile dependence on Asia for raw generic drug ingredients like paracetamol that’s proving a more immediate headache.

European Union health ministers are due to discuss the security of medical supplies on Friday, after warnings that the bloc faces potentially significant shortages of crucial components imported from China as the country attempts to get back to work after virus-related shutdowns. France has openly called for more manufacturing “sovereignty” from foreign suppliers, as it scrambles to guarantee the supply of masks and control the price of hand-gel to try to reassure the public.

Short-term ideas such as stockpiling or resource sharing will probably be examined today in Brussels. But supply risks have been known for a long time and will require deeper fixes, according to Philippe Luscan, an executive who oversees French drugmaker Sanofi’s industrial footprint. In an interview, Luscan outlines Sanofi’s own push to get pharmaceutical production re-shored back in Europe.

Europe could face more drug shortages as coronavirus squeezes supplies

Reuters, Francesco Guarascio, 05 March 2020

Reuters reports that Europe is experiencing delays in supplies of medicines and face masks because of coronavirus disruptions, according to EU and industry officials, compounding already acute shortages of drugs on the continent.

Many countries around the world rely on China, the source of the outbreak, for drug ingredients in an age of global supply chains, and are grappling with how to avoid shortages of vital medicines. A senior official from the EU Commission has said the European Union is assessing the delays in drug shipments from Asia.

The European concerns come as India, which is the world’s main supplier of generic medicines and also relies on Chinese ingredients, decided to restrict some drug exports.

“Many active pharmaceutical ingredients are produced in China and the virus outbreak is affecting the manufacturing capacity and stability of the supply of these ingredients,” the European Medicines Agency, an EU body, told Reuters. “This could potentially lead to shortages of medicines worldwide.”

The Commission said it had not yet seen shortages in the bloc caused by the virus. But any hit to supplies due to the outbreak could worsen existing shortfalls.

 

Parliamentary Coverage

Border Delivery Group Newsletter, HMRC, 05 March 2020

This bulletin provides the latest news from Government relating to UK borders during the transition period.

Government confirms plans to introduce import controls

The Chancellor of the Duchy of Lancaster, The Rt Hon Michael Gove MP, announced recently at a Border Delivery Group stakeholder event, that full border controls will be introduced after the transition period ends in December 2020. The decision avoids any trade distortions between the UK and EU and treats all UK exports and imports equally, meaning traders in the EU and GB will have to submit customs declarations and be liable to goods’ checks.

He also confirmed that the policy easements put in place in October 2019 will not be reintroduced as businesses have time to prepare. This includes the easement on Safety and Security declarations on imports from the EU.

The Future Relationship with the EU. The UK’s Approach to Negotiations

Government has published a 30-page document outlining its priorities for negotiations. The main element is the comprehensive Free Trade Agreement covering substantially all trade. It proposes a separate agreement on fisheries that will take back control of UK waters; an agreement on law enforcement and judicial cooperation in criminal matters to help protect the public and bring criminals to justice; and agreements in technical areas covering aviation, energy and civil nuclear cooperation which will help ensure continuity for the UK on its new footing as an independent sovereign nation.

You will have noted that the UK is not seeking a waiver in relation to Safety and Security declarations as part of the FTA negotiations, and will be implementing the requirement for Safety and Security declarations. Accordingly, we expect that the EU will implement UCC Safety and Security requirements on GB/EU trade. The UK will be able to set out our own requirements, consistent with the international SAFE framework and our border security ambitions. However, the default is the implementation of Safety and Security declarations in line with the rest of the world. The processes required to fulfil Safety & Security requirements will form part of the border operating model which BDG is working on with all relevant Departments, and plans to publish at the end of March.

HMRC extends customs grant funding deadline

HM Revenue and Customs (HMRC) has extended the deadline for businesses to apply for customs support funding to 31 January 2021.

The scheme, first announced in September 2019, had been due to close on 31 January 2020. To date, applications have been made for around £18.5 million out of a possible £26 million – meaning there is at least £7.5 million left to claim from HMRC.

As well as supporting recruitment and improved IT capability, the money applied for so far could potentially fund nearly 15,000 training courses to help traders submit customs declarations.

 

Full Coverage

Your Paracetamol Supply Depends A Lot On China

Bloomberg, Lionel Laurent, 06 March 2020

You would expect the coronavirus outbreak to have focused the minds of Europe’s politicians and drugmakers on finding a vaccine. But it’s the continent’s fragile dependence on Asia for raw generic drug ingredients like paracetamol that’s proving a more immediate headache.

European Union health ministers are due to discuss the security of medical supplies on Friday, after warnings that the bloc faces potentially significant shortages of crucial components imported from China as the country attempts to get back to work after virus-related shutdowns. France has openly called for more manufacturing “sovereignty” from foreign suppliers, as it scrambles to guarantee the supply of masks and control the price of hand-gel to try to reassure the public.

It may seem pretty insensitive to point the finger at China and politicize medical-supply issues, given the country’s own tally of infections and deaths from the Covid-19 disease. Yet the scale of pharmaceutical dependence on Asia clearly deserves more attention than, say, textiles. The data is patchy but France’s National Pharmaceutical Academy estimates the EU imports 80% of its “active pharmaceutical ingredients,” mostly from China and India. The U.K. medicines regulator estimates Chinese manufacturers make around 40% of all APIs used worldwide.

What makes Covid-19 so dangerous for imports is that it combines Chinese factory shutdowns with domestic political pressure to act aggressively. India, itself very reliant on China for pharmaceutical ingredients, spooked the world this week by announcing curbs on exports of common drugs including paracetamol. French laboratories have warned of possible medicine shortages later this year, according to Les Echos. Over in the U.S., which has similar supply issues when it comes to China, the Food and Drug Administration has said one drug is in short supply because of the coronavirus outbreak without naming it.

Short-term ideas such as stockpiling or resource sharing will probably be examined today in Brussels. But supply risks have been known for a long time and will require deeper fixes, according to Philippe Luscan, an executive who oversees French drugmaker Sanofi’s industrial footprint. In an interview in his Paris office — where handshakes are now discouraged, obviously — he outlines Sanofi’s own push to get pharmaceutical production re-shored back in Europe.

The company aims to spin off six European factories (in the U.K., France, Germany, Italy and Hungary) into a new listed entity by 2022, representing 1 billion euros ($1.1 billion) of revenue. That entity will strike deals with firms that want to expand EU production. The Covid-19 crisis serves as one “salutary” incentive to do so, says Luscan. There are others, he adds: Quality issues that have forced products off the shelves, rising labor costs in China, and a pollution crackdown that’s temporarily shuttered factories.

This alone is probably unlikely to reverse the forces of globalization. If so many generic ingredients are manufactured in Asia, it’s because the plunging price of off-patent drugs using them and the rising cost of building lucrative new drug pipelines have pushed drugmakers to seek out cheap bases abroad. The head of Swiss company Novartis AG’s generics business, Richard Saynor, said last month that some antibiotics were being sold in Europe for “less than the price of chewing gum.” Even Sanofi’s own initiative looks like an elegant way to free up capital from a low-margin business.

But Luscan’s initiative should also prod policy makers into doing their part to boost production. Viewing medicines as a strategic asset rather than a cheap commodity — one of the recommendations of Rosemary Gibson’s 2018 book “China Rx” — would be a good start, as would thinking up financial incentives to encourage local production. EU initiatives designed to boost new medical research are a good thing, but the security of generics shouldn’t be ignored.

The big unknown is how bad the current crisis could get. Bloomberg Intelligence pharma analyst Sam Fazeli warns that if Chinese factory production bounces back while the virus spreads in the EU, it’s possible that European manufacturing will become a bigger source of disruption. Officials in Brussels should bear that in mind when mapping out emergency scenarios.

Still, it’s a good thing overall that the EU is finally waking up to drug supply risks. It shouldn’t miss the opportunity to do something about it — or seed the makings of an even bigger headache when the next pandemic threat strikes.

Europe could face more drug shortages as coronavirus squeezes supplies

Reuters, Francesco Guarascio, 05 March 2020

Europe is experiencing delays in supplies of medicines and face masks because of coronavirus disruptions, according to EU and industry officials, compounding already acute shortages of drugs on the continent.

Many countries around the world rely on China, the source of the outbreak, for drug ingredients in an age of global supply chains, and are grappling with how to avoid shortages of vital medicines.

The European Union is assessing the delays in drug shipments from Asia, a senior official from the EU Commission said, as France warned it was over-dependent on China with about 40% of the country’s drug ingredients imported from there.

The European concerns come as India, which is the world’s main supplier of generic medicines and also relies on Chinese ingredients, decided to restrict some drug exports.

“Many active pharmaceutical ingredients are produced in China and the virus outbreak is affecting the manufacturing capacity and stability of the supply of these ingredients,” the European Medicines Agency, an EU body, told Reuters.

“This could potentially lead to shortages of medicines worldwide.”

The Commission, the EU’s executive arm, said it had not yet seen shortages in the bloc caused by the virus. But any hit to supplies due to the outbreak could worsen existing shortfalls.

NEEDED: FACE MASKS

A survey of 24 EU countries at the end of last year found all had experienced shortages of medicines in 2019, while the number of drugs in short supply grew in most states, according to the Pharmaceutical Group of the European Union (PGEU), a trade body.

Respiratory medications were not sufficiently available in nearly all surveyed states, the report found, raising worries about the EU’s preparedness for a large outbreak of coronavirus, which can cause pneumonia and other breathing illnesses.

Jan De Belie of the PGEU said that, as well as China, Europe could face supply problems from northern Italy, a region where many drug producers operate and which has suffered the worst outbreak of the new coronavirus outside Asia.

EU officials also warn the bloc is running short of face masks and other personal protective gear because of soaring demand, particularly in Italy.

Last week, the Commission launched a joint procurement effort on behalf of 20 EU states. But officials said that even if they could secure supplies, they were unlikely to be delivered before April.

“There is a shortage in the market for these products,” a Commission official told EU lawmakers in a hearing on Thursday. “We will have difficulty in meeting all the anticipated needs of member states.”

The official added the shortage caused dangers to medical staff, who are more exposed to infections, and warned about risks of not having enough healthcare workers if the outbreak spread further. Currently there are more than 4,000 case detected across EU states.

To counter the possible dearth of medical staff, the official told a second hearing later on Thursday that EU governments were considering mobilizing retired medical workers and students to cope with the outbreak.

On Friday EU health ministers will hold emergency talks in Brussels on coordinated measures to combat the epidemic.

Media And Political Bulletin – 06 March 2020

From Factory to Pharmacy

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