The rapid spread of the 2019 novel Coronavirus—20 countries in just over a month—has put healthcare providers in a state of alert and preparation.
In addition to working to treat and prevent illness, U.S. providers must also ready themselves for a possible disruption in a supply chain that’s grown increasingly dependent on China for medical and pharmaceutical supplies.
“The integration of supply chain is profound,” said Benjamin Shobert, senior associate of international health for the National Bureau of Asian Research, a non-partisan think tank based in Washington D.C.
“There’s already a very active conversation on Capitol Hill around whether or not the United States should have taken the dependencies that it has on Chinese-manufactured pharmaceuticals,” Shobert said. An estimated 80% of the active ingredients used to make medications are imported from China, according to the Council on Foreign Relations.
China also is a major global supplier of disposable medical devices like syringes and gloves, as well as surgical equipment. Over the past decade the country has also exported higher-tech therapeutic and diagnostic products like joint implants and MRI machines.
Sales of Chinese orthopedic implantable devices grew by 189% to $555 million from 2011 to 2016, according to a 2018 analysis by the U.S. International Trade Commission. Over the same period, exports of diagnostic equipment increased by 37% to $1.4 billion.
According to the medical device trade association AdvaMed, medical device and diagnostic products imported from China make up just under 3% of the $170 billion medical technology market.
But Michael Alkire, president of healthcare supply chain and consulting company Premier, said it’s difficult to estimate how many of these goods come from China.
“There are critical pieces of upstream supply chain information that are unknown, including raw material suppliers, third party and contract manufacturers, sterilizers and more,” Alkire said. “Because reporting of this information is completely voluntary, most won’t do so until it becomes an industry-wide expectation and best practice.”
David Gillan, senior vice president of sourcing operations for healthcare supply giant Vizient, said past infectious disease threats have caused suppliers to purchase products from other countries to avoid disruptions.
Gillan said Vizient is working with both supplies and members to maintain adequate inventory levels.
Another connection in recent years has been an increased investment in public Chinese hospitals by a host of U.S. health systems following a decrease by Chinese officials in regulating foreign ownership of the country’s hospitals.
But politics may make those investments more difficult.
Last September, the Trump administration reportedly proposed restricting all financial investments in Chinese companies while the two countries were in middle of trade negotiations. Administration officials denied the reports, and last month, the U.S. and China signed an agreement with no mention of the investment restrictions.