Shot-down Chinese balloon may affect US medical supply chain

After the U.S. shot down a "high-altitude object" hovering above Alaska's waters on Feb. 10 and a confirmed Chinese spy balloon the week prior, it's unclear what these actions mean for the U.S.-China medical supply chain. 

Some domestic medical supply companies are already leaning away from healthcare products made in China, but 32 percent of the world's supply of antibiotics is made in China, according to the US-China Business Council. For the location of facilities that manufacture active pharmaceutical ingredients used in the U.S., 28 percent are in the U.S., 26 percent in the European Union, 18 percent in India, 13 percent in China, 2 percent in Canada and 13 percent elsewhere, according to 2019 data from the FDA

"The Chinese balloon incident is the canary in the coal mine for the U.S. healthcare industry," Tinglong Dai, PhD, a professor of operations management and business analytics at Johns Hopkins University in Baltimore, told Becker's. "Our hyper-globalized supply chains leave us vulnerable to any geopolitical hiccup. It's time for healthcare executives to take a hard look at their supply chains and invest in reshoring, nearshoring and friendshoring to build a more diversified and secure system. A resilient supply chain is the cornerstone of a strong healthcare system, and neglecting it is like leaving the foundation of a building unsecured — it may seem stable for a while, but a surprise disruption could bring the whole structure crashing down. Let's not wait for the next surprise to take action."

In a Feb. 7 opinion for The Hill, national policy adviser Jeremy Hurewitz wrote that current U.S. policy is starting a "Cold War-like state of competition with China [...] with new restrictions on semiconductors and other advanced manufacturing." 

"On the business side, U.S. companies are increasingly decoupling their supply chains from China to better manage the risk of this new era," he wrote. "We'll see more examples of these policies from both government and business in the coming months."

Both the American Journal of Managed Care and the Center for Infectious Disease Research and Policy wrote posts about the potential effects that rising international tensions could have on the medical supply chain. 

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