Oil and gas disruptions can quietly choke medicine supplies. Protecting petrochemical inputs, stabilizing prices, and preventing counterfeits are critical for safe, affordable drugs to reach patients.
Many of us have had a crash course on the choke points of oil and gas supply chains in recent weeks—a dramatic reminder from school science classes that hydrocarbons yield far more than fuel. They are the source of helium vital to hospital scanners and microchip manufacturing, the ammonia in our fertilizers, and the building blocks of plastics. But there is one critically important industry that isn’t getting the same attention: pharmaceuticals.
Virtually every drug manufactured today relies on petrochemical-derived feedstocks. A 2011 study in the American Journal of Public Health showed that while only 3% of petroleum production is used for pharmaceutical manufacture, a staggering 99% of all pharmaceutical raw materials trace their origins back to petrochemicals.
This is not an abstract concern confined to niche or expensive medicines. The interruptions will affect the production of the most basic drugs to the most complex. Paracetamol and ibuprofen are synthesized directly from propylene, a crude oil derivative. Medicines for infections (antibiotics), lowering cholesterol (statins), diabetes (insulin), and cancer (chemotherapy drugs) all depend on petrochemical-derived intermediates at some stage of their production. Even the way medicines are delivered to patients is petrochemical-dependent: the intravenous bags hanging in hospital wards, the syringes used in vaccination drives, and the nitrile gloves worn by every nurse and pharmacist are all manufactured from polymers and plastics. The closure of the Strait of Hormuz is putting access to needed health services and products at risk.
Asia and the Pacific is at the epicenter of this crisis. India produces nearly half of all generic drugs dispensed globally and about 65% of what are considered essential vaccines. With India receiving roughly 40% of its crude oil via the Strait of Hormuz, the closure directly impacts its ability to produce those medicines.
The People’s Republic of China (PRC) is the world’s largest producer of pharmaceutical raw materials and active pharmaceutical ingredients (APIs). Any disruption to its petrochemical supply chains has a large effect on the global supply of medicines. India imports more than a third of its APIs, and roughly 70% of those imports come from the PRC. The two countries are deeply interlinked in ensuring the supply of accessible generic medicines and essential vaccines. Prices of many APIs have soared.
As the supply of vaccines and medicines tightens, a dangerous consequence of drug shortages becomes more likely.
Counterfeiters are known for taking advantage of situations where a particular medicine is in short supply, and the World Health Organization (WHO) estimates that over 50% of medicines purchased from illegal online pharmacies are fake.
This is an existing and documented risk for Asia and the Pacific. Authorities in India, Cambodia, Pakistan, and Viet Nam have all recently issued warnings about counterfeit medicines. With raw materials and production costs rising sharply across the region, the risk that substandard or adulterated products enter supply chains—whether through deliberate fraud or corner-cutting—rises significantly. For the countries in the region with the least regulatory capacity to detect and intercept falsified medicines, this is an especially acute threat.
“Governments need to treat the pharmaceutical sector with the same urgency they apply to food and energy security.”
Urgent and immediate steps need to be taken to protect both people’s access to safe, essential, and effective medicines, as well as to protect the pharmaceutical sector.
Governments, including through regional bodies, need to treat the pharmaceutical sector with the same urgency they apply to food and energy security. The fact that only 3% of petroleum production is needed to sustain the entire global pharmaceutical supply chain makes this a problem that can be solved: it is not about volume, it is about priority and coordination.
Governments must act decisively to protect people from the rising cost of medications. Several measures can help. They can define essential medicines and introduce targeted price controls; consider suspending import duties and tariffs on essential APIs and finished products; set limits on price increases; and, where needed, provide short-term, targeted energy subsidies to pharmaceutical manufacturers during the shortage. We should also make sure that primary care facilities in lower‑income communities are not last in line when supplies tighten, as disruptions are often felt earliest and most severely in these areas.
Regulators across the region need to treat the current environment as a high-alert period. This means strengthening post-market surveillance, increasing inspections of imported and domestically produced medicines, and running coordinated public awareness campaigns that help patients understand the risks of counterfeit drugs. At the same time, healthcare providers and pharmacists need clear, up-to-date guidance on how to identify and report suspected falsified products.
With timely and coordinated action, governments can stabilize supply, keep costs manageable, and protect the most vulnerable. The solutions are within reach and just like during the COVID-19 pandemic, development agencies can support vulnerable countries to address the risk to health care systems.
Ayesha Jamshaid De Lorenzo
Health Specialist, ADB's Human and Social Development Sector Office, Sectors Department
Eduardo Banzon
Director of ADB's Health Practice Team, Human and Social Development Office, Sectors Department
Reproduced from adb.org.
