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Future cost of COVID-19 on pharma manufacturers

As the number of COVID-19 cases continues to increase worldwide, numerous questions and a tremendous amount of misinformation cloud the issue. Many remain confused about how the virus is transmitted, how dangerous it is, and what treatments for it may be available.

The good news is that the safety of our food has been given a clean bill of health so far. Research indicates that food and food ingredients aren’t a transfer source for coronavirus. That said, food manufacturers, distributors, retailers and restaurants should review and refresh as appropriate all food handling health practices designed for preventing transmission of infectious diseases.

But the pharmaceutical industry, on the other hand, may have other challenges to deal with when it comes to confirming the safety of their products – at least those companies that have operations in China. The FDA announced on February 14 that inspections of manufacturing plants in that country have been put on hold.

That means that the growing number of Chinese facilities that make active pharmaceutical ingredients (APIs) are not routinely inspected. While API manufacturers, in general, don’t have a strong track record in recent years when it comes to safety, these plants haven’t yet shown any indication they are at risk.

FDA stressed in its recent statement that inspections are just one tool the agency uses to ensure the safety of FDA-regulated products entering the United States. The agency recently stated:

Other tools include: import alerts, increased import sampling and screening, requesting records, in advance or in lieu of an inspection – firms may elect to provide this voluntarily to allow the FDA to make approval decisions, evaluation of previous FDA inspections history to determine if this information would suffice in lieu of an inspection, as well as relying on a firm’s previous compliance history and information from foreign governments with which we have mutual recognition agreements as part of our Agency’s risk-based approach to ensuring quality, as well as compliance with applicable FDA requirements.

As this epidemic evolves, companies across all industries should take this as a warning that the FDA will take the steps it feels necessary to protect American consumers from coronavirus. Companies should be ready to comply with any and all agency requests in support of their own safety record.

Then, once this outbreak is under control, don’t be surprised if consumer advocates push for changes. The concept was teased in at least one article authored by Senator Marsha Blackburn (R – Tenn.) who serves on the Senate Commerce, Science, and Transportation Committee and the Senate Armed Services Committee. She writes, “Without action from policymakers, our dependence upon China for medications will continue to put American lives at risk.”

Now’s the time to make any necessary improvements to the way you self-regulate your supply chain. With experience handling thousands of product safety and recall events, we have a unique perspective on the risks, challenges, and often over-looked opportunities associated with these types of reputational matters. Call on us any time. We’re here to help.

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