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Imagine having a young child rushed into your clinic after being bitten by a deadly brown snake, only to find that there’s no anti-venom left. Western medicine knows how to cure this child, but the solution in remote Australia can be many hundreds of kilometres away, and whether the child lives or dies depends on how much venom is seeping through their veins.

I have been in this situation. The long minutes can be counted in cooling limbs and slowing pulses.

In the safety of big hospitals in our cities, little thought is given to whether or not the cupboards are stocked. When an intensive care physician charts an antibiotic for a patient in imminent demise, a rushed signature is followed by clinical action without question. This is the final step of an unimaginably complex supply chain that starts in mines, oilfields and paddocks across the globe, and ends as the final product seeps through a drip and into the patient’s arm.

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But given the challenges of climate change, global political uncertainty and the concentration of manufacturing in emerging countries, it’s time to pay serious attention to our stocks. 

This is already happening around the world. In UK hospitals, doctors are trying to predict the long shadows of Brexit that suggest pharmaceutical supply chains might fail. In the US, tablets prescribed for high blood pressure were recently found to be contaminated with a product used in rocket fuel. The government is now reckoning with the regulatory and national security effects of US supply chains that lead to Chinese manufacturing plants.

In late 2017, I was informed that there was a critical shortage of an antibiotic called piperacillin/tazobactam (a combination antibiotic that treats deadly resistant infections). If you know anyone who has been admitted to intensive care in the last few decades, it’s likely that this drug was part of the inventory used to try and save them. This was a huge concern for me, working in a remote hospital in the tropical north of Australia; December is a month when bacterial infections flourish, meaning the timing could prove dire. However with drug shortages becoming increasingly common, the news didn’t come as a surprise.

The generic drug was released into the market in 1993, and came off patent in 2007. However over the last decade, the federal government has legislated to systematically reduce the amount it pays for generic medicines including piperacillin, as if our society expects such complex products to come almost for free. Nobody markets drugs with such small profits margins any more — the medical community are much more interested in the expensive new stuff appearing in medical journals — but doctors still expect to be able to just reach in and grab piperacillin from their pharmacy shelf to save a life. 

As such, medicines approach the economic point of non-viability, manufacturing moves offshore and becomes more and more concentrated. Global market forces, and potentially also foreign governments who recognise the strategic advantage of holding on to such capacity, have resulted in a coalescence of manufacturing plants in India and China where scales are large enough for profits to continue to flow. 

But how sustainable is this? In 2016, there was an earth-shaking blast in a factory owned by Qilu Pharmaceutical Company in Ji’an, China. A high-pressure cylinder containing ethanol exploded, igniting the factory and sending a plume of white powder-filled smoke into the night sky. The powder that rained down onto the streets like snow dust was the entire global stock of the main ingredient for piperacillin.

Three years later, this stock has still not recovered.

Australia’s supply chain for the entire range of healthcare products is incredibly complex. Not even a pair of latex gloves escapes such interwoven global dependencies. There are, of course, national and international regulatory frameworks to ensure quality and ongoing supply. However, these were set up more than three decades ago. Are they still fit for purpose? 

Think of Chennai, India. The city has a concentrated pharmaceutical manufacturing industry, and has recently been hit with an unprecedented drought so severe that factories shut down and employees were told to stay home because there wasn’t enough water to drink. Such climate-associated risks were unlikely to have been considered 30 years ago. 

In the US, markets are reacting to ongoing shortages, inadequate quality regulation, and fears relating to the slow and steady decline of manufacturing capacity of generic medicines. These issues should be on the agenda for Australia too. We need an urgent national strategic review to address weaknesses in our healthcare supply chains. If we don’t, the cost will be far too great. 

Simon Quilty is a doctor from central Australia affiliated with the Institute for Integrated Economic Research.

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Peter Fray
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