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Pharma Industry faces clinical trial woes due to Coronavirus in China

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The Covid 19 Coronavirus far from being contained is finding new victims every day. With almost all parts of the world reporting cases, concerns about the far-reaching effects of the disease are being discussed and governments are already preparing for an economic slowdown in the short-term and maybe a global recession in the coming days.

One of the sectors feeling the squeeze is the pharmaceutical industry. Industry watchers say that many ongoing drug trials are facing disruptions with people in clinical drug testing, unable or unwilling to report to hospitals for fears of catching the virus.

Along with clinical trials, the Pharma industry may even face some shortages of ingredients that are supplied by the Chinese pharma companies.

 In the Chinese region of Wuhan, 500 world trials are ongoing, according to reports, and maybe facing disruptions. About 20% of global trials are now conducted in China, up from about 10% just five years ago, according to Global Data Plc.

This was confirmed by the Ari Bousbi, CEO of Iqvia Holdings, which conducts trials for drug companies. He says that the company expects that its earnings will suffer a loss of nearly $25 million due to test subjects missing from drug trials. “The patients who are enrolled in a trial are simply not going to visit the hospitals,” Bousbib said.

Some pharmaceutical companies are still acting cautious and are not too worried about the impact of a viral pandemic.

Bristol Meyers Squibb, Merck, China-based BeiGene, and WuXi Apptec are all denying any major impacts on ongoing trials. BeiGene has 20 trials ongoing in the Wuhan district. Other companies that have similar trials in China are Roche, Zai Lab Ltd, and Hutchison China MediTech Ltd (Chi-Med).

“Our multiple sites in China and around the world have enabled us to mitigate risks associated with unexpected work interruptions,” WuXi Apptec’s co-CEO, Edward Hu, said in a statement to Barron’s. “As a result, COVID-19 has not had a significant impact on the delivery schedule of our projects.”

These assumptions are based on the belief that the impact can be localized to certain areas, and even if rials are impacted, the model data can be imputed with other details.

Coronavirus Map to Track in Real Time

So far, 16 countries have reported cases of the coronavirus. These include the US, Australia, Japan, Germany, and India.

 Hospital authorities in China have made it clear that they have other priorities at the moment rather than chasing people to continue with the drug trials.

But there are other major concerns also figuring in the disruption, not only the pharma industry but related healthcare, including hospitals and biotech companies, will be impacted.

 The supply chain of major drugmakers could see an upset. Most companies rely for their ingredients, called active pharmaceutical ingredients or APIs, on Chinese companies. It is believed that 60 per cent of the world’s API is made in China, and if the Covid 19 virus continues unabated, it is not sure when the manufacturers will be back in business fully.

The FDA recently reported the first US drug shortage as a result of the epidemic though it is not revealing the name of the drug.

No details are available of the shortage, but market observers are surprised at such early reports of shortages.

The shortfall has come far sooner than experts had predicted, though it is impossible to gauge its seriousness based on the limited information provided by the FDA. Generally, all companies keep backup supplies of APIs.

The FDA revealed that it knew of 20 drugs that were manufactured in China or depended on Chinese APIs. “We’re obviously very worried about active pharmaceutical ingredients that come from” affected areas in China," the FDA said.

Drugmakers have said that they had no shortages yet. “The situation is fluid, but at this point, we do not anticipate impacts to our supply chain unless disruption due to the Covid-19 outbreak is sustained over the next several months,” Merck (MRK) said in a statement, reports Reuters.

Experts say that some shortage of generic drugs will come up in the second and third quarters of the year.

Privately owned hospitals in the US are also seeing some wild swings in their stocks with people expecting a rush in their services. Although there is a downside too, with normal procedures and surgeries facing disruptions if there is a rush of coronavirus cases in the country.

Gilead Sciences and Moderna are both working hard on coming up with a vaccination for the virus. The product is far from ready, and human trials are still awaited. There are also reservations about how the vaccine will be marketed once it is ready. Though both companies claim at this point, they are more worried about finishing the tests and the humanitarian aspect rather than its commercialization.

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