On March 28, 2024, Eli Lilly & Co. released an image showing a Zepbound injection pen, as reported by Bloomberg.
A strike by port workers, stretching from New England to Texas, has disrupted nearly half of all trade entering the U.S., significantly impacting critical medical devices and drug components. These disruptions affect weight-loss and diabetes medications, including Novo Nordisk’s Ozempic and Wegovy, as well as Eli Lilly’s Mounjaro and Zepbound, according to customs data.
The delivery systems for insulin and weight-loss drugs heavily rely on East Coast ports. William George, Director of Research at ImportGenius, noted that both Novo Nordisk and Eli Lilly are dependent on the Port of Norfolk. Novo Nordisk has imported 419 twenty-foot equivalent units (TEU) of pharmaceuticals through Norfolk over the past year, including semaglutide-filled injection devices.
Novo Nordisk has reported nearly $50 billion in sales from Wegovy and Ozempic, primarily from the U.S. market. A company spokesperson confirmed they have plans to mitigate production disruptions due to the strikes, intending to utilize airfreight for shipping products to and from the U.S.
An Eli Lilly spokesperson declined to discuss its external supplier relationships. However, Dennis Monts, PayCargo’s Global Chief Commercial Officer, observed a peak in air sector volumes in September, anticipating an increase in air freight for perishable and fast-moving items, including medical supplies.
Shipments related to these disruptions comprise high-value and low-value pharmaceuticals, Active Pharmaceutical Ingredients (APIs), syringes, and disposable needles. Noushin Shamsili, CEO & President of Nuco Logistics, emphasized that the strike has hit a critical period for inventory replenishment in the drug sector, given the just-in-time nature of raw material imports for drug manufacturing.
Approximately 48% of APIs used in the U.S. are imported from India, with the remainder entering through East Coast ports from Europe. The strike could significantly impact the importation and distribution of medications like Ozempic, potentially causing supply chain disruptions, increased shipping costs, and inventory shortages.
Eli Lilly, which produces Mounjaro and Zepbound, is expanding production facilities in the U.S. and Ireland, while importing some APIs from Swiss manufacturer Corden Pharma. Novo Nordisk similarly imports APIs for weight-loss drugs.
Monitoring the broader risk to medical supplies due to the port strikes, the Biden administration and state governments, such as New York, are involved. The administration’s preliminary assessments suggest limited immediate impacts on medicines, medical devices, and infant formula for consumers. Agencies like the FDA and ASPR are in communication with stakeholders to manage potential vulnerabilities.
The East Coast ports also serve as an entry point for generic medicines produced in India. The healthcare industry’s supply chain complications include Hurricane Helene’s ripple effects, damaging critical facilities such as Baxter International’s North Cove plant, which supplies 60% of the U.S. market’s IV fluids.
Governor Kathy Hochul of New York assured that efforts are underway to ensure essential product availability in stores and medical facilities. Mirko Woitzik from Everstream Analytics noted that alternative IV fluid manufacturers are unlikely to cover the short-term shortage caused by the damaged North Cove plant. The ACD foresees severe delays and uncertainties in the delivery of essential products.
Brandon Daniels, CEO of Exiger, highlighted efforts by disaster relief agencies to prioritize critical goods. Despite 90% of containerized pharmaceutical imports being managed through the impacted ports, only a small fraction of critical medicines are exclusively manufactured abroad. High-value medicines will be airfreighted, but existing shortages and dependencies on APIs and precursors remain concerning.
The strike’s broader implications also include potential shortages of consumable products like sterile gloves and medical plastics processed through these ports.
