One lesson Covid-19 can teach everyone
No one country should ever again be the source for vital healthcare supplies, and Ras Al Khaimah is also looking at becoming a major production hub for big pharma
FentireBY or well over two decades the world relied almost exclusively on China for its every health care procurement need, given the Asian giant’s sheer manufacturing capabilities, cost advantage and dependability, all of which resulting in a nicely humming global supply chain scenario.
With pioneering European and US technology companies moving their entire production facilities to China in the name of cost efficiency, China had a good thing going — for long. Realising how lucrative it was to be the world’s leading manufacturing base, China also greatly enhanced its manufacturing capabilities, quality and more, making it irresistible to the $105 billion global health care procurement sector.
Best laid plans ...
When the Covid-19 pandemic first broke out in Wuhan early this year, all hell broke loose within the global health care procurement system as the Chinese authorities shuttered all production facilities across the country to mitigate the spread of the deadly disease.
Then, with spiralling Covid-19 cases in dozens of countries requiring urgent delivery of vitally needed health care supplies — including medical consumables and disposables, bulk drugs and the like — attention swung solely to China to deliver the goods, with governments battling each other and even poaching scare medical supplies from the few Chinese companies that still had stocks to sell.
In the blink of an eye, the pandemic exposed to medical policymakers just how overly dependent the global health care procurement system was on China, even as media headlines around the world proclaimed glaring shortages of face masks, PPE (Personal Protective Equipment) for front-line workers, penicillin, antibiotics, painkillers and other bulk drugs. And the alarm bells kept on ringing for months, as the manufacturing base was kept in lockdown.
Looked elsewhere
As supply-demand problems for medical supplies persisted, and as China remained largely locked down, policymakers of forward-thinking countries, including the UAE, initiated and ramped up their own health care supplies’ manufacturing capabilities from not knowing for how long China would be unable to meet their mass requirements. It soon dawned on countries that they had to be self-sufficient with their health care procurement systems.
Even though concerns such as economies of scale creep up, a small number of countries, such as Indonesia and Malaysia, are quickly emerging as key alterative health care production suppliers to meet global demand. At one point, there was a global shortage of medical ventilators, the bulk of which were being produced in China. But then, countries such as Germany, ramped up their own production
Similar to what it has achieved with food security, the UAE has also expressed interest and is already making strides in its own health care supplies’ manufacturing capabilities.
of ventilators when supplies dried up at the height of the pandemic.
Similar to what it has achieved with enhancing its food security, it must be noted that the UAE has also expressed interest and is already making strides in its own health care supplies’ manufacturing capabilities, with Abu Dhabi now producing high-quality face masks. The country also has huge potential in attracting big pharma, as well as medical consumables and disposables production.
In this context, Ras Al Khaimah is also looking at making the emirate a major production hub for big pharma, medical equipment and consumables.
If the Covid-19 pandemic has taught us anything, it is not to rely on any one country in any one part of the world for medical supplies. Look for and establish alternative production facilities scattered across the globe and also the need to be self-sufficient, as much as possible.
In this regard, global names such as Siemens, which have dedicated health care manufacturing facilities in China need to rethink their strategies, to avoid unprecedented supply-chain stoppages.
At the end of the day, one cannot eliminate China from the big picture because it will always remain the number one producer through sheer economies of scale it offers.
But yes, the pandemic has put the global health care supplies procurement system under the microscope, with several important takeaways that need immediate acting upon and before a new and unprecedented global supply chain meltdown scenario suddenly unfolds.