UK Medicine Shortages Imminent as Iran War Disrupts Global Supply Chains
Britain is just a few weeks away from potential shortages of critical medicines, ranging from common painkillers to life-saving cancer treatments, if the ongoing conflict involving Iran continues, according to industry experts. The war has severely disrupted air and sea transport routes, threatening the supply of health essentials and likely driving up drug prices for consumers and the NHS.
Perfect Storm for Pharmaceutical Supply Chains
The conflict has created what analysts describe as a perfect storm for global supply chains. Key raw materials like oil, gas, fertilisers, and helium have already been affected, and medicines could be next in line. David Weeks, director of supply chain risk management at Moody's, highlighted the critical role of India, often called the pharmacy of the world, which produces a significant portion of generic drugs and active pharmaceutical ingredients (APIs). With the Strait of Hormuz nearly closed and regional airports operating on limited schedules, transporting these components has become increasingly challenging.
Mark Samuels, chief executive of Medicines UK, noted that while a crisis is not yet present, the situation is serious. Medical distributors typically maintain six to eight weeks of stock, but if the war drags on, shortages could emerge within that timeframe. During the COVID-19 pandemic, similar disruptions led to shortages of paracetamol and other painkillers, underscoring the vulnerability of supply chains.
Transport Disruptions and Rising Costs
The war has forced pharmaceutical companies to reroute shipments, with air freight costs doubling due to the US-Israel involvement. Approximately one in five NHS medicines arrives by air, and manufacturers are currently absorbing these increased expenses. However, with historically low margins, some drugs may become loss-making to supply to the NHS. Shipping, the primary method for most medicines, is also under strain, with sea transport now taking an extra 14 days and incurring additional fuel costs of around $1 million per journey.
Wouter Dewulf, a professor at Antwerp Management School, stated that medicine supplies are currently disturbed but not disrupted. He anticipates single-digit price increases if the situation worsens, emphasising that everything depends on the war's duration. Frank Van Gelder of Pharma.Aero pointed out that air cargo levels have dropped by 80%, severely impacting the sector's reliance on frequent flights for time-sensitive shipments.
Impact on Specific Medicines and Broader Economic Effects
Certain medicines require air transport for speed, including:
- Expensive cancer and infectious disease treatments
- Hi-tech cell and gene therapies
- Biologics needing cold storage
- Drugs used in clinical trials
Beyond transport, rising crude oil and natural gas prices are increasing the cost of petrochemical products essential for manufacturing APIs, syringes, vials, and other medical supplies. Van Gelder warned that these ripple effects will ultimately be passed on to patients through higher prices, whether directly or via taxpayer-funded systems like the NHS.
The UK produces about a quarter of its medicines domestically, with a third sourced from India and additional supplies from the EU. This reliance on international sources makes the country particularly vulnerable to geopolitical disruptions. As the conflict continues, the healthcare sector braces for potential shortages and financial strain, highlighting the interconnected nature of global supply chains and public health.
