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   When It Costs Too Much…

Posted June 02, 2021

Aaron Gentzler

By Aaron Gentzler

When It Costs Too Much…

Over the past 15 months, pharmaceutical companies have become keenly aware of their dependence on delicate supply chains.

It stands to reason then the pandemic has persuaded drug manufacturers to make supply chains as anti-fragile as possible.

For the United States, that means reassessing Asia’s dominance in the pharmaceutical industry.

“Lower costs have been a key decider in relocating a significant share of manufacturing capabilities to China and India… in the last ten years or so,” says Global Trade Magazine.

Take, for instance, active pharmaceutical ingredients (APIs) -- the building blocks of drugs which bring about their intended therapeutic effects…

Send your opinions to, therundown@email.stpaulresearch.com.

Your Rundown for Wednesday, June 2, 2021...

…. To Be Cheap

“Almost 40% of registered sites for APIs were located in India or China, according to FDA data published in 2019.”

The upshot? “The relocation of manufacturing to Asia has a direct impact on supply chain reliability and has led to drug shortages,” according to Global Trade Magazine.

In fact, even before the coronavirus went viral, the FDA had 145 medications on its drug shortages list. By April of this year, the list had expanded to 175 drugs.

And the average wait time in the U.S. for these FDA-listed medications to come back online is 14 months. In some cases, years…

So, here’s the question: “COVID-19 marks a point in the understanding of medicine supply risks, but will it fuel efforts to establish local supplies of chemicals and APIs as a ‘matter of national security’?” Or a matter of life and death…

The solution? “Local, regional, shorter supply routes are preferred [and] the current crisis… is driving this theme globally.”

Our science and technology expert Ray Blanco believes this shift in the pharmaceutical industry is already underway, and he sees phenomenal opportunities for everyday investors. Stay tuned…

Market Rundown for Wednesday, June 2, 2021

S&P 500 futures are up 9 points to 4,210.

Oil is up 1% to $68.40 for a barrel of West Texas Intermediate.

Gold’s up $2.50 per ounce to $1,907.50.

Bitcoin is up 5% to $37,875.

Send your comments and questions to, therundown@email.stpaulresearch.com.

Have a wonderful rest of your week… We’ll have more to say Friday.

For The Rundown,

Aaron Gentzler

Aaron Gentzler
Editor, The Rundown
TheRundownFeedback@StPaulResearch.com

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