An Eli Lilly & Co. Zepbound injection pen, March 28, 2024.
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A port strike affecting regions from New England to Texas has significantly disrupted nearly half of all trade entering the United States. This includes critical medical devices and drug components essential for the highly demanded weight-loss and diabetes medications from Novo Nordisk and Eli Lilly – Ozempic, Wegovy, Mounjaro, and Zepbound.
Customs data, particularly bills of lading, highlight that East Coast ports form a crucial link in the supply chain for these medications, handling incoming shipments of delivery mechanisms for insulin and weight-loss drugs. William George, Director of Research at ImportGenius, noted that Novo Nordisk and Eli Lilly are particularly dependent on the Port of Norfolk. Novo Nordisk has imported 419 TEU containers of pharmaceuticals through Norfolk over the past year, including injection devices containing semaglutide, a key component of their weight-loss drugs. Fine syringes used for insulin injections also arrive via ocean freight.
Novo Nordisk reported nearly $50 billion in sales from Wegovy and Ozempic, with the majority of revenue deriving from the U.S. The company has stated that it has plans to mitigate any production disruption due to these strikes by shifting to airfreight for shipping products to and from the U.S.
Meanwhile, Eli Lilly has opted not to disclose details regarding its external supplier relationships. Dennis Monts, Global Chief Commercial Officer at PayCargo, pointed out that air sector volumes peaked in September, likely anticipating a surge in air freight for perishable items like medical supplies.
The port strike arrives at a critical juncture for the pharmaceutical industry, complicating the just-in-time inventory strategies typically employed. Noushin Shamsili, CEO & President of Nuco Logistics, expressed concern about the repercussions for drug manufacturing, highlighting the reliance on timely arrivals of raw materials.
The importation of active pharmaceutical ingredients (APIs) — notably, 48% of which come from India — is crucial for the production of medications, including the high-demand weight-loss drugs. European-manufactured APIs also enter the U.S. through East Coast ports, further underscoring the strike’s potential to disrupt supply chains.
Eli Lilly, which manufactures Mounjaro and Zepbound, has been expanding its production facilities in the U.S. and Ireland but depends on APIs from Swiss manufacturer Corden Pharma for tirzepatide. Novo Nordisk sources some APIs for Ozempic and Wegovy from external suppliers, with semaglutide being a shared component for both drugs.
The Biden administration and state governments, including New York, are closely monitoring the strike’s impact on medical supplies. Leadership at the Department of Health and Human Services met with various stakeholders to evaluate the situation. Preliminary assessments suggest limited immediate impacts on consumers, with contingency plans being developed.
Additionally, the East Coast ports play a vital role in importing generic medicines from India. Hurricane Helene has further exacerbated supply chain challenges, particularly in North Carolina, where Baxter International’s facility, supplying 60% of the U.S. market for IV fluids, sustained damage.
Governor Kathy Hochul of New York pledged efforts to ensure the continuous supply of essential goods amid the strike. Alternative suppliers like ICU Medical and B. Braun may not compensate for the shortfall quickly.
Mirko Woitzik, Director of Intelligence Solutions at Everstream Analytics, pointed out the potential resemblance to the shortages experienced post-Hurricane Maria. The Alliance for Chemical Distribution warned of severe delays and uncertainties at U.S. ports, while Exiger’s CEO, Brandon Daniels, emphasized the critical importance of securing high-value and essential medications through air freight.
Daniels also highlighted concerns about existing shortages and the need to source important APIs and precursors for various medications. Consumable products necessary for disaster relief, such as sterile gloves and medical plastics, are also processed through these impacted ports.
