Medical Trade Archives - WITA

Medical Devices and the Limits of UK Regulatory Autonomy

Ryan Murphy — Thu, 05 Aug 2021 17:50:52 +0000

In his negotiations with the EU, Boris Johnson prioritised the UK’s ability to set its own rules and regulations (at least in respect of Great Britain). Yet more than five years after the UK voted to leave the EU, Johnson’s government is still struggling to articulate its vision for what it wants the UK to do differently from the EU and, more importantly, why. Medical device regulation provides an instructive example of both the opportunities now open to the UK, but also the constraints it will find itself under.

Medical devices are technologies that help diagnose or treat patients, or prevent illness without the use of drugs. They include everything from MRI scanners, hip implants and scalpel blades to smartphone apps that treat depression. The EU is currently struggling to implement a wide-ranging change in how medical devices are regulated – from the 1993 Medical Device Directive (MDD) to the 2017 Medical Device Regulation (MDR). Phased introduction of the MDR was due to be completed by May 2020, but was extended until this year due to COVID-19 pressures. This new regulatory framework is designed to ensure more thorough testing of devices before they can be used on patients, and more rigorous monitoring of performance of devices once on the market. The MDR’s implementation, however, has not gone smoothly.

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To read the full report from the Centre for European Reform (CER), please click here.

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How COVID-19 Medical Supply Shortages Led to Extraordinary Trade and Industrial Policy

Ryan Murphy — Fri, 16 Jul 2021 16:21:56 +0000

Early in the COVID-19 pandemic, a global shortage of hospital gowns, gloves, surgical masks, and respirators caused policymakers around the world to panic. This paper examines international trade in this personal protective equipment (PPE) during the crisis, with a focus on China, the European Union, and the United States. As the pandemic first hit, China increased imports and decreased exports of PPE, removing considerable quantities of supplies from global markets. For the European Union and United States, the decrease in their imports from China was not immediately replaced by increased trade from other foreign suppliers. Early shortages led to EU and US export controls on their own, domestically produced PPE and other extraordinary policy actions, including a US effort to reserve for itself supplies manufactured in China by a US-headquartered multinational. By April 2020 China’s exports had mostly resumed, and over the rest of the year its export volumes of some products surged, more than doubling compared to pre-pandemic levels. But China’s export prices also skyrocketed and remained elevated through 2020, reflecting severe and continued shortages. This paper documents these facts. It also explores these and other government actions, such as US trade war tariffs and the emergence of US industrial policy in the form of over $1 billion of subsidies to build out its domestic PPE supply chain, as well as potential lessons for future pandemic preparedness and international policy cooperation.

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To read the full working paper from the Peterson Institute for International Economics (PIIE), please click here.

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Trade Is Good for Your Health

Jude Althagafi — Wed, 30 Jun 2021 15:35:40 +0000

There is increasing need to free up medical trade to help end the COVID-19 pandemic and secure global health. Yet import tariffs, export restrictions, and other limitations on international trade in medicines and medical goods continue to confound the hopes for fulfilling this need. Indeed, added restrictions have been imposed on medical trade during the pandemic. Meanwhile, governments have accomplished little at the World Trade Organization (WTO) to help meet this need. Using trade to help fight the COVID-19 pandemic and to otherwise support global health must move to the top of the WTO agenda, with the aim of finalizing new rules to support trading for health care goods by the time of the next WTO ministerial conference in Geneva in late November 2021— and ideally, sooner.

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To read the full report by the Cato Institute, please click here.

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Lowering Prices of Pharmaceuticals: Insights for Better Procurement Strategies in Latin America

Ryan Murphy — Tue, 08 Jun 2021 17:49:55 +0000

Containing rapidly growing health care costs in the Latin American and the Caribbean region, especially amid the COVID-19 pandemic, requires an in-depth analysis of prices from a novel perspective. This paper documents hitherto understudied variations in prices paid for pharmaceuticals, equipment, and medical supplies within countries and markets. It also identifies effective procurement strategies for lowering prices within existing regulatory frameworks. The analysis uses public procurement data gathered by governments’ electronic procurement systems in nine countries and territories across the region. The data are uniquely detailed and complete, encompassing the minute detail of purchasing decisions and processes made across all regulated public entities in the study countries and territories. Traditional regression analysis and machine learning (random forests) methods are used to explain prices as a function of procurement decisions and outputs, such as the number of bidders. Based on in-depth discussions with policy makers, the paper also devises realistic policy interventions, which in turn can be used to estimate savings scenarios. First, the findings show that the prices paid vary greatly across and within countries. The latter is surprising given that the regulatory and institutional framework is largely fixed within each country. Second, a high proportion of within-country and -market variation can be explained by standard features of procurement policy implementation, such as the length of advertising tenders. Third, the explanatory models point to the potential for lowering prices across the region by about 14 percent by implementing low-level, yet impactful changes to how purchasing is done.

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To read the full report from The World Bank Group, please click here.

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Essential Goods Initiative: June 2021 Data Release

Ryan Murphy — Tue, 01 Jun 2021 16:13:36 +0000

Collection of information on changes in commercial policies for this release ceased on 20 May 2021. What follows is a short comparison of policy intervention in the essential goods sectors (food, medicines, medical equipment, and vaccines) during the first half of 2020 and the first half of this year. Interesting differences in the pattern of trade policy, subsidy, and foreign direct investment-related policy interventions have arisen and are summarised in the following table. Readers should bear in mind that there has been more time to collect information on policy developments in 2020 and that the percentages for 2021 are likely to be revised as more evidence is collected.

Policy information and related charts can be accessed below.

A brief interpretive note can be accessed below.

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To read the full report from Global Trade Alert, please click here.

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Trade policy and medical supplies during COVID-19: Ideas for avoiding shortages and ensuring continuity of trade

Sebastian Petersen-Alven — Thu, 08 Apr 2021 20:57:21 +0000

The COVID-19 pandemic has brought to the fore concerns about shortages of medical goods, including vaccines, and about the risks associated with competition for supplies. Policymakers to date have often advocated ill-conceived approaches that misunderstand the dynamics of relevant supply chains.

International mechanisms have a role in supporting properly devised national initiatives to ensure resilient supplies in times of crisis. To this end, this paper proposes a three-part framework for policy coordination, consisting of:

— Promotion of effective public health responses, including early intervention in emergencies and potential domestic rationing of key supplies.

— Specific national measures for medical goods, including revised rules on domestic and overseas procurement, de-risking of supply chains, and ‘trade facilitation plans’ to suspend tariffs and taxes and fast-track port clearances.

— A confidence-building MoU to codify key principles. Signatories would commit to joint-purchasing arrangements and data sharing on medical goods stockpiles. Swap arrangements for stockpiles should also be agreed. The MoU could be presented for adoption at the G7 summit in June 2021. It could also form the basis for a wider agreement to be announced on the sidelines of the 2021 UN General Assembly.

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To read the full report by Global Trade Alert, please click here.

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Covid-19 and the Danger of Self-sufficiency: How Europe’s Pandemic Resilience was Helped by an Open Economy

Alena Sanabria — Mon, 01 Mar 2021 16:19:59 +0000

During the Covid-19 pandemic, Europe has benefitted strongly from being an open economy that can access goods and services from other parts of the world. Paradoxically, some politicians in Europe think that dependence on foreign supplies reduced the resilience of our economy – and argue that Europe now should wean itself off its dependence on other economies. In this Policy Brief, it is argued that self-sufficiency or less economic openness is a dangerous direction of policy. It would make Europe less resilient and less capable of responding to the next emergency.

It is key that people, firms and governments can get supplies from other parts of the world. It is diversification, not concentration of production, that will make Europe more resilient when the next emergency hit. We don’t know where the next crisis will come from. Nature will throw nasty surprises at us, and we will make stupid mistakes, some of which will have devastating consequences. What we do know, though, is that we stand a better chance to fight the next emergency if we get richer and improve our technology. The best policy for resilience is one that encourages specialisation and innovation – and, when the emergency hit, allow for people to improvise in search for solutions. For that to happen, we need openness to goods, services and technology from abroad.

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To read the original policy brief from the European Centre for International Political Economy, please click here

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The Covid-19 Vaccine Production Club: Will Value Chains Temper Nationalism?

Alena Sanabria — Mon, 01 Mar 2021 16:10:39 +0000

1. Introduction*

That vaccines for COVID-19 were developed so quickly during 2020 was a welcome source of hope in an otherwise bleak year. The approval of several vaccines at the end of last year was seen by many as a turning point in the global response to the pandemic, raising expectations that the threats to public health would soon be tackled through national inoculation strategies and that, ultimately, restrictions on everyday life could be lifted (IMF 2020).

The optimism witnessed in the New Year dissipated in the face of delays to the production of COVID-19 vaccines (Harford 2021)6 and reports that mutations of the coronavirus have resulted in new “variants,” some of which pose a greater public health threat than the original strain. The former has resulted in some governments losing trust in certain vaccine manufacturers, which in turn has triggered a controversial trade policy response (Evenett 2021a). The latter has led to the realization that COVID- 19 may become a permanent threat to global public health, potentially requiring different approaches by governments and by international organizations as vaccines race against new variants of COVID-19 (The Economist 2021a).

These developments amplify the tension between policy responses that tend to be national and a virus that does not respect jurisdictional borders. In turn this has raised the risk that governments engage in Vaccine Nationalism, taken to be zero-sum steps that come at the expense of the public health of the populations of other nations (Bollyky and Bown 2020, Freund and McDaniel 2020).

Vaccine Nationalism can take the form of overt export bans or limits—that aim at increasing domestic availability of vaccines at the expense of foreign supply—or they can take less transparent but often equally effective forms. Subtle mechanisms that are available to governments of vaccine producing nations include delays in shipments and conditioning delivery abroad on imports of vaccine from other production locations (Evenett 2021a). Finger-pointing between governments in February 2021 highlighted the potential for both covert as well as overt limits on vaccine exports.

Whether the world trading system will fail its COVID-19 vaccine-related stress test will depend on the incentives confronting governments. A potentially important factor in this regard is the existing pattern of cross-border value chains involved in the production and distribution of COVID-19 vaccines. A government that pre-ordered vaccines from producers located abroad may think twice before curtailing exports of vaccines or vaccine ingredients manufactured at home.7 This is suggested by the broader hypothesis in the international trade and business literatures that the presence of cross-border value chains reduces the incentive of governments to engage in protectionism (Gawande et al. 2015;Blanchard et al. 2017, Baldwin 2018, Krugman 2018, World Bank 2020).8 Could vaccine-related value chains provide a bulwark against Vaccine Nationalism, to the benefit of populations at home and abroad? If so, during the current pandemic this particular configuration of international business would have broader societal as well as commercial benefits by inducing governments to keep trade routes open. The backdrop to these vaccine-related developments is the return of geopolitical rivalry and associated Economic Statecraft (Baldwin 1985; Aggarwal and Reddie 2020, 2021), which may color the policymaking calculus.

Recent actions and statements by large trading countries make clear that the risk of export curbs on vaccines and vaccine ingredients cannot be discounted. The purpose of this paper is to examine the degree to which international value chains implicated in the production of COVID-19 vaccines satisfy the necessary conditions to temper resort to this form of Vaccine Nationalism—between states where final vaccine manufacturers are located, between final vaccine manufacturers and producers of vaccine ingredients, and between states within and outside the COVID-19 vaccine value chains.

We use information from detailed regulatory filings to identify the key ingredients of COVID-19 vaccines, other ingredients that are used in vaccine production, and selected products used for distribution (Annex Table 1). We then draw upon a number of commerce-related data sources—monthly customs data for the EU, annual global trade flows data from UNCOMTRADE, and firm-level data on pharmaceuticals’ headquarters and affiliates from Orbis—to obtain a picture of the supply chain of COVID-19 vaccines. The data clearly point to high concentration and self-reliance in COVID-19 vaccine production among a group of 13 countries9 that we refer to as the “COVID-19 Vaccine Producers’ Club” or simply the “Vaccine Club”.10 These countries are not only where the headquarters of the companies currently producing COVID-19 vaccines are found—they are also where 91% (783 out of 857 subsidiaries worldwide) of the subsidiaries of these companies are located. They also account for 60% of total confirmed advance purchasing agreements with pharmaceutical companies for vaccine doses.

The trade data show that vaccine producers are both the main source and destination of exports of COVID-19 vaccine ingredients, especially when we narrow down the analysis to key ingredients. Trade data for the 2017-19 period show that vaccine producers sourced 88.3% of key ingredients from other vaccine producers. The shares of imports of key ingredients from other vaccine producers as a group ranged from a low of 76.4% (India) to 98.7% (United Kingdom). In contrast, 68% of vaccine producers’ imports of all goods came from the Vaccine Club. The two top exporters of key ingredients are the United States and the European Union, which accounted for half of total exports, followed by United Kingdom, Japan and China with significantly smaller shares. Monthly data for the European Union show that extra-EU imports and exports of vaccine ingredients took off sharply from the second quarter of 2020. Extra-EU imports grew faster from vaccine producers than from non-vaccine producers, strengthening the dependence of the European Union on the Vaccine Club—a pattern that would most likely apply to other vaccine producers as well.

What are the implications of the current structure of the COVID-19 supply chains for trade policy and the production and distribution of vaccines worldwide? To differing degrees, members of the Vaccine Club have leverage over other members; that is, they can retaliate along the COVID-19 vaccine supply chain. Governments outside this club, which constitute the overwhelming majority of nations, have no such leverage. However, other options are available to the latter nations (a statement of fact rather than an endorsement, as will become clear.) The existence of differential options may account for differences in how governments across the world react any outburst of Vaccine Nationalism, the risk of which will remain so long as glaring excess demand for COVID-19 vaccines remains unmet.

Our analysis yields four types of recommendation for both the private sector and the public sector. Although trade policies are implicated and should be carefully monitored, trade policy alone cannot eliminate the shortages of COVID-19 vaccines. We urge that particular attention be given to the private sector incentives involved, including the way government policies affect those incentives and have been shaped by unfortunate legacies from the past. We also identify a critical coordination problem that the creation of a clearing house could alleviate. The transfer of tacit knowledge—as opposed to ceding codified knowledge in the form of patents—between vaccine creators and vaccine manufacturers has been identified by numerous experts as essential to ramping up COVID-19 vaccine production. We therefore discuss means by which that knowledge can be transferred and the attendant capabilities of developing countries nurtured. As such, our approach departs from those seeking to suspend certain multilateral trade disciplines on intellectual property rights.

Our focus on the location of producers of COVID-19 vaccines and their ingredients, and on the resulting international trade between nations, addresses only one facet of the global distribution of vaccines needed to quell the current pandemic. Other recent analyses have emphasized different aspects of the global distribution of vaccines including transportation and trade facilitation challenges (ADB 2021; OECD 2021); the role of national and international intellectual property rights regimes (Abbott and Reichman 2020; Mercurio 2021; Nicholson Price, Rai, and Minssen 2020); allocation, affordability, and deployment of vaccines (Wouters et al. 2021); and the incentives created when procuring vaccines (Ahuja et al. 2021).11

Moreover, the ongoing race to develop and ramp up production of vaccines should be seen in light of longstanding concerns about the strength of private sector incentives to develop vaccines (Xue and Ouellette 2020) and the legacy of societal responses to previous pandemics, including the influenza A (H1N1) pandemic of 2009-10 and the West African Ebola virus epidemic of 2013-16. As will become evident, actions taken during the latter two episodes are likely to have influenced public and private sector decision-makers this time around.

The remainder of this paper is organized as follows. The next section outlines the current risks of policy-induced delays to vaccine exports and finds them credible. The third section deploys empirical evidence consistent with the existence of a club of COVID-19 vaccine producers. The fourth section discusses the policy implications of such a club and infers several implications for policy and the design of international cooperation. Concluding remarks on the impact of cross-border value chains on Vaccine Nationalism are offered in a final section.

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To read the original report from the World Bank Group, please click here

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Covid-19 Demand Shock and Preparedness Response

Caroline Hillier — Mon, 21 Dec 2020 17:08:59 +0000

As the U.S. economy restarts and retools after the forced shutdown induced by the Covid-19 pandemic, there is a strong drive in Congress and the executive branch to improve the resilience of medical supply chains. The Covid-19 pandemic caused an unprecedented demand for certain medical goods, including pharmaceuticals, personal protective equipment, and medical devices. Manufacturers in the medical supply sector, the U.S. government, and foreign governments are likely to embrace new policies aimed at readjusting global supply chains to address vulnerabilities that have come to light. These changing circumstances present a new opportunity for the United States to reinvigorate trade relations with allies, free trade agreement partners, and trusted supplier countries. However, the newfound attention on medical supply chain resiliency has created dangerous momentum for a policy focused on reshoring supply chains. Policymakers should instead opt for an approach that builds resiliency through diversification, trust, and communication. Just as the pandemic experience revealed vulnerabilities in global supply chains, it also proved that no single country can produce all that it needs to fight Covid-19, let alone cure it. This paper breaks down CSIS recommendations for a trusted trade partner network to support international cooperation and respond to new global challenges.

This report is made possible through the generous support of Gilead Sciences, Inc.; Pfizer, Inc.; and the U.S. Chamber of Commerce.

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To view the original report, please click here

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COVID-19 and Domestic PPE Production and Distribution: Issues and Policy Options

Rachel Accorsi — Mon, 07 Dec 2020 17:08:11 +0000

COVID-19 and Domestic PPE Production and Distribution: Issues and Policy Options

The novel Coronavirus Disease 2019 (COVID-19) and its rapid emergence as a pandemic have highlighted issues relating to the production and distribution of personal protective equipment (PPE). PPE refers to worn articles or equipment that help minimize exposure to various hazards, including infectious pathogens. Given the role that PPE plays in mitigating the spread and reducing the impacts of COVID-19, PPE demand has spiked both globally and domestically while supply has been undercut by both rapid consumption as well as supply chain disruptions. According to multiple federal agencies, including the Government Accountability Office, the Food and Drug Administration, and various independent organizations, PPE continues to be in short supply, which has led to broad congressional and public interest in PPE production and distribution issues. The availability of effective PPE is critical to the ongoing pandemic response, but also has broader public health, emergency preparedness, and national security implications.

This report considers aspects of domestic production and distribution of PPE in the context of the COVID-19 pandemic. Specifically, the report considers (1) the availability of PPE supplies, including an assessment of PPE demand related to the COVID-19 pandemic; (2) federal actions and activities undertaken to increase PPE supplies in response to the pandemic, organized by executive agency and program; and (3) other policy options under consideration concerning PPE production and distribution, also organized by executive agency and program.

Overall, this report notes that data limitations and conflicting accounts impede the complete assessment of PPE supply chains, and this may undermine federal (as well as nonfederal) efforts to respond effectively to the COVID-19 pandemic. To the extent that data is available, current PPE production and distribution channels appear to continue to be insufficient compared to reported need. Various mechanisms that may be utilized to increase PPE supply or productive capacity, such as the provisions in the Defense Production Act of 1950 (DPA), appear to be applied selectively, and implemented unevenly, potentially based on narrow experience and limited administrative infrastructure within the federal government to oversee and manage its use in a national emergency context.

To download the full report, please click here.

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Michael H. Cecire is the Coordinator of this reports and an Analyst in Intergovernmental Relations and Economic Development Policy for the Congressional Research Service.

Agata Bodie is an Analyst in Health Policy for the Congressional Research Service.

Frank Gottron is a Specialist in Science and Technology Policy for the Congressional Research Service.

Victoria R. Green is an Analyst in Health Policy for the Congressional Research Service.

L. Elaine Halchin is a Specialist in American National Government for the Congressional Research Service.

G. James Herrera is an Analyst in U.S. Defense Readiness and Infrastructure for the Congressional Research Service.

Erica A. Lee is an Analyst in Emergency Management and Disaster Recovery for the Congressional Research Service.

Heidi M. Peters is an Analyst in U.S. Defense Acquisition Policy for the Congressional Research Service.

Andres B. Schwarzenberg is an Analyst in International Trade and Finance for the Congressional Research Service.

Kavya Sekar is an Analyst in Health Policy for the Congressional Research Service.

Michael D. Sutherland is an Analyst in International Trade and Finance for the Congressional Research Service.

Karen M. Sutter is a Specialist in Asian Trade and Finance for the Congressional Research Service.

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