Pharmaceuticals Supply Chain

The Hon. F. PANGALLO (15:29): This is a matter of interest on a matter of life and death for the vulnerable in our community with chronic illnesses dependent on life-saving drugs. The case of disabled Adelaide man Tony Di Giovanni is symptomatic of Australia's disturbing reliance on imported medicines. Complex health issues arising from organ transplants and a condition known as osteomyelitis following failed surgery to his right leg have made Tony immune suppressed. He wears a moon boot and can only move on crutches. He would be at very serious risk if he contracted COVID-19.

Tony takes an array of drugs to keep him alive. One is an antibiotic called pristinamycine, which he has taken since 2007 to ward off a potentially life-threatening infection to his right leg. Pristinamycine is made in France and it requires special commonwealth health approval. However, this drug is in short supply globally and, as of today, no hospital in Australia has any stock. Tony's limited supply runs out at the end of the week and his doctors are scrambling to find an alternative treatment. His life is at stake.

This case highlights the precarious—some call it dumb—position Australia has got itself into with our national strategic stockpile of medicines and protective equipment under enormous supply pressures as a result of the pandemic. Australia imports 90 per cent of its medicines, with 57 per cent from European countries, 22 per cent from the US and about 1.7 per cent from China, but these figures mask a frightening situation in a supply chain of active pharmaceutical ingredients, known as APIs.

The US sources most of its active ingredients from China or India, which in turn sources large quantities from China. The World Health Organization estimates that China makes up about 20 per cent of the global output of active pharmaceutical ingredients, but others believe it could be more. It is believed that the US imports 95 per cent of its ibuprofen and between 40 and 45 per cent of its penicillin supplies from China. China is also the largest manufacturer of vaccines in the world, supplying about 20 per cent of the global supply.

In October 2019, the US congressional Committee on Energy and Commerce was told China had gained a chokehold over the global supply of penicillin and globally dominated the manufacture of active ingredients. The US-China Economic and Security Review Commission said that if China was to cut off its supply of drugs or APIs to the United States it could lead to a public health crisis. There would then be a dramatic domino effect, because Australia's biggest single supplier is the United States.

Democrat Congresswoman Anna Eshoo says Beijing could use US dependence for critical drugs as an economic weapon and exploit the health and safety of American armed forces and the American public. The fuse has been lit. Serious tensions now exist between the Chinese government and Australia and, to an extent, the United States. Like the Americans, this over-reliance on imported pharmaceuticals should be viewed with great apprehension and as a possible threat to our national security.

The Institute for Integrated Economic Research Australia recently reported that being at the tail end of a long global supply chain makes us extremely vulnerable to supply disruptions caused by factors like political tensions, pandemics, natural disasters, economic downturns and manufacturing problems. Australia's Therapeutic Goods Administration has acknowledged these supply chain risks and noted that at times there may not be enough of a specific medicine in the Australian marketplace, leading to potential weaknesses in supply.

The COVID-19 pandemic will only exacerbate this problem, particularly if China experiences a second wave of infections and needs to go into lockdown, which is looming with a worrying coronavirus outbreak in Beijing. The lesson to be learned here is that Australia was naive in thinking that it could still sail along almost totally reliant on other countries for our most critical health requirements.

As a matter of urgency, the federal government must look to restore some of our sovereign capability in this area while shoring up our reserves to avoid a calamitous health crisis. In the meantime, a fearful Mr Di Giovanni is praying they can find a substitute drug before it is too late for him.