Corona virus (COVID-19) outbreak - FAQ
Published on 2020-03-19 20:40:18

Corona virus (COVID-19) outbreak - FAQ

News

(last updated 31/3/2020)
As the new coronavirus spreads globally and impacts our everyday (working and private) lives, IDA Foundation remains dedicated to fulfilling its mission of bridging the gap in access to medicines. Our teams in Amsterdam, Mumbai and around the world, are working together to ensure we can continue to support our customers in this time of uncertainty. 

With an increasing number of countries applying a lock down or export restrictions as a consequence of the virus, as well as businesses in affected countries forced to (temporarily) close their operations, we are working closely with our customers to plan ahead.

We have compiled an FAQ (frequently asked questions) regarding the coronavirus, focusing on its impact on our product availability and supply chain. We will aim to keep this FAQ up to date as developments arise, but we advise to contact your IDA contact for the latest information regarding your specific orders.

For Global Fund Principal Recipients, please also see this COVID-19 Procurement and Supply Update for Principal Recipients.

In these times, please know that IDA Foundation is doing everything we can to ensure delivery of these essential health goods.  

Frequently Asked Questions (FAQs- last updated 31/3):

Q: Has the corona outbreak affected IDA's offices and warehouses?

IDA's Offices: All staff is working as usual. Our Amsterdam team members have all been working remotely since 13th March (except for 4 team members temporarily working on site). Many of our staff work remotely on a regular basis so we have all technology in place to facilitate this with no issues. Currently, the India team is also working from home (as of the 20th of March). Our country offices and local partners are all operational.

Warehouses: Our warehouses remain operational and we do not expect the IDA warehouse in the Netherlands needs to close any time soon.  IDA and its partners, including the warehouse, are labeled as ‘vital’ in the uninterrupted supply of medicines and healthcare products. This means that until further notice, the warehouse in the Netherlands will remain open for service to our customers. The situation for our warehouse in Dubai is similar.

Q: Do you still have products in stock?

Yes, IDA still has good stock availability overall but take into account that the demand is increasing daily. IDA has ordered USD 5 million in additional stock since January. For our current stock, please contact your IDA representative.

Q: Do you have an overview of COVID-19 related products that are frequently requested?

COVID-19 PPE items: Items specifically related to COVID-19 PPE are: N95 Masks, Safety Goggles, Coveralls / Isolation Gowns, Three-Layer Surgical Masks, Hand disinfectant, and Aprons. We expect that for the coming 2-3 months we will not have these items in stock, or at very low stock levels. Especially N95 and Surgical Masks will not be in stock. Related to the EU PPE Export restrictions, there seems to be a solution in sight for us as supplier to humanitarian projects. The Dutch customs has created a separate department for PPE materials, where we can apply for export licenses. We have already sent our first applications and we are following up. Customs must react (with an approval) within 5 working days after sending the application, but delays can be expected due to overall decrease in capacity at customs. IDA has set up a special team to cover the demand surge for COVID-19 PPE items and we will keep you posted on the progress.

We expect a surge in demand for certain products (contact your IDA representative for a current overview) during the course of the uptake, peak and aftercare of the COVID-19 outbreak. The total period from start to end could last up to 18 months for Europe and the US, and longer for Africa.

Q: How is the coronavirus outbreak affecting the global supply chain?

The coronavirus outbreak is badly impacting the transport industry. Airlines and shipping lines are facing severe service disruptions, resulting in a reduction in capacity.

Shipping lines: Shipping lines are facing severe service disruptions, resulting in a reduction in capacity. In general, long-term price validity is no longer honored by carriers (Air & Sea). Instead they are now working with 15-30 days rate validity, in order to limit their financial exposure. Not all lanes are equally impacted by the COVID-19 pandemic. West bound (Asia to Europe/Eastern North America) and Transpacific (Asia to Western North Americas) lanes are the most impacted so far. North-South lanes (Europe-Africa) & South-South lanes (Asia-Africa) are currently preserved and/or less impacted (capacity & rates) for the time being. Although less impacted by travel restrictions than air freight, delays might still occur on all routes due to additional health checks / quarantine periods prior to vessels being allowed into port.

We also foresee further issues/delays in port operations due to lockdown restrictions imposed by local governments.
 

Air freight: While many cargo flights are not directly affected by the COVID-19 pandemic, an increasing number of passenger flights are cancelled as a result of restrictions put in place by more and more governments. As an approximate 75% of cargo travels on passenger flights, this has a severe and immediate effect on capacity. First affecting China and Europe, most countries now have restrictions and/or quarantine measures in place affecting passenger flights. Especially in Africa, we see an increasing amount of restrictions, even for countries which have yet to report a single COVID-19 case.

IDA is actively investigating alternative carrier and freight options where possible, but the current decrease in capacity will surely lead to price increases on airfreight. We will keep you informed to the best of our ability in these constantly changing conditions.

Please note the WFP keeps an excellent overview of latest country restrictions (http://unwfp.maps.arcgis.com/apps/opsdashboard/index.html#/db5b5df309ac4f10bfd36145a6f8880e).

Q: What is the effect of the lockdown situation in India?

With the rapid spreading of the coronavirus the Indian government has taken stricter measures, resulting in (an almost) complete shutdown of the country.
Having already suspended passenger air travel up to March 31, the Indian government has since declared a complete lockdown of the country as from March 25 for a period of 21 days (up to April 15). Pharmaceutical manufacturers are negotiating with the Indian government in order to receive an exception ruling. Even though pharmaceutical and medical supplies manufacturing are considered an Essential Service most factories are shutdown, as the workforce cannot reach the factories due to the national lockdown situation.

Following several days of no transport, on the 29th March, the Indian government issued a notification ‘allowing transportation of all goods without distinction of essential or non-essential’. This measure should improve transport conditions, including the transportation of workforce to the factories. We expect to see improvements by the end of this week, and we hope this measure also results in moving the shipments that are ready at our manufacturers. We will update you as soon as we have more information on this.

What about the export restriction in place by the government of India? Does it affect certain product groups?

For the moment it concerns export from India of the following products: Paracetamol, Tinidazole, Metrodinazole, Acyclovir, Vitamin B1/B6/B12 Progesterone, Chloramphenicol, Erythromycin, Neomycin, Clindamycin, Ornidazole. Our manufacturers are applying for export permits immediately upon receipt of purchase orders. There seems to be little clarity on procedures and documentations required for obtaining Export Permits.

Since 20/3, it has been communicated that the export restrictions have been relaxed, restrictions on exports of finished formulations are removed as long as the Active Pharmaceutical Ingredients are imported before 3 March 2020. It will be monitored that the quantities of finished formulations allowed for export cannot exceed the API quantities imported prior to 3 March 2020.

Q: Can you give an example of how this is affecting Indian pharmaceutical manufacturers?

Indian ARV manufacturers are facing several challenges as a result of the current Indian lockdown in combination with the supplier situation in China, and the global COVID-19 crisis. Day-to-day operations are heavily impacted, and it is hard to ensure the supply of ARVs to various destinations. The major challenges are:

  • Procurement of active pharmaceutical ingredients (API), key starting materials (KSM), raw materials from China

The coronavirus outbreak in China had caused supply issues for Chinese drug-ingredient manufacturers, resulting in reduced production and shipments. Due to the delays at the Chinese suppliers early this year, the demand increased as a result and has led to a significant increase in the costs of key starting materials and raw materials imported from China. Additionally, due to the lockdown in India, importing from China has been disrupted and logistics services have become expensive. The movement of airplanes has been restricted, which is impacting the incoming APIs, KSMs and raw materials.

  • Production at Indian manufacturing sites

The lockdown in India has led to disruption in the supply chain of pharmaceutical production. The movement of goods and people are limited, as everyone is concerned about their health and safety. Furthermore, all the additional goods required for pharmaceutical production are facing delays, with disruptions in land and air transportation services, leading to goods being stuck in different locations.

Although few manufacturers have enough inventory of raw materials to produce the required number of drugs for the supply for the next three months, the lockdown is making the final production of these essentials difficult to complete. The plants are running with minimum work forces. It is expected to see some improvements over the weekend as the Indian government will relax the transport restrictions.

  • Logistics related to export of ARVs from India

Suppliers are only willing to quote on FOB terms due to higher land transport costs and very high airfreights (only a few airlines are operating which are charging 2 to 3 times the normal freight charges).

Warehousing constraints have increased because of the delayed pickup of goods by various procurement agencies, due to limited availability of personnel as part of health and safety precautions.

Q: Do you foresee an uptake and outbreak of the COVID-19 virus in the target countries of IDA in the next 4-16 weeks? 

A: Unfortunately, yes. We also see a potentially next wave in the autumn of 2020, meaning that we foresee a surge in demand for a large variety of products. IDA is currently preparing for this situation.

Other questions? Please contact your assigned IDA contact: