Iran Strait closure raises concerns over US generic drug supplies

The closure of the Strait of Hormuz by Iran has created a potential threat to the supply of generic drugs in the United States, as disruptions ripple through global pharmaceutical supply chains.

The risk stems in part from the US reliance on India, which provides approximately 47% of generic prescriptions. India depends heavily on the Strait for importing petroleum-based manufacturing inputs and exporting finished medicines, says CNBC.

Petroleum derivatives are a key component in many widely used drugs. Acetaminophen, for example, is derived from phenol, a petroleum product, while glycerin, used in various formulations, is also petroleum-based.

The disruption is not limited to medications. It also affects the production of essential medical supplies such as insulin syringes, nitrile gloves and ointments that require petroleum by-products.

Experts say there is currently no immediate reason for consumer panic, but warn the situation could evolve into a significant health issue if the disruption persists.

Most medical distributors maintain a 30- to 60-day supply of medications to cushion short-term shocks. Some Indian pharmaceutical trade groups indicate companies may hold inventories lasting three to six months.

However, strains are already emerging in freight markets. Air cargo rates from India have risen between 200% and 350%, while shipping delays are raising concerns over maintaining "cold-chain" integrity for temperature-sensitive treatments, including certain cancer therapies that require constant refrigeration.

If buffer stocks begin to run low, potentially within four to six weeks, shortages or price increases are likely to first affect high-volume generic drugs with thin profit margins. These include antibiotics such as amoxicillin, diabetes treatments like metformin, and blood pressure medications such as metoprolol.

Authorities have begun taking steps to mitigate disruptions. The US government is allowing Iranian tankers to transit the Strait to supply India, while some Indian manufacturers are investing in "reshoring" initiatives, including building production facilities within the United States to reduce reliance on global maritime chokepoints.

Despite the risks, some local pharmacists say supply chains are better prepared than in the past, pointing to the Strategic National Stockpile and resilience developed during the COVID-19 pandemic as safeguards against widespread shortages.