After 'initial shock,' generics supply chain likely to weather COVID-19 blows

The specter of global drug shortages looms large amid the coronavirus pandemic. But so far, the supply chain is holding steady and prices are going up—in the generic drug business, at least. One analyst, in fact, figures COVID-19 could turn out to be a profitable time for the generics industry.

After some "initial shocks" from COVID-19, the global generic drug supply chain is likely to rebound and deliver strong growth numbers despite some potential "spot shortages," including a med President Donald J. Trump touted as a possible treatment, Bernstein analyst Ronny Gal said in a note to investors Wednesday.

A potent mixture of patient and channel stockpiling and manufacturer "allocation" measures will drive generics pricing upward in the short term, Gal argued, and could have a "lasting positive impact" on the industry in future quarters.

One drug where that rule might not hold true? Hydroxychloroquine, the COVID-19 hopeful that Trump touted in combination with azithromycin as potentially "one of the biggest game-changers in the history of medicine" in a tweet. With demand rising for access to hydroxychloroquine, a malaria med that has long been generic, Gal estimated that the global supply would be around 10% of what is needed if the drug is found effective to treat COVID-19.

But first, the malaria med has to show it can effectively treat COVID-19, and so far the results have been mixed.A small-scale study in China found that adding hydroxychloroquine on top of conventional therapy didn’t shorten the time to SARS-CoV-2 clearance in a 30-patient trial. No significant differences were observed across the two arms in terms of the time it took to bring body temperature to normal or the number of patients with disease progression as shown in CT scans.

However, most patients in the study's control group were actually treated with other antiviral therapies at the same time, including AbbVie’s HIV combo med Kaletra and flu drug Arbidol, complicating the study's conclusions on hydroxychloroquine's effects.