China Coronavirus outbreak update

The virus continues to spread worldwide with Italy being the latest country to identify rapidly spreading infection. While China’s reporting has been shaky at best, the spread of the virus here in the United States is very limited so far. The US has restricted travel from China and established quarantine centers around the country for cruise ship passengers and other Americans who’ve come in contact with potential carriers. With a pandemic announcement likely looming from the world health organization, the virus spread while alarming, the appropriate measures being taken are having a positive impact on its spread. The largest immediate impact beyond world health is economic in nature and we all need to be aware of that. We saw a 3 percent drop in the stock market this week as the western democracies saw large increases in cases in Italy and manufacturers start to feel the real stresses on the global market caused by supply chain disruption due to China’s attempts to get the virus spread under control. Major impacts are likely to continue and worsen as more time passes without restrictions in China being lifted on travel and business operation. One major concern is the impact on pharmaceutical supply to the United States. Large numbers of drugs used to treat serious medical conditions are manufactured or their key components are produced in China. Medicines such as antibiotics amoxicillin, doxycycline, penicillin and other’s availabilities will be impacted as China continues it’s lock down of factory workers because 90% of their sourcing is in China. Are we at disaster levels yet? No, but the indicators are there that the strong possibility of a major supply chain disruption in manufacturing and medicine/medical device production is there: Apple corporation is reporting its unable to meet revenue targets this quarter due to reduced manufacturing and sales, the US Food and Drug Administration recently advised that potential disruptions may be on the horizon, and large medical technology company Medtronics recently announced its production is affected by factory closures continuing in China. By no means is it time to panic but all of us should be aware of what is really happening and why. As the US Centers for Disease Control have recently said, we must expect more cases of the virus and the need to take actions like telework and school, social distancing etc. So far, government and non-government leaders around the world, especially in the United States, are assessing supply chain impacts as they deal with this very fluid and evolving coronavirus situation.