The U.S. government has filed with the World Trade Organization to withdraw certain medicines and their precursors from WTO Government Procurement Agreement, or GPA, rules, Inside Trade reports. In broad terms, the GPA requires government contracts to be put out for tender without prejudice to a bidders' domicile.
The move is not a surprise given the Trump administration's attempts to onshore purchases of critical medical supplies in the wake of COVID-19 as well as its earlier demonstrated antipathy towards the WTO.
While the Biden administration may be more likely to improve relations with the WTO, including reform of dispute settlement, it has also made a clear commitment to onshoring medical supplies, as discussed in Panjiva's research of Nov. 10.
Panjiva's analysis shows that U.S. imports of medicines needed to treat COVID-19, as defined by the U.S. International Trade Commission at the HS-10 level, were 8.3% lower in October than a year earlier. That was an outlier among medical supply imports with shipments of protective equipment having improved 83.2% while shipments of diagnostic equipment and materials rose 40.2%.
It is worth noting, however, that on a sequential basis, imports of COVID-19-related medical products in total declined sequentially in October for a second month, suggesting a slowdown in supply chain activity despite the continued spread of the pandemic.
Imports of vaccines and other immunological drugs had started to pick up in October with a 17.1% year-over-year increase following a decline since March, Panjiva's data shows. The downturn in total pharmaceutical imports flagged above was due to a 20.5% slide in imports of antibiotics as well as other drugs.
Most of the supplies of SARS-CoV-2 vaccines are likely to be produced in the U.S. and a shortage of supplies globally may make it unlikely that challenges to the U.S. GPA action will emerge in 2021. Yet, in the longer term as vaccine supply chains settle down there may be an increased controversy. Leading shippers of vaccines and immunologicals to the U.S. in the 12 months to Nov. 30 included GlaxoSmithKline PLC and Merck & Co. Inc.
Christopher Rogers is a senior researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.