Australia’s Medicine Supply: A Case Study in Security and Resilience?

02/16/2020

The Institute for Integrated Economic Research – Australia has just released a report looking at Australia’s medical supply chain.

The report notes that “Australia imports over 90% of medicines and is at the end of a very long global supply chain making the nation vulnerable to supply chain disruptions.

Recently, I had a chance to talk with the founders of the Institute, Air Vice-Marshal (Retired) John Blackburn and Anne Borzycki.

It is very appropriate that we are publishing their interview and highlighting their report, for the launch point of their focus on this subject was our own work with Rosemary Gibson, who has done the pioneer work on the critical question of supply chain vulnerabilities for the United States.

Question: How did you get interested in this subject?

Answer: Having read on your website about Rosemary Gibson and then had the opportunity to speak with her about her book, we decided to examine the Australian medical supply chain. Rosemary has highlighted the key dependencies which the United States has upon China in terms of the medicine supply chain and the impacts on national security.

We examined the Australian case and found we have a similar problem but very few people have focused on it. An exception was Dr Simon Quilty who wrote an article in 2012 where he focused on the need for the Australian Regulator, the Therapeutic Goods Administration, to make it mandatory to have companies report medicine shortages.

We reached out to Simon regarding his article whilst he was visiting the UK studying their National Health system.  Following our discussions, he subsequently met with Rosemary Gibson in the United States to discuss her book and and he is now a Fellow of our Institute as well as a co-author of our report.

Question: What have you discovered in your research?

Answer: We found that Australia imports over 90% of the medicines Australians consume and that we are at the end of a very long global supply chain that makes us vulnerable to supply chain disruptions.  The Australian Therapeutic Goods Administration has itself acknowledged these supply chain risks when they reported that, at times, there may not be enough of a specific medicine in the Australian marketplace, leading to potential weaknesses in supply.

We concluded that Australia is particularly vulnerable to medicine shortages arising from factors outside our control.  These factors can include manufacturing problems, difficulties in procurement, political instability, pandemics, another global economic crisis and a range of natural disasters.  The current Coronavirus emergency is an example of this.

In effect we have incrementally outsourced almost all of our medicine supply chain to the global market.  We import a significant proportion of our medicines from the United States but, as Rosemary Gibson has underscored, a significant component of US medicine supplies come from China.

So, we suffer from the same problem described by Rosemary, i.e. we import from the United States which has itself ignored the vulnerability of its supply chain arising from its significant dependence on China for the manufacturing of medicines.

This dependence has been described in US Congressional Commission hearings as a risk to US national security.

Whilst Australians embrace free trade, it does not look like we have a level playing field.

We could see from Rosemary’s investigation that the Chinese Government, by using its financial power, has shaped the market by undercutting the US pharmaceutical industry.  We were surprised to learn that China is fast becoming one of the leading manufacturers of pharmaceuticals and the Active Pharmaceutical Ingredients (commonly referred to as APIs) that go into medicines.

The next challenge we found was to try to understand the medicine supply chain.  It has been difficult to analyse Australia’s medicine supply chain risks given the limited information available to the public.

Clearly this is not a problem confined just to Australia.

As was noted in 2019 by the US Government’s US-China Economic and Security Review Commission, supply chains are not understood, vulnerabilities are not fully understood and no one agency seems to have responsibility or accountability.

Question: What can be done?

Answer: Let us return to the efforts of Dr. Quilty. He has argued for the need for mandatory reporting on drug labelling and accurate information on critical medicine supplies.

This is a great first step.

However, whilst such reporting is now occurring in Australia, we cannot see much, if any, action being taken by the Government to address the medicine supply chain vulnerabilities.

Scandinavian countries seem to be better organized that we are. There is a good example from Finland discussed in our report.  Like most nations, Finland has strategic stockpiles of key drugs and hospital supplies for what their Ministry of Defence calls ‘disruptive situations’ and ‘exceptional circumstances’.

However, the Finnish government has also recognized that these stockpiles are becoming increasingly reliant on imports and they see this as a risk to national security.  Furthermore, they recognize that the restructuring of the pharmaceutical industry may have a detrimental effect on Finland’s security of supplies in the future, especially as Finland is ceasing production of infusion fluids and vaccinations.  Finland recognizes this risk and acknowledges that options need to be explored to mitigate future vulnerabilities.

What we are trying to do with our report is to get the Australian people, and in turn our Government, to recognize the risks to our medicine supply chain and to acknowledge that options need to be explored to mitigate future vulnerabilities.

Question: You noted in your report that the Australian Therapeutic Goods Administration has mandated new medicine labelling requirements, but they do not require labelling of country of origin.  

Isn’t your earlier point that country of origin is not enough if the exporting country is not clearly indicating the SOURCE of their supply rather than being simply a transit point for re-export?

Answer: That is clearly a key part of the challenge.

We need to focus on building an approach which ensures security of supply.

To do that the supply chain must be transparent, all the way from ingredient supply through medicine manufacturing to the consumer.

Apart from not knowing where the APIs or specific medicines have been sourced, we in Australia have not done a comprehensive risk analysis of our Maritime Trade supply chains; that in a country that depends on maritime trade for 98% of its imports (by volume.)

Australia has almost no capacity to manufacture any active pharmaceutical products or most of the products listed on the World Health Organization list of essential medicines. We simply do not understand the risk to our national security by focusing primarily on lowest cost.

The lowest cost can come at a high price …

Question: What are the next steps to deal with the situation?

Answer: The US Congress has raised some fundamental questions about the current Chinese dominance situation.

We would like our Parliament to join in this effort, and to sort through practical steps to ensure medical supply security.

Question: Perhaps the Gibson focus on building national capacity for core ingredients which allows for ramp up of medicines to ensure supply of essential medicines in a crisis might make sense for Australia?

Answer: It does.

But any case, we need to build out national production capabilities and to build resilient reliable supply chains with partners.

This can only be done with a clear policy of transparency about countries of origin for medicines, as well as ensuring that we can produce essential drugs in a crisis, whether due to natural disaster or political manipulation by authoritarian powers.

Editor’s Note:  We recently interviewed Rosemary Gibson with regard to her recommendations about how to launch a proper response.

According to Gibson: “We’d have to see how much capability there is organizationally there is in the United States to ensure essential medical supply production and otherwise to actually do the work because we’re talking about thousands of medicines and many different kinds of active ingredients. It’s not going to happen overnight.

“That’s why we should start with those essential medicines that are core to any national health security and national security.”

She concluded: “We need a system just like we do for energy supplies and good commodities.

“We need an entity within the Federal government that does this tracking and projection of those vulnerabilities of global supply and demand current production levels for certain medicinal products so we can be prepared and know if this is shutting down what’s our alternative?”

See also the following:

Dealing with the Chinese Challenge: The Case of the Pharmaceutical Industry

The New Warfare: Rethinking the Industrial Base for National Defense and Security

And for recent stories which highlight the challenge facing the European Union as well as India, see the following:

https://newseu.cgtn.com/news/2020-02-14/EU-health-ministers-warn-COVID-19-could-lead-to-drug-shortage-O3JmH5XRyo/index.html

https://www.newkerala.com/news/2020/23876.htm

 

Deterrence in Depth: From Japan to Amarillo, the Case of the Osprey

02/14/2020

We have highlighted in our work both on Pacific and European defense, the importance of shaping a deterrence in depth strategy to deal with the 21st century authoritarian powers.

Such a strategy is facilitated by global partnerships, which allow for enhanced interoperability, and in some cases operating core innovative platforms in common.

The Aegis global enterprise has been one example; the F-35 global enterprise another. Now the Osprey by adding the Japanese to the force, and by expanding the users of the platform to include the US Navy with its CMV-22B, are augmenting the fleet and shaping global reach for the platform.

This will also drive the need for enhance global support to ensure that the platform can contribute more effectively to deterrence in depth.

In a July 9, 2014 article, I highlighted the way ahead for Japan and the coming of the Osprey to the JDF.

“When we wrote our book on Pacific strategy, a key element in considering how the key challenges facing the United States and its allies was how Japanese relationships with the US and the Pacific allies might evolve.

“The entire second section of our book deals with Japan, and after a history of the relationship, which was largely, the work of Dr. Richard Weitz, we focused on where Japanese defense policy might evolve in the coming years. We argued that with the emergence of the “dynamic defense” approach Japan would reach out to shape new capabilities to provide for perimeter defense and to plus up its working relationships with allies in the region.

“We argued that:

The Chinese seem bent on driving the two greatest maritime powers of the 20th century together into a closer alliance.

And at the heart of this alliance are key joint investments and procurement working relationships.

Japan is a key technological partner for the United States throughout. They are a founding member of the Aegis global enterprise.

They are an investor and operational partner in the SM-3 missile capability to enhance missile defense.

They are a major player in the F-35 program, which will allow the shaping of an attack-and-defense enterprise.

They are building a final assembly facility for the F-35, which will become a key element in the F-35 global procurement system, subject to Japanese government policy decisions.

And they are keenly interested in seeing how the Osprey can shape greater reach and range for the “dynamic defense” of Japan.1

Recently, when I visited Amarillo, Texas for the ceremony officially launching the CMV-22B into the Navy fleet, I had a chance to tour the line. And on the line were several Ospreys being prepared for the Japanese Self Defense force.

Part of the reshaping of the JDF strategy is to push the perimeter of their defense capabilities, and to be able to defend their outer islands, and to operate more effectively as an amphibious force. Both the F-35B and the Osprey are being procured as part of enhanced capabilities to provide for perimeter defense.

In other words, deterrence in depth for Japan reached back into the Bell factory in Amarillo.

This means that the work force of Amarillo is, in effect, a key contributor to the defense of a core ally.

The Osprey is one of the most complex airplanes ever built and requires highly skilled workers to craft such an outcome.

At the ceremony held on February 7, 2020, the Commander of the Fleet Logistics Multi-Mission Wing 1 or COMVRMWING, which had been stood up on Oct. 10, 2019 to manage the CMV-22B entry into the fleet, Captain Dewon “Chainsaw” Chaney emphasized how he saw the importance of the workforce to his mission.

“I would like to first acknowledge the artisans that put this fine machine together. I visited the Bell factory on Wednesday and had a brief walkthrough of this factory yesterday.

“This is an incredibly complex machine that you have built, and I am in awe of your precise talent, and even more inspired by the magic that makes it fly,” Captain Chaney said.

Before the ceremony, I was fortunate to have the Mayor of Amarillo, Ginger Nelson, sit next to me, and she graciously allowed me to visit her at her office in the afternoon for an interview.

And my core question was simple: Why Amarillo?

From where are these skilled workers coming from, and why is Bell here?

“Because we want Bell here, because we have a tremendous workforce here in the Texas Panhandle,” Nelson said.

“We are a city fed by the small-town rural communities that surround our region.

“Our people are only one or two generations from having grown up on a farm or having owned their own small business.

“And the work ethic for our people is simply: if you are not doing it, it is not going to get done.

“Our work ethic is strong; and patriotism is a core value in the Texas Panhandle.

“For Bell, this means that they need to produce a highly complex aircraft, and they can rely on the ethics, commitment and competence of our workforce dedicated to defend our country by building these machines.”

“The culture that Bell brings with its innovation mixes well with our rural roots,” Nelson said. “The people that work at Bell are leaders in our community in many other ways – on the Chamber of Commerce and many nonprofit boards.”

“We rely on Bell to bring leadership and innovation into our community. Bell relies on us to supply dedicated, competent workers who are ready to meet the responsibilities that include the defense of our nation.”

Going from the delivery to Japan for its latest aircraft to Amarillo, that is what I would call truly deterrence in depth.

And for the Chinese government, I would warn you to not mess with Texas.

Editor’s Note: In the video below, produced on July 31, 2018 by Channel 10, Amarillo, Texas in July 31, 2018, a test flight by Bell of their V-280 was highlighted by both the Lt. Governor of Texas and by the Amarillo Mayor. 

V-280 Amarillo 2018 from SldInfo.com on Vimeo.

Lt. Governor Dan Patrick views the company’s involvement in Amarillo as a success.

“The fact that Amarillo had the foresight to say, ‘we are going to invest in Bell and bring Bell here’,” said Lt. Governor Patrick. “It is really a tribute to the forward thinking of the people of Amarillo.”

A military contract could spell huge economic growth for the area. If granted a contract, Bell plans to build 120 to 150 V-280 aircraft every year.

“We have over 800 direct jobs here at the plant,” said Amarillo Mayor Ginger Nelson. “But, we have over 5,000 indirect jobs related to the work Bell does in our community. When you begin to look at the potential army contract for the V-280, it is a huge impact.”

Mayor Nelson said a contract would also bring recognition to the Panhandle.

“When all that comes together to have a national and worldwide impact for us, and we here in Amarillo played a part in that,” said Mayor Nelson. “It makes me extremely proud of our workforce here in Amarillo as well as our vision for the economic impact that Bell has in our community.”

Lt. Governor Patrick said big businesses investing in small towns is what keeps Texas,Texas.

“When you think about Texas, you think about towns like Amarillo, and it’s important that we keep them vibrant,” said Lt. Governor Patrick. “We know that most of the population is going to be in the triangle of Dallas, San Antonio, Houston and then now Austin with that corridor, that’s where most of the growth is. But it’s important we attract businesses to our towns in rural Texas to keep these great cities, and communities alive.”

Lt. Governor Patrick hopes more people are inspired by Bell and more areas will receive business that can help local economic growth.

The above comes from the article by Mike Makie published on July 31, 2018.

For the full interview with Mayor Ginger Nelson, see the following:

Why Amarillo? Mayor Ginger Nelson on the Amarillo Community and Bell

 

 

 

 

 

 

 

 

158th Fighter Wing trains in Florida

02/13/2020

Over 100 Airmen assigned to the 158th Fighter Wing depart for training known as South Lightning at Eglin Air Force Base, Florida, from the Vermont Air National Guard Base, South Burlington, Vt., Jan. 23, 2020.

SOUTH BURLINGTON, VT, UNITED STATES

01.23.2020

Video by Master Sgt. Michael Davis and Julie Shea

158th Fighter Wing

Aero Med Evacuation History

Achievements in aerospace medical capabilities and advances in aeromedical evacuation have transformed the Air Force Medical Service into a world-class operation for service members ill or injured in wartime.

See the major milestones throughout the evolution of aeromedical evacuation and the impact each has made in advancing wartime medicine and caring for patients.

01.02.2019

Video by Josh Mahler

Air Force Medical Service

12 Years and Counting: Still No Operational New Tanker for the USAF

02/11/2020

In a story published on February 29, 2008. the award of the new tanker contract to Northrop Grumman was highlighted by a USAF article.

WASHINGTON (AFPN) — Secretary of the Air Force Michael W. Wynne and Vice Chief of Staff of the Air Force Gen. Duncan J. McNabb announced the selection of Northrop Grumman as the winner of the KC-X competition for development and procurement of up to 179 tanker aircraft for approximately $35 billion.

The initial contract for the newly named KC-45 is for the system design and development of four test aircraft for $1.5 billion. This contract also includes five production options targeted for 64 aircraft at $10.6 billion.

“The tanker is the number one procurement priority for us right now,” General McNabb said.  “Buying the new KC-45A is a major step forward and another demonstration of our commitment to recapitalizing our Eisenhower-era inventory of these critical national assets. Today is not just important for the Air Force, however. It’s important for the entire joint military team, and important for our coalition partners as well. The KC-45A will revolutionize our ability to employ tankers and will ensure the Air Force’s future ability to provide our nation with truly Global Vigilance, Reach, and Power.

“It is the first step in our critical commitment to recapitalize our aging fleet to move, supply and position assets anywhere. In this global Air Force business, the critical element for air bridge, global Intelligence, surveillance and reconnaissance and global strike is the tanker,”  he said.

The KC-45A will provide significantly greater air refueling capabilities than the current fleet of Eisenhower-era KC-135 Stratotankers it will begin replacing. For example, it will be able to refuel Air Force and Navy aircraft on every flight. These aircraft have different systems for receiving fuel and today, KC-135s must be set up for one or the other before takeoff. 

The KC-45A will be equipped for both systems on every flight and also will have connections for wing pods. When wing pods are installed, it can refuel two probe-equipped aircraft, such as those flown by Navy and many allied aircrews, at the same time. The KC-45A can even be refueled in flight by other tankers.

The KC-45A also will have defensive systems that allow it to go into dangerous environments that tanker aircrews currently have to avoid. It will also supplement the airlift fleet by carrying cargo, passengers and medical patients in a secondary role.

The KC-X source selection used a “best value” determination to select a winner based on five factors: mission capability, proposal risk, past performance, cost/price and an integrated fleet air refueling assessment — performance in a simulated war scenario. These five factors were developed after consulting with industry and were finalized prior to starting the competition. Considered together, these grading criteria ensured the Air Force maximized the capability delivered to the warfighter while optimizing the taxpayers’ investment.

Air Force officials followed a carefully structured process, designed to provide transparency, maintain integrity and promote fair competition. Air Force officials met with offerors on numerous occasions to gain a thorough understanding of their proposals and provide feedback on their strengths and weaknesses. Officials also provided insight into government cost estimates throughout the process instead of waiting until the post-decision debrief.  The competitors indicated they’ve been very pleased with the degree of communication.

The evaluation team comprised experts covering a broad spectrum of specialties from acquisition to operations and was hand-picked from across the Air Force and other government agencies. 

As part of the process, Air Force officials will now provide a written notice to both the selected and not-selected and offer to provide a debrief on their bid proposals. To maintain the integrity of that process, officials will be unable to provide additional information about the proposals and contract.

“Today’s announcement is the culmination of years of tireless work and attention to detail by our acquisition professionals and source selection team, who have been committed to maintaining integrity, providing transparency and promoting a fair competition for this critical aircraft program,” Secretary Wynne said. “Through these efforts, we believe we will provide a higher-value resource to the warfighter and the taxpayer.” 

That was then and after various tanker acquisition dynamics, here we are 12 years later and no new tanker. 

Not only that, we will have to wait THREE MORE YEARS for the delivery of the new tanker to the operational USAF.

In an article by Brian W. Everstine published on February 10, 2020, we learn that the USAF will further reduce its tanker fleet while waiting for the troubled Boeing tanker.

The Air Force wants to retire 28 legacy tankers, even though the KC-46 is years away from operational capability.

“The bottom line is: To try ensure we have the capabilities we’re going to need in the future, we’re going to have to take some risk,” Maj. Gen. John Pletcher, the Air Force deputy assistant secretary for budget, said in a Feb. 10 briefing. “We can’t continue to fund everything … that we have in our force today without eventually having to make some tough choices, so this budget does that.”

The Air Force’s budget request calls for retiring 16 KC-10 Extenders from the Active Duty fleet, eight KC-135s from the Active Duty, and five KC-135s from the Reserve. These tankers will be the oldest and least capable, according to the Air Force. At the same time, the service plans to spend about $2.85 billion on 15 new KC-46s, along with $24 million in modifications and $106.3 million in research, development, test, and evaluation.

The KC-46 fleet has been plagued by problems, especially with its Remote Vision System, which links the boom operator to the refueling system. Air Force leaders have said the problems with the RVS and Boeing’s slow progress toward fixing it means the KC-46 will not be deployable for at least three years.

Lest you were wondering, many of our allies do not have this problem as they are operating the advanced Airbus tanker, and in the case of the RAAF, for many, many years.

Collectively, the global fleet of Airbus tankers has logged more than 125,000 flight hours and has been acquired by eight customers worldwide. The first KC-30A aircraft was accepted by the RAAF in June 2011 and the maiden flight was performed in September 2011, The RAAF took its second KC-30A in September 2011 and its third in November 2011.

KC30A Over Iraq from SldInfo.com on Vimeo.

Let us see.

The USAF selected its variant of the A330MRTT in 2008, 12 years ago.

The RAAF RECEIVED its new tanker sin 2011.

And the USAF is projected to get their new Boeing air tanker in 2023.

Not exactly agile contracting and delivery.

The featured photos shows an Australian KC-30A Multi Role Tanker Transport (MRTT) from 33SQN, operated by the Aircraft Research and Development Unit, conducts aerial refueling compatibility flight testing over the Atlantic Ocean with a United States Navy P-8A Poseidon from Air Test and Evaluation Squadron Two Zero.

The featured video shows AIRMSHL Geoff Brown joining KC-30 flight over Iraq

Air Marshal Geoff Brown, then AO, Chief of Air Force talks about Air to Air refueling operations in the Middle East Region.

He highlighted the significant reliability of the tanker and its contribution. The Aussies have been operating 1 tanker from 33rd squadron and it has delivered more than 20 million pounds of fuel over its 6-7 months in the Iraq operations. While Brown was onboard, the Aussie tanker is seen refueling USMC hornets from VMFA-232, the “red devils: based at Miramar.

Australia’s Air Task Group (ATG) as part of Operation OKRA comprises six RAAF F/A-18A Hornets, an E-7A Wedgetail Airborne Early Warning and Control aircraft and a KC-30A Multi-Role Tanker Transport aircraft.

Nearly 400 personnel have deployed to the Middle East as part of, or in direct support of the ATG.

Operation OKRA is the Australian Defence Force’s contribution to the international effort to combat the Daesh terrorist threat in Iraq. Australia’s contribution is being closely coordinated with the Iraqi government, Gulf nations and a broad coalition of international partners.

6/25/15

Credit: Australian Ministry of Defence

The KC-30A and the Airbus tankers of three other allied air forces have made major contributions to supporting the air forces engaged in the operations in Iraq and Syria.

The video is from 2015, which would then make it only eight more years until the USAF has its own new tanker.

 

 

 

Fifth Gen Aircraft Arrive for Singapore Air Show

Two F-22 Raptors from the Hawaii Air National Guard and two F-35B Lightning II’s with Marine Fighter Attack Squadron 121 land at Changi Air Base East, Republic of Singapore, Feb. 5, 2020.

The aircraft will participate in the Singapore Airshow 2020, the largest defense exhibition and biennial international tradeshow in the Pacific.

SINGAPORE

02.05.2020

Video by Senior Airman Johnathon Wines

Pacific Air Forces Public Affairs