CONFLICT near the Strait of Hormuz has potential to disrupt Australia’s pharmaceutical supply chains, according to Steve Blough, chief supply chain strategist for software firm Infios.
“Modern drug manufacturing relies on a highly interconnected network of suppliers, logistics hubs and transport corridors, and the Gulf region sits at the centre of several of those flows,” Mr Blough said.
He said while a large share of the generic medicines used in Australia were produced in India, the supply chain that fed those factories was global.
Infios chief supply chain strategist
Steve Blough. Image: Infios
“Many of the chemical precursors and active pharmaceutical ingredients originate in China and are frequently routed through major distribution centres in the Gulf, including hubs in Dubai and across the United Arab Emirates, before reaching Indian manufacturers,” Mr Blough said.
“Even when materials move directly between Asia’s manufacturing centres, the pharmaceutical sector still relies heavily on petrochemical feedstocks and energy supplies sourced from the Gulf region."
Beyond production inputs, the Middle East also serves as a major transit corridor for pharmaceutical cargo.
High-value or time-sensitive medicines often move by air through Gulf aviation hubs, while bulk shipments travel by sea in refrigerated containers requiring precise temperatures throughout the journey.
Mr Blough said air cargo typically used insulated packaging systems designed to protect temperature-sensitive medicines.
Some shipments move in advanced cryogenic containers, but many still relied upon insulated packaging requiring dry ice or battery-powered cooling systems.
“Disruptions to flight schedules or ground handling operations can therefore increase the risk of cold-chain interruptions,” Mr Blough said.
He warned the maritime sector faced risk, with refrigerated containers or “reefers” operating within tightly planned sailing schedules.
“If vessels are forced to divert away from conflict zones or if sailings are cancelled, containers can accumulate at origin ports while others are redirected to alternate hubs that may not have sufficient power capacity to support large volumes of refrigerated cargo,” he said.
“At the same time, empty containers can become trapped in affected regions. When that happens, equipment cannot return to Asian export hubs where new pharmaceutical shipments are waiting to be loaded.”
This created a compounding logistics challenge: manufacturers may have product ready to ship but lack the specialised containers required to move it.
“If instability around Gulf shipping routes persists, the effects could begin to surface within four to six weeks,” Mr Blough said.
“Supply pressure may first appear in high-volume generic medicines, including treatments for diabetes, hypertension and cholesterol, as well as antibiotics.”
For Australia, the key issue was not necessarily a sudden halt in medicine production, but the vulnerability of the logistics systems.
“When shipping routes lengthen, containers are delayed, and air freight capacity tightens, medicines can take longer and cost more to reach pharmacies and hospitals,” he said.
“While the conflict itself is geographically distant from Australia, the pharmaceutical supply chain operates as a global system.
“Disruptions in one region can quickly propagate through manufacturing networks and transport corridors, ultimately affecting medicine availability and costs in markets far from the original source of the disruption.”