What the ubiquitous syringe tells us about US supply chains

The writer is a professor of management practice in business administration at Harvard Business School

The Covid-19 pandemic called attention to the fragility of the supply chains for many medical products, with shortages in everything from generic pharmaceuticals and essential medicines to basic supplies like blood sample collection containers and personal protective equipment.

Since then there have been numerous calls in the US to rethink supply chain designs, build national stockpiles and revamp domestic manufacturing. But three of the last five high-volume disposable syringe factories in the US have closed in the past six months because it was cheaper to source products from China.

A recent visit to a Becton, Dickinson and Co (BD) factory in Canaan, Connecticut, one of the last two large-scale syringe factories left in America, raised some important questions about the scale of that challenge.

In the US, we use about 10mn syringes a day — two out of every three medical procedures involve one. Hospitals, pharmacies and doctors’ offices use them for everything from intravenous injection of drugs, to intensive care unit infusion of critical drugs, to the maintenance of catheters. Their quality and precision are critical to patient safety, yet they are amazingly inexpensive, typically selling for about 15 cents each.

In 1954, BD supplied disposable glass syringes for Jonas Salk’s first polio vaccine trial and supported the subsequent vaccination campaign.

The Canaan factory, which started operations in 1961, was a big supplier for H1N1 flu shots and, of course, for Covid vaccine shots. It has about 400 employees who produce more than 2bn medical devices a year, which means over 5mn units per employee per year. Each syringe is individually packaged, sterilised and then boxed in quantities of 100 or more.

I was told that the output of the factory fills between four and seven 53-foot semi-trailers a day, depending on size mix (with 1mn units in each trailer). Eighty per cent are shipped all over the US and the rest exported. The factory is highly automated, and it runs around the clock, so there are not that many people on the floor.

I draw two conclusions from these observations. First, that labour costs are not an issue because worker productivity is so high. And second, that capital costs are low because most of the equipment is fully depreciated, except for a relatively new electron beam sterilisation system. 

So why do these domestically produced syringes cost slightly more than the ones made in China?

Material costs, mainly the polypropylene plastic for the syringe body or the polyisoprene (a synthetic rubber) stopper that is part of the plunger, represent more than half the manufacturing cost. These are made from resins derived from oil, and right now oil is cheaper for Chinese manufacturers because they can buy it from Russia.

The BD factory had its Food and Drug Administration inspection in mid-September. A quick search of the FDA website for a few Chinese manufacturers importing into the US indicated no inspections since 2018, well before the pandemic.

Among the reasons one would want to inspect the factories is to ensure consistent product quality and avoid safety issues from over- or under-infusion of drugs due to size variations (this is especially critical in paediatric and neonatal patient populations). One would also want inspections to check drug stability and potency shifts if pre-filled and unqualified materials were used in manufacture.

The other challenge with syringes is that because they and similar items are sold to medical product distributors and may pass through several layers before reaching the medical professional who ultimately uses them, most of these end users in hospitals and medical facilities don’t know where the product came from. And they have too many other immediate things to worry about instead of where it was made or whether they will be able to get it in the next crisis.

But, for a matter of just pennies per syringe, the US seems to be going down a path towards losing its last large-scale domestic syringe manufacturing capacity. I recently received my Covid booster and flu shots, and I would have happily paid a nickel or a dime more for domestically produced syringes to make sure I could get them in the next pandemic.