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COVID-19: The Impact on Oxygen Supply Security

COVID-19: The Impact on Oxygen Supply Security

EXECUTIVE SUMMARY

The COVID-19 pandemic is causing shortages of life saving medical oxygen and thus diversion of supplies away from other industries. Drastic increases in demand have already led to significant disruption in the oxygen marketplace and breaks in supply chains.

An example of possible intervention is Peru where exponential growth in numbers of infected patients has inspired industrial clients to lend their DOCS to local hospitals in an effort to help.

Rising oxygen prices and increased risk of longer term supply disruption is set to be a significant factor in strategic decisions to secure an uninterrupted supply of oxygen for all applications in the future

PCI Gases expects a significant increase in the number of systems required for all applications in the coming years. This is strategic opportunity for DOCS technology which guarantees oxygen access regardless of application and the industrial supply situation of the moment.

 

SITUATION: OXYGEN & COVID-19

The Coronavirus is the most serious pandemic the world has experienced in over a century. Necessary shutdowns and social distancing have disrupted economic growth not seen since the World War II. Significant differences in mortalities and rates of infection have demonstrated the ability (or lack) of differing political systems with diverse leadership, transparency and healthcare systems to master the crisis. The pandemic has pushed even the most advanced health systems to their limits. By all accounts, the situation is due to deteriorate further in the coming months.

By mid-June 2020, the official reported number of COVID-19 cases worldwide exceeds 8 million with over 430,000 deaths. These figures are believed severely underestimated due to a lack of accurate data. The largest numbers of new coronavirus cases reported are presently in USA, Brazil and India. Most experts also agree that Russia has over ½ million cases, but is strictly under-reporting for political reasons. With the World Health Organization (WHO) warning that the coronavirus is spreading much more rapidly in Africa than official data suggests, the consequences due to lack of personal protective equipment PPE, diagnostics, ventilators and oxygen are set to be dire.

Despite the fact that the number of coronavirus cases continues to rise sharply in many countries, national and local governments have authorized the reopening of shopping malls and other public places raising fears of a significantly higher number of infections in the coming weeks.

The majority of central banks and think tanks around the world have warned that the prospects for a quick turnaround for the global economy in the second half of this year and 2021 are diminishing with many warning that a downturn could last until 2022.

 

MEDICAL OXYGEN SHORTAGES

As the pandemic continues to spread towards the more vulnerable LMICs (Low Middle Income Countries) especially Africa and South Asia, experts warn that there are only weeks to help counter expected chronic shortages of equipment and supplies necessary to further combat the virus. After initial deficiencies, strong measures to increase the supply of PPE and ventilators are now underway.

Attention is now turning to shortages in supply of medical oxygen needed to save lives. Oxygen is a core component of the life-saving therapies hospitals are giving patients with severe cases of COVID-19, as the world waits for scientists to find vaccines and treatments. Drastic increase in demand has already led to significant disruption in the oxygen market and breaks in the supply chain. The global impact of the pandemic is already starting to be felt and will significantly affect the market for on-site Medical Oxygen Concentrators in the future. As a consequence, PCI Gases is experiencing a substantial increase in interest in their Deployable Oxygen Supply System DOCS.

Hospitals across the USA battling the coronavirus have consistently reported shortages of PPE, ventilators and pain management drugs, but medical professionals are now expressing concern about the availability of oxygen itself. At Elmhurst Hospital in Queens, New York, one of the epicenters of the outbreak, an emergency room doctor said “The hospital was close to running out of oxygen”. At the University of Rochester Medical Center the responsible director noted “We’re consuming oxygen faster than we’ve ever consumed oxygen in hospitals before”.

BOC, the largest provider of medical gases in the UK, has told non-essential customers to return their tanks of oxygen in a bid to shore up its supply to the National Health Service, which has been hit by oxygen shortages in recent weeks. Customers were told that their cooperation could “save many lives”. The company acknowledged that it had “ … made proactive contact with non-NHS customers to return unwanted or slow-moving unused medical cylinders” to facilitate hospital supply”.

In South America political choices in Brazil have been largely responsible for spreading the virus and creating a major number of cases, second only to the USA. Peru has now overtaken both France and Germany in terms of infected patients and is expected to surpass Italy (235,000) in the near future. There have been various media reports of hospitals unable to admit new cases with many unable to provide the crucial oxygen required by many patients. As a result, PCI Gases has seen a large increase in orders for DOCS from Peru. In addition, a number of industrial clients have lent their DOCS to local hospitals in an effort to alleviate the situation.

Oxygen shortages are also having a significant knock-on negative impact on non- healthcare sectors. Although short-term price increases are important, the diversion of essential oxygen supplies away from other major users and industrial applications will have greater long term significance. The ethical and political pressures which have become evident in the first months of the pandemic require reappraisal by industries reliant on oxygen for their processes. The increased risk of supply disruption is thus set to be a significant factor in the strategic decision to secure future uninterrupted supply of oxygen for all applications.

OXYGEN – POST PANDEMIC

Media coverage of the COVID-19 pandemic has created panic over the deficiencies in the availability of PPE and ventilators. Although these shortages are real, increasing the number of ventilators without addressing oxygen supply is a prescription for avoidable fatalities. With medical oxygen the primary treatment for the vast majority of patients suffering severe COVID-19 symptoms, one of the crucial recommendations of the WHO is that all countries focus on the development of medical oxygen systems.

Generally hospitals in LMICs are supplied by cylinders filled at industrial gas plants and transported by truck. Reliability of supply is often compromised through geographic and political challenges. The cost of supply is often excessive with logistics playing a major role. Exponentially increased demand due to COVID-19 has stretched these supply chains to breaking point causing many avoidable deaths. Even developed countries with superior healthcare infrastructure are experiencing shortages.

COVID-19 is a public health crisis without parallel in recent history. Notwithstanding its human cost, it is also an opportunity to assess medical oxygen supply as one of the defining health equity issues of our age. Today’s availability of finance and technology means that universal access to oxygen is no longer a vague aspiration. Political leadership coupled with international cooperation are key with numerous models currently being developed through coalitions of companies, philanthropic foundations, UN agencies, NGOs and non-profit organizations.

Present focus on the medical sector will lead to measures which will surely enhance and increase the supply of medical oxygen and patient access whilst reducing cost. It will require increased investment and commitment to put oxygen at the center of policies for universal health coverage. The experience of the past months will force all non-healthcare industries to review and revise their strategies accordingly. They will necessarily need to increased priority, focus and outlay in order to strengthen and secure their uninterrupted oxygen supply.

SECURE OXYGEN SUPPLY SOLUTIONS

Despite today’s understandable focus on the medical sector, the consequences of the COVID-19 pandemic on oxygen supply will be far reaching for many other industries. The priority, which will surely be given to medical oxygen in future contingency plans, will increase the risk of supply for all other major users in the fields of Aquaculture, Waste Water Treatment and Purification as well as other industrial applications.

Present events are forcing many relevant industries to reassess their oxygen supply situation. On-site systems will be at the forefront of measures to manage future risks to oxygen supply. PCI Gases therefore expects a significant increase in the number of systems required for all applications in the coming years. Despite the regrettable human cost of the COVID-19 pandemic, this is strategic opportunity for DOCS technology which guarantees oxygen access regardless of application and the industrial supply situation of the moment.

 

For further communication, you can reach the author Tim Boulton, our Sales Director, EMEA Region, at tboulton@pcigases.com.

Posted June 18, 2020

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