The suspension of U.S. foreign aid has severely disrupted the supply chain for essential medical products used in combating diseases like HIV and malaria in some of the world’s most vulnerable regions. Experts warn that the resulting shortages could persist for months, exacerbating health crises in affected areas.
The U.S. Agency for International Development (USAID) typically procures around $600 million worth of medical supplies annually, including medications, diagnostic tools, and preventive equipment like bed nets. However, the aid freeze has halted procurement and long-term planning, causing widespread uncertainty regarding supply timelines, costs, and delivery schedules, according to sources familiar with global health logistics.
Major pharmaceutical and medical companies, including Abbott, Roche, Cipla, Hologic, Viatris, Hetero, and Aurobindo, are expected to be impacted by this disruption. A spokesperson for Roche emphasized the company’s commitment to ensuring continuous access to diagnostics and treatments worldwide but did not comment further on the situation. Other companies either declined to respond or remained silent on the matter. The U.S. State Department has yet to issue a statement.
Sources indicate that the waivers granted by the U.S. government to allow lifesaving work to continue only apply to shipments already in transit. Even those face delays due to the shutdown of USAID’s payment system. Future orders remain highly uncertain, even for manufacturers who have secured raw materials and allocated production capacity.
The freeze is expected to affect the supply of critical HIV and malaria medications, diagnostic kits, bed nets, and contraceptives, potentially leading to a severe backlog. Fitsum Lakew Alemayehu, the African Union liaison manager at WACI Health, an African advocacy group, stressed the urgency of the situation, noting that millions across the continent rely on these treatments.
Disruptions to Pricing and Supply Chains
The collapse of USAID operations has already had significant consequences, including the closure of HIV treatment centers, delays in emergency food aid, and interruptions in ongoing research. The supply chain disruption is likely to drive up costs, as pharmaceutical companies have traditionally relied on steady, large-scale orders from USAID to maintain production efficiency.
Prashant Yadav, a global health supply chain expert and senior fellow at the Council on Foreign Relations, warned that this situation exemplifies the “bullwhip” effect, where even minor disruptions can magnify throughout the supply chain, leading to inflated costs and financial strain on other health organizations and governments reliant on these products.
Even if the aid freeze is lifted after the proposed 90-day review, restoring normal supply operations will be a complex process, entailing legal and logistical hurdles. Tom Cotter, CEO of Health Response Alliance, a nonprofit advocating for equitable healthcare access, described the situation as a significant challenge that will take considerable effort to resolve.
