This image shows precipitation rates and totals as Hurricane Helene came ashore in late September 2024. [Image via NASA]
With FEMA responding to damage across North Carolina, South Carolina, Georgia, Florida, Alabama and Tennessee, more disruption for the medical device industry seems likely. (We’ll stay on top of the developments at Medical Design & Outsourcing and add to this story as needed.)
Even for companies without a manufacturing presence in the region, there could be supply chain snarls. For example, Helene affected a mining area in North Carolina that is crucial for making computer chips, according to media reports. The Quartz Corp. reported today that it shut down operations on Sept. 26 in anticipation of Helene and had no visibility on when they would restart — its focus being the safety of employees and their families.
In the case of Deerfield, Illinois–based Baxter, heavy rain and storm surge triggered a levee breach, which led to water permeating the site of its North Cove site in Marion, North Carolina. There is also bridge damage in the area.
North Cove’s 2,500 employees make intravenous and peritoneal dialysis products. Opened in 1972, the facility is the largest manufacturer of those types of products in the United States, according to Baxter.
“Our hearts and thoughts are with all those affected by Hurricane Helene,” Baxter CEO Joe Almeida said in a news release. “The safety of our employees, their families, and the communities in which we operate remains our utmost concern, and we are committed to helping ensure reliable supply of products to patients. Remediation efforts are already underway, and we will spare no resource — human or financial — to resume production and help ensure patients and providers have the products they need.”
Baxter said it is actively managing inventory and implementing a protective allocation process by product line to ensure dialysis product supplies continue. The company said it can also leverage its global manufacturing network to help mitigate the potential supply impact as it works to restore North Cove’s manufacturing operations fully. The company expects a negative impact on financial results but still needs to fully assess the damage before it can provide an estimate.
Baxter is donating $1.5 million to humanitarian aid partners to help address recovery needs, including additional funds for its Employee Disaster Relief Fund,.The company is matching employee donations 2:1 toward relief efforts.
Meanwhile, a Siemens Healthineers spokesperson said the company’s Cary, North Carolina facility, located in the eastern part of the state, is fine. BD and Johnson & Johnson MedTech reported minimal or no impact on operations.
This isn’t the first time that a hurricane had a major impact on medical device companies. In September 2017, Hurricane Maria took Medtronic’s four manufacturing plants Puerto Rico offline for nearly two weeks; the cost for Medtronic was $60 million. With climate change causing ever more extreme weather events, medical device manufacturing companies and corporations, in general, are increasingly seeking to innovate their supply chains to make them more resilient to the challenges.
This story originally ran on Sept. 30, 2024. Updated with additional details on Oct. 1. We’ll continue to update this story as more details come in.
