Cobalt-60 Shortages, Tariff Pressure, and EtO Uncertainty: The Case for Sterilization Sovereignty

The semiconductor industry coined a phrase in the 2020–2022 chip shortage that has since migrated into policy discussions, capital allocation frameworks, and boardroom vocabulary across manufacturing sectors: supply chain sovereignty. The premise is straightforward. When a critical production input is controlled by a small number of external suppliers, located in geographies subject to political or logistical disruption, and not easily substitutable on short notice, the dependency is a strategic vulnerability that will eventually be revealed as such. The chip shortage was that revelation for semiconductors.

Sterilization has a version of the same structural vulnerability — and its three components are simultaneously in stress.

Approximately 50% of medical devices are sterilized by ethylene oxide. According to the FDA's own medical device sterilization market analysis, EtO is the dominant modality for complex devices with lumens, heat-sensitive materials, and multi-layer packaging configurations that cannot tolerate the dose uniformity challenges of radiation or the thermal exposure of steam. The devices that depend on EtO are not the simple ones — they are the catheters, endoscopes, implantable sensors, and combination products that require the lowest-temperature, most penetrating sterilization modality available at commercial scale.

Approximately 40% of devices are sterilized by gamma irradiation, which depends on a cobalt-60 supply chain concentrated among a small number of global isotope producers. The International Atomic Energy Agency's cobalt-60 supply and demand analysis documents the structural constraints: most commercial cobalt-60 is produced in nuclear reactors, the reactor fleet supporting production is aging, and new production sources require multi-year lead times. The consequence is that gamma irradiation capacity is not expanding at a rate that matches projected demand from device manufacturers.

The third component — tariff pressure — has emerged more recently but is compounding the first two in ways that have not been fully priced into strategic planning.

The EtO Component

The ethylene oxide sterilization dependency is not a new concern, but its character has changed materially since 2023. The EPA's April 2024 final rule requiring substantial reductions in EtO emissions from commercial sterilization facilities initiated a capital investment cycle across the contract sterilization sector. Abatement infrastructure — scrubbers, catalytic oxidizers, real-time emissions monitoring — represents hundreds of millions of dollars in aggregate investment across the major EtO contract sterilizers. Those investments are being recovered through pricing.

The March 2026 EPA proposed reconsideration — which proposes to rescind the Biden-era emissions standards and return to the pre-2024 requirements — has introduced a new dimension of uncertainty. It has not reversed the investments already made, and it has not reduced the operational cost structure that those investments produce. It has introduced a rulemaking cycle of indeterminate duration that will resolve into one of two outcomes: either the reconsideration is finalized and EtO regulations relax, or the reconsideration is challenged and the 2024 standards are reinstated (in some form) after a period of extended litigation. Neither outcome is predictable, and both impose planning uncertainty on manufacturers dependent on EtO sterilization.

Beyond the regulatory volatility, EtO's occupational exposure profile has not changed. The underlying carcinogen classification — established by the International Agency for Research on Cancer — is not subject to EPA reconsideration. Occupational exposure monitoring, OSHA permissible exposure limit compliance, and long-term liability associated with worker exposure are permanent features of EtO facility operations. Community opposition to EtO facility siting and permitting — which has successfully blocked expansions and forced closures in multiple U.S. states — has not been resolved by the reconsideration proposal.

A manufacturer dependent on EtO contract sterilization does not have one dependency. It has a dependency on an input that is subject to regulatory volatility, cost escalation driven by compliance investment, facility closure risk from community opposition, and ongoing occupational liability for the facility operator. Each of these vectors operates independently, and they can compound.

The Cobalt-60 Component

Gamma irradiation is the other dominant sterilization modality, accounting for approximately 40% of device sterilization globally. Its dependency structure is different from EtO in mechanism but similar in strategic character: the supply chain is concentrated, the capacity is not easily or quickly expandable, and the lead times for resolving supply constraints are measured in years, not months.

Cobalt-60 is produced by irradiating cobalt-59 targets in nuclear reactors. The primary commercial Co-60 sources are the CANDU reactors operated by Bruce Power and Cameco in Canada, supplemented by production from reactors in Russia and other jurisdictions. The IAEA analysis of cobalt-60 supply and demand documents a structural imbalance: the number of reactors actively producing Co-60 is limited, the production cycle from target installation to usable isotope is 18–24 months, and demand from both medical device sterilization and industrial applications continues to grow.

The commercial consequence is capacity tightness. Contract irradiation facilities — Sterigenics, STERIS, Sotera Health — have faced periods of constrained capacity in recent years. Sotera Health's 2025 annual filing documents the Co-60 supply situation as an operational factor. Manufacturers dependent on gamma sterilization have experienced extended lead times, constrained scheduling windows, and — in some cases — forced re-routing of product to alternative facilities at higher cost and longer transit times.

For manufacturers with products that can technically tolerate gamma irradiation, the constraint is logistical and commercial rather than technical. But the risk it exposes is the same as EtO: when the sterilization step depends on an externally controlled input, disruption in that input disrupts every downstream operation — packaging release, finished goods inventory, distribution, and ultimately product availability. The 2020–2023 supply chain disruption period made the cascading consequences of a single choke point visible in ways that previous disruptions had not.

The Tariff Component

Tariff pressure on sterilization inputs is a newer variable, but it is entering the calculation in a number of ways that compound the existing constraints.

Sterilization equipment — hydrogen peroxide vapor generators, gamma irradiators, EtO sterilizer chambers — has significant imported content. The tariff escalation that began in early 2025 and accelerated through 2025–2026 has increased the landed cost of imported sterilization equipment components, replacement parts, and consumables. For contract sterilizers calculating the cost of maintaining or expanding capacity, tariff-driven cost increases on equipment are pass-through expenses that ultimately affect per-unit sterilization pricing.

More directly, tariffs affect the cost of imported biological indicator consumables, hydrogen peroxide supply (for VHP), and specialty materials used in sterilization process validation. The directional effect is to increase the cost of all sterilization modalities — but not equally. In-house VHP systems, once installed and validated, have low operating costs relative to the contract alternatives: hydrogen peroxide is a commodity chemical with domestic supply, and the consumables required for ongoing monitoring are not high-value imported goods. The tariff exposure differential between in-house VHP and contract sterilization that depends on specialized imported inputs (Co-60, EtO) is one of the factors in the current re-evaluation of sterilization supply chain architecture.

The reshoring imperative — the broader policy and commercial trend toward domestic production of inputs previously sourced internationally — applies to sterilization services as it does to other inputs. Analysis from E-BEAM Services (2026) documents the trend toward domestic sterilization capacity investment as a supply chain resilience strategy. Manufacturers who have invested in on-site sterilization capability are not subject to tariff-driven cost changes in external services; their sterilization cost structure is locked to the capital investment they have already made and the domestic operating costs of running the system.

The Three-Constraint Convergence

The simultaneity of the three constraints — EtO regulatory and operational pressure, Co-60 supply tightness, and tariff-driven cost escalation — is what gives the sterilization sovereignty argument its current urgency.

Any one of these constraints, in isolation, would represent a manageable commercial issue. EtO pricing has changed before. Co-60 supply has been constrained before. Input costs have risen before. What is different now is that all three are operating in the same planning window, affecting the same manufacturers, and creating pressure on the same budget lines simultaneously. The cumulative effect is that the option value of the status quo — continuing to use contract sterilization on existing terms — has declined, and the option value of in-house capability has increased.

The relevant question is not whether the constraints will resolve. Some will, partially, on uncertain timelines. The EPA reconsideration may relax EtO emission requirements. Co-60 supply may improve as new production sources come online. Tariff environments change with trade policy. The relevant question is: given that the constraints exist, are simultaneous, and have uncertain resolution timelines, what is the cost of dependency relative to the cost of capability?

In-House VHP as the Structural Answer

VHP sterilization eliminates all three dependency vectors simultaneously — and that is the correct way to evaluate it in the current environment.

EtO dependency is eliminated because VHP does not use ethylene oxide. The occupational exposure concerns, facility closure risk, community opposition dynamics, and regulatory volatility of EtO are not transferred to VHP operations — they are structurally absent.

Co-60 dependency is eliminated because VHP does not use ionizing radiation. The supply constraints, reactor production cycle timelines, and geographic concentration of the Co-60 supply chain have no relevance to a manufacturer operating VHP in-house.

Tariff exposure on sterilization services is eliminated because in-house VHP removes the contract service dependency entirely. Hydrogen peroxide — the active agent in VHP — is a commodity chemical produced domestically. The operating cost of an in-house VHP program is primarily hydrogen peroxide, utilities, and consumables for ongoing biological indicator monitoring and process verification. None of these inputs are subject to the tariff exposure that characterizes imported sterilization equipment or specialty isotopes.

The case is not that VHP is optimal for every product. Devices that require the maximum achievable dose uniformity across high-density packaging configurations may have technical requirements that gamma irradiation satisfies better at high volumes. Some EtO applications involve geometries and packaging specifications that have been optimized for that modality over decades. For manufacturers with those technical constraints, VHP is not always the immediate answer for their entire product portfolio.

The case is that for manufacturers whose products are technically suitable for VHP — and that category includes the majority of temperature-sensitive devices, combination products, allograft tissue, and pharmaceutical fill-finish environments — the supply chain resilience argument has been added to the existing technical case. It is not a new argument that has replaced the old one. It is an additional argument that makes the total case more compelling than it was before the current constraint environment materialized.

PuroGen's Position

PuroGen's commercial pathways — [direct application](/solutions), [private label and OEM manufacturing](/private-label), and [strategic collaboration](/strategic) — are each a version of the in-house capability argument applied to a different partner configuration.

Direct application: PuroGen deploys validated VHP platforms into regulated industries where the technical case for in-house sterilization is established. The [SteriFlex platform](/steriflex) provides the independently programmable parametric control — concentration, temperature, humidity, dwell time, aeration — that validated VHP processes require. The [science and validation documentation](/science) reflects the heritage of process development that underpins regulatory submissions.

Private label and OEM: Partners who want to deliver in-house VHP capability to their customers under their own brand access PuroGen's engineering architecture and validation framework without building the underlying science from scratch. The supply chain sovereignty argument — eliminating the EtO, Co-60, and tariff dependencies simultaneously — is a sales argument for those partners' customers.

Strategic collaboration: For industry leaders evaluating co-development, licensing, or deeper commercial arrangements, the supply chain environment has created conditions in which in-house VHP capability has strategic value beyond the direct ROI calculation of any single facility. Manufacturers with platform-level VHP capability are positioned differently in a world where the contract sterilization alternatives face simultaneous structural constraint.

The Historical Parallel

The semiconductor analogy that opened this article is imperfect in specifics but accurate in structure. The chip shortage revealed that a manufacturing sector had allowed a critical input — advanced semiconductor fabrication — to concentrate in a small number of geographic locations and supplier organizations, with insufficient domestic backup. The policy and commercial response was to build domestic capacity at scale, accepting higher near-term capital costs in exchange for long-term supply chain resilience. The CHIPS and Science Act was the policy embodiment of that response.

There is no equivalent legislation for sterilization sovereignty. The policy levers are regulatory (EPA, FDA) rather than industrial. But the commercial logic is the same: manufacturers who build in-house sterilization capability are not just solving a current cost problem. They are removing a class of dependency that has proven, in the current environment, to be more volatile and more consequential than it was previously understood to be.

The manufacturers who make that investment now do so with better technical tools, a clearer regulatory pathway, and a more mature service ecosystem than those who had to solve it in 2020. The FDA's Category A recognition of VHP and ISO 22441:2022 mean that the validation pathway is established and the regulatory submission format is defined. The infrastructure for in-house VHP — equipment, validation services, biological indicator supply, regulatory precedent — is mature.

The question is not whether the capability is available. It is whether the manufacturer has evaluated the supply chain risk of not having it. In the current environment, that evaluation is overdue for any manufacturer who has not yet done it.

Frequently Asked Questions

**What percentage of medical devices are sterilized by EtO versus gamma irradiation?**

FDA's medical device sterilization industry data indicates that approximately 50% of devices undergo EtO sterilization and approximately 40% undergo gamma irradiation, with steam and other methods accounting for the remainder. These percentages reflect the installed base of contract sterilization infrastructure and the technical requirements of the device types that dominate the market — EtO for complex, heat-sensitive devices with lumens and multi-layer packaging; gamma for high-volume commodity devices where throughput and dose uniformity are the primary criteria.

**Why is cobalt-60 supply constrained, and is it likely to improve?**

Cobalt-60 is produced by irradiating cobalt-59 in nuclear reactors, primarily CANDU reactors in Canada. The production cycle from target installation to commercially usable isotope is 18–24 months. The global reactor fleet supporting Co-60 production is aging, and new production sources require substantial lead times. IAEA analysis of the Co-60 supply chain documents the structural supply-demand imbalance. New production initiatives are underway, but resolution timelines are measured in years, not months. The near-term constraint will not be resolved by short-cycle commercial responses.

**Does the EPA's March 2026 EtO reconsideration proposal change the supply chain case for VHP?**

It changes the regulatory timing of certain EtO compliance investments, but it does not change the structural supply chain case. The capital investments already made by EtO facilities in abatement infrastructure are sunk; the cost recovery through pricing is ongoing. The occupational exposure liability profile of EtO is unchanged. Community opposition to EtO facility siting continues in multiple U.S. states. The proposed reconsideration, if finalized, would reduce the pace of future regulatory pressure — but it does not restore the pre-2024 EtO cost and risk environment. Manufacturers evaluating the supply chain case for VHP based solely on the reconsideration proposal are underweighting the permanent structural changes that have already occurred.

**How does in-house VHP eliminate tariff exposure on sterilization services?**

Contract sterilization services — EtO, gamma, E-beam — depend on specialized inputs that have international supply chains. Cobalt-60 is sourced from a small number of global producers. EtO sterilization equipment has imported component content. Tariff escalation on these inputs is a pass-through cost that contract sterilizers recover through pricing. In-house VHP removes the contract service dependency: the operating inputs — hydrogen peroxide, electricity, consumable biological indicators — are domestically sourced and not subject to the tariff exposure that characterizes imported specialty inputs. The capital cost of the in-house system has some imported content, but it is a one-time investment rather than an ongoing per-unit cost.

**Is VHP technically suitable for all device categories that currently use EtO or gamma?**

No. Devices with very high-volume, commodity packaging configurations optimized for gamma dose uniformity may not have VHP as a cost-effective alternative at equivalent throughput. Devices with EtO packaging systems optimized over decades for that modality require re-validation for any alternative method. The technical suitability evaluation is product-specific and should be conducted by validation engineers with knowledge of the specific device construction, materials, and packaging. For temperature-sensitive devices, combination products with biologic components, devices with narrow material compatibility windows, and allograft tissue, VHP is the technical preference — not a compromise. For high-volume commodity devices currently processed by gamma, the evaluation is more complex and depends on volume requirements and packaging redesign tolerance.

**Where does PuroGen fit in the in-house VHP supply chain?**

PuroGen is an inventor of validated VHP sterilization platforms — not a contract sterilizer and not an equipment reseller. The [SteriFlex platform](/steriflex) is PuroGen's primary technology for device and pharmaceutical sterilization applications, built around independently programmable parametric control that ISO 22441-compliant validation programs require. PuroGen's commercial pathways include direct technology deployment, private label and OEM manufacturing for partners who deliver in-house capability under their own brand, and strategic collaboration for industry leaders evaluating deeper commercial arrangements. The [in-house VHP sterilization economics article](/insights/in-house-vhp-sterilization-small-manufacturers) provides a detailed ROI framework for manufacturers evaluating the capital investment decision.