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Global Trade Management

Biden administration acts to secure US pharmaceutical supply chain

Melissa D. Berry  Regulatory Intelligence

Melissa D. Berry  Regulatory Intelligence

The U.S. government is getting serious about protecting the country's pharmaceutical supply chain, releasing a series of policy recommendations to address perceived vulnerabilities

The White House, the U.S. Department of Health and Human Services’ (HHS) Office of the Assistant Secretary for Preparedness and Response (ASPR), and the U.S. Food and Drug Administration (FDA) released a series of policy recommendations to address vulnerabilities in U.S. pharmaceutical supply chains.

“Last year, the American people experienced a widespread and significant shortage of N95 respirators for healthcare workers and masks to protect essential workers and others, and year after year we see shortages of medicines and medical supplies like saline,” said FDA Acting Commissioner Janet Woodcock in a press release early last month. “Pharmaceutical supply chains are essential for the national and health security and economic prosperity of the United States, yet the COVID-19 pandemic revealed just how vulnerable the supply chain is in this country. Now is the right time to take action to keep the U.S. drug supply chain secure and resilient.”

Of particular concern are active pharmaceutical ingredients (APIs), the primary ingredients for generic drugs. Generic drugs represent 90% of all prescription medications filled in the United States.

Reducing reliance on foreign supply chains

The country “remains critically dependent on imports for a range of key pharmaceutical products and APIs,” according to a White House press release. Approximately 87% of API facilities for generic drugs are overseas, with China and India controlling “substantial parts of the supply chain.” While these overseas facilities have “helped reduce costs by trillions of dollars in the past decade,” reliance on them has left the nation’s healthcare system vulnerable to shortages of essential medicines.

Greater API production domestically will help reduce reliance on global supply chains for medications that are in shortage, particularly during times of increased public health need. HHS announced it will make an initial commitment of approximately $60 million from the Defense Production Act appropriation in the American Rescue Plan to develop novel platform technologies to increase domestic manufacturing capacity for active pharmaceutical ingredients.

According to an FDA and ASPR report on U.S. supply chain vulnerabilities, the pharmaceutical supply chain is complex, global, and highly influenced by market factors that have led to an increasing reliance on foreign countries to manufacture the medicines, APIs, and key starting materials that are used in the production of APIs.

In order to ensure the security the U.S. pharmaceutical supply chain, the report identified four areas of focus:

      • boosting local production and fostering international cooperation;
      • promoting research and development that establishes innovative manufacturing processes and production technologies to strengthen supply chain resilience;
      • creating robust quality management maturity to ensure consistent and reliable drug manufacturing and quality performance, and;
      • leveraging data to improve supply chain resilience.

The report also found that the “COVID-19 pandemic highlighted the critical importance of a resilient U.S. public health industrial base.” The agencies are continuing to address “resilience challenges in the broader pandemic supply chain,” including a strategy with objectives and actions for long-term resilience to be completed this month.

The agencies noted that strengthening pharmaceutical supply chains may require leveraging existing authorities, such as the Defense Production Act. Additionally, they recognize that public-private collaboration will be necessary to achieve success and suggest incentives that recognize and reward manufacturers that have systems focused on continuous improvement, business continuity plans, and early detection of supply chain issues.

Funding manufacturing technologies

In further support of improving pharmaceutical supply chain resiliency, the Biden administration is encouraging federal agencies to “increase their funding of advanced manufacturing technologies to increase production of key pharmaceuticals and ingredients, including using both traditional manufacturing techniques and on-demand manufacturing capabilities for supportive care fluids, APIs, and finished dosage form drugs.” The federal government’s capacity to “shape the market” for critical products was evident in its public-private partnerships to facilitate the development and delivery of a COVID-19 vaccine.

The administration also asked HHS to request new powers from Congress that would improve transparency in the pharmaceutical supply chain by allowing HHS to track production by facility, track API sourcing, and require that API and finished dosage form sources be identified for all pharmaceuticals sold in the United States.

The report and recommendations were in response to Executive Order 14017, which President Biden issued on February 24 to focus on securing critical supply chains in the United States.

The Biden administration also announced a supply chain disruptions task force focused on four critical products: semiconductor manufacturing and advanced packaging; large capacity batteries, like those used in electric vehicles; critical minerals and materials; and pharmaceuticals and APIs.

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