Lawmakers Clash With Pharmaceutical Industry on Foreign Manufacturing

Following coronavirus pandemic-related drug shortages, the pharmaceutical industry is pushing back on pressure from lawmakers to exclusively manufacture drugs in the U.S.

Since the onset of the pandemic, about 20 bills related to pharmaceutical supply chains have been introduced to Congress. The bills offer various strategies for dealing with overseas manufacturing, such as prohibiting federal agencies from purchasing drugs made in China after 2023, requiring black box warnings on all drugs manufactured overseas, and mandating that drugs critical for emergency responses be manufactured in the U.S. As part of the coronavirus stimulus package, a law was passed requiring drug makers to alert the FDA when they expect supply interruptions of active pharmaceutical ingredients and to create contingency plans in the event of a shortage.

It is illegal to import drugs meant for sale in other countries into the U.S., but many medications produced for use in the U.S. are manufactured in FDA-regulated facilities overseas. There are currently more than 200 factories registered with the FDA in China alone, and more in Europe and India. Since manufacturing information is often considered a trade secret that is not shared with regulators, including the FDA, it is difficult to calculate how dependent the U.S. is on foreign countries for pharmaceuticals. U.S. drugmakers are required to register all manufacturing facilities with the FDA, but do not have to report which medications a facility is manufacturing and at what volume.

Moving pharmaceutical production to the U.S. would mean shuttering existing overseas facilities and rebuilding them on American soil, driving up manufacturing costs with more expensive labor and infrastructure.

The Association for Accessible Medicines, the generic drug industry’s trade association, released suggestions for shifting manufacturing to the U.S., such as providing incentives, including guaranteed federal contracts and tax breaks, to companies making essential medicines within the country.

Other considerations include regulations that restrict large-scale manufacturing, such as Environmental Protection Agency rules regarding water and air pollution. These restrictions would have to be lifted to allow American drug manufacturing to scale up to the necessary level.

Source: STAT, May 26, 2020.