The Next Big Thing in Pharma: Buy American
On August 6, 2020, President Donald J. Trump signed an executive order mandating the federal government to buy and give preference to certain "essential" drugs and medical supplies developed and made in the U.S. over those from overseas. The move is expected to plug gaps in the pharmaceutical supply chain that have been exposed by the coronavirus pandemic.
The announcement follows a surprise plan to loan hundreds of millions to camera maker Eastman Kodak to manufacture drug ingredients. It is part of a broader strategy to reduce U.S. dependence on foreign manufacturers. But the unclear nature of the policy, and the complexity of the pharmaceutical supply chain, imply its impact and road to implementation are vague.
In a speech at a Whirlpool factory in Clyde, Ohio, President Trump reiterated his intention to improve the security of the American health system and bring supplies of drugs “home, where they belong.”
“We cannot rely on China and other nations across the globe that could one day deny us products in a time of need,” Trump said. “We just can’t do it.”
Details of the “Buy American” order is yet to be provided by the administration. However, the government mandates the Food and Drug Administration to list the essential drugs that will be covered under the order. In a conference call with reporters, Trump's top adviser said the order would reduce some FDA and Environment Protection Agency regulations for domestic manufacturers. At the minimum, the order will apply to drugs and supplies required to combat emergencies such as pandemics, bioterror attacks, and other national security threats, Navarro added.
"We are dangerously dependent," stated Navarro. "The United States must protect its citizens, critical infrastructure, military forces, and economy against outbreaks of emerging infectious diseases."
Ninety percent of U.S. prescriptions contain generic medicines, and most of the generic ingredients are sourced from abroad, especially India and China.
However, the order has drawn objections from the drug industry. PhRMA President and CEO Stephen J. Ubi said in a statement that pushing the “Buy American” narrative at this time would be an unprecedented step:
“The ‘Buy American’ executive order could disrupt the global pharmaceutical supply chain, jeopardizing our ability to respond to the current crisis and potentially leading to major long-term supply chain disruptions, including shortages. Rather than government mandates, we should look for policies that enable more domestic manufacturing without putting the stability of pharmaceutical supply chains at risk.”
The executive order affects purchases by the Department of Health and Human Services, Defense, and Veterans Affairs. According to Navarro, the order would be subjected to White House Legal review before the full release.