Biden wants a review of the API supply chain. Will that parlay into an effort to 'onshore' drug manufacturing?
When former President Donald J. Trump was voted out of office Nov. 2, his gung-ho effort to “onshore” drug manufacturing was left mostly up in the air. Joe Biden has been mostly mum on whether he would continue that effort, but a new executive order could provide a clue — at least in a few months.
In an order signed Wednesday, Biden demanded a 100-day governmental review of key supply chains, including for active pharmaceutical ingredients (API) used in American drugs.
Biden’s effort doesn’t amount to full-scale effort launched under the Trump administration to infuse billions into American-made drug manufacturers, but a key note in the president’s prepared fact sheet could indicate his goal. In that document, his team highlighted that 70% of US API producers had moved offshore in recent decades — potentially threatening the supply of a stable supply chain during future pandemics.
Since his inauguration, it’s been unclear whether Biden would adopt the explicit nativist tone of Trump’s “Buy America” initiative, which culminated in an August executive order aiming to drive new investment in onshore drug production.
That game plan sometimes led to a few questionable investments, most notably a $765 million loan through the administration’s development finance arm to camera maker Kodak. After the loan was announced, accusations of insider trading and an SEC investigation eventually sent that initiative into a tailspin in August.
Meanwhile, the government made a more direct investment in the upstart Phlow Corporation in May, a previously unknown company that was tapped to partner with generics maker Civica Rx, among others, to build a Virginia plant for critical hospital drugs. In January, Civica announced it would dole out $124.5 million to build its first in-house manufacturing operation in Petersburg, Virginia — close to Phlow and the other partners in the government contract, Medicines for All Institute and AMPAC Fine Chemicals.
Outside the government’s purview, other big-name players have stepped up in recent months to put their own big down payments on American-made drugs.
In January, billionaire investor Mark Cuban put his name to a new company dubbed Mark Cuban Cost Plus Drugs, a generics startup using flat-rate margins at wholesale to drive down the cost of expensive generics. The goal is eventually to launch more than 100 drugs onto the market by the end of this year, but the firm will start with antiparasitic albendazole, which it says it will offer at an average price per tablet of $20 compared with the current average of $225 MSRP. For insured patients, that price could go “as low as a dollar,” the company said on its website.