FDA takes the lead on defining essential under Trump's 'Buy American' executive order — as pharma warns of supply chain disruption
President Donald Trump has signed an executive order detailing how the federal government should help on-shore drug manufacturing — and the FDA will play a central role.
The agency now has three months to draw up the list of “essential medicines, medical countermeasures, and their critical inputs” that the US must have available at all times. Various departments and agencies are then directed to buy these drugs and their ingredients from American manufacturers.
While limited to federal contracts and not private ones, the executive order threatens to disrupt the global supply chain, pharma groups warn.
“The administration is forcing biopharmaceutical companies to shift their critical attention and resources away from COVID-19 work to focus on making substantial changes to their business models necessary to comply with this and other recent executive orders,” PhRMA said in a statement. “Increasing U.S. manufacturing of medicines is a laudable goal, but it cannot happen overnight and should not come at the expense of innovation or Americans’ access to the medicines they need.”
Gil Roth, president of the Pharma & Biopharma Outsourcing Association, said it’s unclear how beneficial or detrimental the order will be to the CDMOs he represents. The sector is strong, he noted, and too many questions remain as to whether new policies will truly address the bottlebecks faced by the industry.
“Our members, both on the API and dosage form sides, want a level playing field, not a command economy, and we hope the federal government will take into account this sector’s existing domestic capacity for innovative and generic drugs before implementing more mandates and funding new capacity at taxpayers’ expense,” he wrote in a statement.
Experts have estimated that as much 90% of the active pharmaceutical ingredients in generic drugs sold on US soil is made abroad, although there are no official figures.
Under the new White House directive, government agencies will have to start submitting annual reports of where they source their products. Despite the sweeping “Buy American” headline, waivers apply in specific cases: when it’s against the public interest, the drugs are not produced in the US at a large enough scale, the domestic products would increase the cost by more than 25%, or there’s a national emergency.
FDA commissioner Stephen Hahn has several more tasks on his list.
Working with HHS Secretary Alex Azar, he’s charged with accelerating FDA approval for domestic producers of essential meds, “including those needed for infectious disease and CBRN threat preparedness and response.” In addition, he’s also expected to issue guidances for developing advanced manufacturing techniques, conduct more site inspections overseas and refuse drugs from non-compliant facilities.
It remains to be seen how the new on-shoring initiative will affect drug prices, another key issue Trump is campaigning on.
For its part, the White House insists that lowering the regulatory barrier to domestic pharmaceutical manufacturing (and perhaps raising the bar for foreign players) and investing in new tech would keep drug prices low.
But John and Laura Arnold, who have backed a non-profit generic drug manufacturer, are adopting a wait-and-see stance.
President Trump has signed an executive order related to domestic manufacturing of essential #medicines. The drug supply chain is complex and it is unclear whether the potential actions will remedy the challenges that lead to drug shortages https://t.co/jeQyzzJEyA
— Arnold Ventures (@Arnold_Ventures) August 7, 2020