Pandemic Spurs Efforts to Boost Pharma Manufacturing in US

Ongoing shortages of critical medicines, many linked to supply chain disruptions due to the COVID-19 pandemic, continue to generate calls to shift production of drugs and pharmaceutical ingredients from foreign nations to the United States. The globalization of the biopharmaceutical industry during the past 30 years has encouraged production of drugs, particularly generic medicines and APIs, in regions offering cheap labor and less restrictive environmental and other regulations. Now the White House and some members of Congress look to “on shore” drug production to better ensure reliable access to vital medicines now produced overseas.

An example of how the Trump Administration’s “Buy American” campaign could apply to pharmaceuticals is the announcement on May 19, 2020 of an initial $354 million, four-year award to Phlow Corp. by the Biomedical Advanced Research and Development Authority (BARDA) to boost US production for both the ingredients and finished dosage forms of certain drugs experiencing supply shortages (1). Peter Navarro, director of the White House Office of Trade and Manufacturing Policy, made clear that a prime objective is to reduce US reliance on foreign manufacturing and supply chains for “our most important medicines and active pharmaceutical ingredients,” to avoid placing “Americans’ health, safety, and national security at grave risk” (2).

A main question about the BARDA award, which can rise to $801 million over 10 years, is whether the investment can ensure access to high-quality, made-in-the-USA drugs at affordable prices without the large government subsidy. It’s well documented how production of APIs and generic drugs moved to India and China and other regions in the 1980s to reduce costs. One result has been ongoing product shortages, many related to quality manufacturing issues, as firms at home and abroad delayed improvements and modernization of facilities and accepted ingredients with limited quality assurance.

Members of Congress have proposed multiple measures to address US reliance on foreign drug production, some specifically targeting products made in China to protect access to vital medicines in case of a trade war. Other bills seek to encourage more US manufacturing through tax credits and other economic incentives, and to require firms producing finished drugs to disclose more information to FDA on sources for APIs and starting materials. There is little talk, though, about accepting higher prices for generic sterile injectables to ensure product quality.

Inspecting quality

One rationale for boosting pharma production in the US is to facilitate FDA oversight of product quality and compliance with good manufacturing practices (GMPs). The rise in foreign drug production has strained FDA efforts to monitor and inspect manufacturers that export to the US, a situation aggravated by the halt to all drug facility inspections since March 2020 due to the pandemic (3).

FDA oversight of foreign drug manufacturing was revisited at a hearing before the Senate Finance Committee in early June, following up on earlier Congressional reviews of the need for FDA to increase its oversight of overseas firms, particularly those in China and India (3).  FDA reported to the Senate panel that it was conducting more inspections of foreign plants in recent years, a development supported by the Government Accountability Office (GAO), which has conducted regular assessments of FDA’s foreign pharmaceutical inspection program since 2008 due to concerns about inadequate oversight of foreign producers (4). Yet, GAO continues to criticize FDA for routinely providing advance notice to foreign manufacturers of planned site visits, as opposed to unannounced inspections in the US. FDA foreign inspectors also have to rely on local company translators and limited time frames for examining extensive foreign facilities.

Pharma companies, not surprisingly, oppose requirements to shift manufacturing to the US or to disclose proprietary information on ingredient sources. The Pharmaceutical Research and Manufacturers of America (PhRMA) emphasizes that US firms support more than four million jobs in the US, including 120,000 high-wage manufacturing positions at more than 1300 facilities. PhRMA maintains that “geographic diversity” in drug production can best ensure supply stability and warns that efforts to shift all global manufacturing to the US would upset the entire supply chain (5).

Generic-drug makers also are not enthusiastic about made-in-America requirements, but are more receptive to economic incentives for boosting US operations. The Association of Affordable Medicines (AAM) issued a supply chain security “blueprint” in April that calls for the federal government to identify certain “priority medicines” to set the stage for negotiating long-term price and volume guaranteed contracts with manufacturers and for funding construction of US-based facilities to produce needed drugs in short supply. Additional tax incentives would encourage relocation of foreign operations to the US, and FDA would streamline regulatory processes to expeditiously approve new facilities and tech transfer processes (6).

Advocates for boosting pharmaceutical production in the US emphasize that FDA can better ensure the quality of these products through more regular and comprehensive inspections and oversight, while also addressing concerns about security and product availability. At the same time, FDA officials would like to see manufacturers, particularly those gaining public support for constructing new facilities, adopt advanced manufacturing systems better able to ensure more efficient and reliable production of quality medicines, and to bolster supply chain redundancy and reliance. One hope is that policy makers assess issues raised by the current pandemic in considering approaches to better handle future emergencies, which may include strategies to support more drug manufacturing in the US.

References

1. HHS, “HHS, Industry Partners Expand U.S.-Based Pharmaceutical Manufacturing for COVID-19 Response,” Press Release, May 19, 2020.
2. Phlow Corporation, “Phlow Corporation Awarded $354 Million HHS/ASPR/BARDA Contract to Manufacture Essential Medicines in Shortage,” prnewswire.com, Press Release, May 19, 2020.
3. US Senate Committee on Finance, COVID-19 and Beyond: Oversight of the FDA’s Foreign Drug Manufacturing Inspection Process, June 2, 2020.
4. M. Denigan-Macauley, “Drug Safety, COVID-19 Complicates Already Challenged FDA Foreign Inspection Program,” GAO Testimony Before the Committee on Finance, US Congress, June 2, 2020. 
5. N. Longo, “America’s Global Leadership in Biopharmaceutical Manufacturing,” The Catalyst, PhRMA, June 4, 2020.
6. AAM, “A Blueprint for Enhancing the Security of the U.S. Pharmaceutical Supply Chain,” accessiblemeds.org.

Article Details

Pharmaceutical Technology
Vol. 44, No. 7
July 2020
Pages: 14–15

Citation

When referring to this article, please cite it as J. Wechsler, “Pandemic Spurs Efforts to Boost Pharma Manufacturing in US,” Pharmaceutical Tehcnology 44 (7) 2020.