A two-part executive order (EO) from President Donald Trump addressing the US medical supply chain is unlikely to have short-term re-shoring impacts but it may shed light on where products are sourced, a goal that enjoys some congressional support.
On Aug. 5, President Trump announced an EO that adds new reporting requirements for medical product manufacturers, illuminating source materials and putting domestic production facilities on more equal footing with those located abroad. The EO also requires certain federal agencies to purchase “essential medicines, medical countermeasures and critical inputs” from domestic sources. It would also accelerate approval or clearance of domestically produced products.
“It is critical that we reduce our dependence on foreign manufacturers for Essential Medicines, Medical Countermeasures, and Critical Inputs to ensure sufficient and reliable long-term domestic production of these products, to minimize potential shortages, and to mobilize our Nation’s Public Health Industrial Base to respond to these threats,” the order stated.
Supply chain transparency:
Domestic manufacturing and procurement:
Given the caveats within the EO and the implementation timeline, it’s unlikely that the EO will have an immediate effect on domestic production of pharmaceuticals or medical devices for which the majority of production occurs overseas. However, a closer look at the details suggest that the supply chain elements could have bigger ramifications in the short term.
For example, in cases where much of the product is already produced overseas, the domestic production requirement wouldn’t apply. According to the FDA, as of May 2020, active pharmaceutical ingredient manufacturing facilities in China accounted for 13% of drugs in the US market while India accounted for 19%.
Alternatively, some generic medicines such as antibiotics are almost exclusively manufactured outside the US. According to a February testimony by former FDA Commissioner Scott Gottlieb, 80% of antibiotics in the US are made in China and 40% of heparin is imported from the country.
While the timeline for many of the supply chain elements in the EO run into the next presidency, they could have more stamina.
HRI has identified multiple bills in Congress that include many of the elements in the executive order, including the Securing America’s Medicine Cabinet Act (H.R. 6801, S. 3432) and the Medical Supply Chain Security Act (HR 6049, S. 3343)
While all of the bills are sponsored by Republicans, they each have at least one Democratic co-sponsor.
The CARES Act passed earlier this year also contains language around shoring up the US supply chain, including increasing contingency planning requirements for drug and medical device manufacturers.