The US and the Bio/Pharma Supply Chain: What’s Next?
The President Joe Biden convened the inaugural meeting of the White House Council on Supply Chain Resilience to outline a plan to address supply-chain vulnerabilities and support domestic manufacturing, including for the bio/pharma industry.
US national policy and supply chains
This past week (November 27, 2023), President Joe Biden convened the inaugural meeting of the White House Council on Supply Chain Resilience, a cross-industry and government initiative to address the supply-chain challenges and vulnerablities exposed during and post-pandemic and ways to strengthen US-based manufacturing and its supply chains. In all, the Biden Administration outlined 30 new actions to strengthen US supply chains and secure key sectors, which includes steps through the Defense Production Act to support US-based domestic manufacturing of essential medicines, new data collaboration to spot supply-chain risks sooner, and transportation and logistics initiatives to ensure the continued flow of supply chains.
Council on Supply Chain Resilience
The overarching mechanism by the Biden Administration to address national supply-chain vulnerabilities is the White House Council on Supply Chain Resilience, a newly created entity charged with advancing his long-term, government-wide strategy to build enduring supply chain resilience. The Council is co- Agriculture, Commerce, Defense, Energy, Health and Human Services, Homeland Security, Housing and Urban Development, the Interior, Labor, State, Transportation, the Treasury, and Veterans Affairs; the Attorney General; the Administrators of the Environmental Protection Agency and the Small Business Administration; the Directors of National Intelligence, the Office of Management and Budget, and the Office of Science and Technology Policy; the Chair of the Council of Economic Advisers; the US Trade Representative; and other senior officials from the Executive Office of the President and other agencies.
The Council will complete a first-ever quadrennial supply-chain review by December 31, 2024. As part of the review, the Council will update criteria on industries, sectors, and products defined as critical to national and economic security. In addition, 12 months after the Council promulgates the criteria, and annually thereafter, the Council will apply the criteria to review and update the list of critical sectors, as appropriate.
The bio/pharma industry and the supply chain
The bio/pharma industry was highlighted in the White House briefing as one of the industries in which the Biden Administration plans to address supply-chain issues and increase US-based production of essential medicines, which are broadly defined as those medicines crucial for the health of a population, and largely include generic medicines. Specifically, the Administration outlined plans to use the Defense Production Act to produce more essential medicines in the US and mitigate drug shortages.
Administration officials said that President Biden will issue a Presidential Determination to broaden the Department of Health and Human Services’ (HHS) authorities under Title III of the Defense Production Act to enable investment in domestic manufacturing of essential medicines, medical countermeasures, and critical inputs that have been deemed by the President as essential to the national defense. Among the actions being taken by the HHS, the HHS has identified $35 million for investments in domestic production of key starting materials for sterile injectable medicines. The HHS will also designate a new Supply Chain Resilience and Shortage Coordinator for efforts to strengthen the resilience of medical product and critical food supply chains and to address related shortages. The White House said that the HHS intends to institutionalize this coordination to advance the department’s supply-chain resilience and shortage-mitigation goals over the long term. The Department of Defense will also soon release a new report on pharmaceutical supply-chain resilience aimed at reducing reliance on what the Administration termed as “high-risk foreign suppliers.” These actions are a subset of the Administration’s broader work to increase access to essential medicines and medical products. Additionally, the Department of Commerce is partnering withthe HHS to assess industry and import data that can help address foreign dependency vulnerabilities and points of failure for critical drugs.
New cross-governmental supply chain data-sharing capabilities
In addition to industry-specific measures, there are several actions being taken by the Administration to overall improve risk monitoring, data collaboration, and support domestic manufacturing. The Administration announced several cross-government partnerships to improve supply-chain monitoring and strategy. These include the Department of Commerce’s new, first-of-its-kind Supply Chain Center, which is integrating industry expertise and data analytics to develop innovative supply-chain risk-assessment tools and is coordinating deep-dive analyses on select critical supply chains to drive targeted actions to increase resilience. This Center is building broad partnerships across government, industry, and academia, including collaborating with the Department of Energy to conduct deep-dive analyses on clean energy supply. The Department of Commerce will convene a diverse array of public and private stakeholders at a Supply Chain Data and Analytics Summit in 2024. A key aim of the summit will be to invite expert input into supply-chain risk-ssessment models and tools. The summit will also assess data availability, utility, and limitations and consider actions to improve data flows
Smart manufacturing plan
The Department of Energy’s Office of Energy Efficiency and Renewable Energy Advanced Materials and Manufacturing Technologies Office is sponsoring a study by the National Academies of Science, Engineering, and Medicine to develop a nationwide plan for smart manufacturing. The report will establish key priorities for investment to support new digital and artificial intelligence technologies. These investments will enhance the productivity and security of the manufacturing systems that are critical for maintaining domestic supply chains.
Deploying new capabilities to monitor existing and emerging risks
The Department of Homeland Security (DHS) has announced the launch of a new Supply Chain Resilience Center (SCRC), which will be dedicated to ensuring the resilience of supply chains for critical infrastructure. Near-term priorities will include addressing supply-chain risks resulting from threats and vulnerabilities inside US ports. Additionally, in 2024, in collaboration with other federal agencies and foreign governments, the DHS will facilitate at least two tabletop exercises designed to test the resilience of critical cross-border supply chains.
As part of the Bipartisan Infrastructure Law implementation, the Department of Transportation is launching its Office of Multimodal Freight Infrastructure and Policy. This office is responsible for maintaining and improving the condition and performance of the nation’s multimodal freight network, including through the development of the National Multimodal Freight Network, review of State Freight Plans, and the continued advancement of the FLOW initiative in partnership with the Bureau of Transportation Statistics. The Department of Transportation’s Freight Logistics Optimization Works (FLOW) program is a public-private partnership that brings together US supply-chain stakeholders to create a shared, common picture of supply chain networks and facilitate a more reliable flow of goods. The Department of Transportation has announced a new milestone for FLOW, in which participants are beginning to utilize FLOW data to inform their logistics decision making, helping to avoid bottlenecks, shorten lead times for customers, and enable a more resilient and globally competitive freight network through earlier warnings of supply chain disruption. These new analytical capabilities will enable the White House Council on Supply Chain Resilience to coordinate a more complete, whole-of-government critical supply-chain monitoring function.
To more consistently track risk and opportunity across energy supply chains, the Department of Energy is developing an assessment tool that accounts for raw materials, manufacturing, workforce, and logistics considerations. Additionally, to help assess the potential for trade disruptions of select critical minerals and materials, the Department of the Interior’s US Geological Survey will map and develop geospatial databases for select global critical product supply chains, with a current focus on semiconductor component and will seek designation by the Chief Statistician of the United States of a federal statistical unit providing the nation’s official minerals statistics.
In addition to these actions domestically the Biden Administration outlined key engagement with allies and partners to strengthen global supply chains, including deepening international early-warning systems to detect and respond to supply-chain disruptions in critical sectors. Within the bio/pharma industry specifically, the Global Regulatory Working Group on Drug Shortages, currently chaired by the US Food and Drug Administration, withAustralia, Canada, the European Union, Japan, the UK, and the World Health Organization, meets quarterly to discuss product shortages participating jurisdictions are encountering and ways such shortages are being addressed. The group’s exchange of information helped address product shortages experienced by each partner during the COVID-19 pandemic and subsequent “tripledemic” including COVID-19, influenza, and respiratory syncytial virus.
Through the President’s Emergency Plan for Adaptation and Resilience (PREPARE), the US government funds activities to improve the weather, water, and climate-observing capabilities and data sharing in regions and countries that are needed to produce actionable local, regional, and global climate information and minimize impacts upon infrastructure, water, health, and food security.
The Americas Partnership for Economic Prosperity is focused on, among other things, strengthening and diversifying supply chains. In its first year of work, the Americas Partnership will focus on the development of regional competitiveness plans in three critical sectors: medical supplies, clean energy, and semiconductors.