The Biden Administration has announced a series of actions and recommendations to improve supply-chain resilience in several industries, including pharmaceuticals.

In February (February 2021), President Joe Biden issued an executive order that directed an 100-day review of certain industrial supply chains as part of an effort to identify near-term steps the Administration can take, including with Congress, to address vulnerabilities in supply chains. In addition to pharmaceuticals and ingredients, the other product areas for the 100-day supply-chain review were semiconductors, key minerals and materials, such as rare-earth metals, and advanced batteries, such as those used in electric vehicles.

The Administration has released its findings from this review, which include identifying vulnerabilities in those supply chains and recommendations to address those vulnerabilities with both industry-specific and general trade measures through executive and legislative action. Tbe full report may be found here. 

“The COVID-19 pandemic highlighted the critical importance of a resilient US healthcare manufacturing sector. Private sector innovation and robust federal investment allowed the US to rapidly develop and strengthen COVID-19 supply chains,” said the White House in a June 8, 2021 press summary. “But the United States remains critically dependent on imports for a range of key pharmaceutical products and APIs… A new approach is needed to ensure more resilient supply chains that includes improving transparency, building emergency capacity, and investing in domestic production.”

For pharmaceuticals, the Administration is recommending ways to increase domestic production of essential medicines, facilitate manufacturing innovation, and supporting other measures to facilitate trade and production of US supply chains.

Onshoring production of essential medicines, manufacturing innovation

On an immediate basis, the President is directing the Department of Health and Human Services (HHS), under the Defense Production Act and building on current public-private partnerships, to establish a public-private consortium for advanced manufacturing and onshoring of domestic essential medicines production. The consortium’s first task will be to select 50 to 100 critical drugs, drawn from the Food and Drug Administration’s essential medicines list, to be the focus of an enhanced onshoring effort.

The HHS will make an initial commitment of approximately $60 million from the Defense Production Act appropriation to develop novel platform technologies to increase domestic manufacturing capacity for active pharmaceutical ingredients (APIs). The Administration says that greater API production domestically will help reduce reliance on global supply chains for medications that are in shortage, particularly during times of increased public health need.

Longer term, the Administration says that federal agencies should increase their funding of advanced manufacturing technologies to increase production of key pharmaceuticals and ingredients, including using both traditional manufacturing techniques and on-demand manufacturing capabilities for supportive care fluids, APIs, and finished dosage form drugs.

The Administration is also directing the HHS to develop and make recommendations to Congress on new authorities that would allow the HHS to track production by facility, track API sourcing, and require that API and finished dosage form sources be identified on labeling for all pharmaceuticals sold in the US.

Other measures

The Biden Administration also announced a series of actions to be taken across the federal government to support supply-chain resilience, workforce development, production and innovation, and strong sustainability and labor standards domestically and abroad. Highlights of some of those measures are outlined below. 

Federal procurement of US-made goods. The Federal Acquisition Regulatory Council, which assists in the direction and coordination of government-wide procurement policy and regulatory activities, plans to issue a proposed rule to develop a new process for preferencing critical products that are in manufactured products or component parts to leverage the buying power of the nearly $600 billion in federal contracting to strengthen domestic supply chains for critical products.

Global Forum on Supply-Chain Resilience. The President will convene a global forum on supply-chain resilience that will bring together key government officials and private-sector stakeholders from across key US allies and partners to collectively assess vulnerabilities, develop common approaches to supply-chain challenges, and work to strengthen these supply chains.  

US Supply-Chain Resilience Program. The Administration is also recommending that Congress enact a Supply Chain Resilience Program at the Department of Commerce to create a focal point within the federal government to monitor and address supply-chain challenges. It is recommending $50 billion in funding to support such a program in supply chains across a range of critical products.  

Defense Production Act Action Group. The Administration is also recommending ways to deploy the Defense Production Act (DPA) to expand production capacity in critical industries through the formation of a DPA Action Group to determine how best to leverage the authorities of the DPA to strengthen supply-chain resilience by building off work done to respond to the COVID-19 pandemic.

Improve information-sharing for risk mitigation. The Administration is also directirng the Department of Commerce to lead a coordinated effort to bring together data from across the federal government to improve the federal government’s ability to track supply and demand disruptions and facilitate information sharing between federal agencies and the private sector to more effectively identify near-term risks and vulnerabilities.

Addressing unfair trade practices. The Administration also will establish a trade strike force, led by the US Trade Representative, to propose unilateral and multilateral enforcement actions against unfair foreign trade practices that have eroded critical supply chains. The trade strike force will also identify opportunities to use trade agreements to strengthen collective approaches to supply-chain resilience with US partners and allies.

US manufacturing and exports. The Administration will also examine the ability of the US Export-Import Bank (EXIM) to use existing authorities to support US manufacturing of products. This involves the EXIM developing a proposal for Board consideration regarding whether EXIM should establish a new Domestic Financing Program that would provide financing to support the establishment and/or expansion of US manufacturing facilities and infrastructure projects in the US that would facilitate US exports.

Increasing national stockpiles. The Administration is recommending that both the Administration and Congress take actions to recapitalize and restore the National Defense Stockpile of critical minerals and materials. In the private sector, the Administration is recommending that industries that have faced shortages of critical goods should evaluate mechanisms to strengthen corporate stockpiles of select critical products to ensure greater resilience in times of disruption.

Source: The White House