US government works towards ‘reshoring’ pharma production
15. Juni 2021
Following on from an executive order in February that led to a multi-industry review of key supply chains, President Joe Biden’s administration has announced plans to tackle the US’s dependency on imports for critical medicines, particularly for COVID-19. It has launched a strategy that will seek to drive the ‘reshoring’ of some pharmaceutical manufacturing.
As part of this, the administration has asked the Department of Health & Human Services (HHS) to establish a public-private consortium to produce critical drugs in the US, based on its powers under the Defense Production Act and existing partnerships. Initially, the consortium will identify 50-100 drugs from the FDA’s essential medicines list for prioritisation.
The HHS will also invest around $60 million from the American Rescue Plan to create “novel platform technologies” for API production in the US, potentially including 3D printing and continuous manufacturing. Other agencies have been called on to increase funding for the development of advanced manufacturing technologies for supportive care fluids, APIs and finished dosage forms.
Further planned measures under this initiative include the creation of new authorities to help track the sourcing of API, as well as tracking production on a facility-by-facility basis. Under this initiative, the origin of all drug ingredients and finished drugs would have to be identified on the label.
It is estimated that 87% of the generic drugs the US uses are imported and that imports account for all or part of 90% of prescriptions that are filled there. The exact figure is unknown, however, because much of the relevant information is proprietary. While the US’s dependence on imported materials is well known, the scale of it is still thus obscure.
The COVID-19 pandemic has thrown the issue into focus, especially in the wake of the Trump administration’s trade war with China and continuing suspicion of the country that supplies many of the raw materials used in drugs. Considerably more stringent bills have been introduced into Congress.
However, the pharma industry has warned that the administration’s aims will not be easy to achieve, because of the cost advantages that drove manufacturing abroad in the first instance. Pharmaceutical Research & Manufacturers of America (PhRMA) argued that moving all manufacturing back to the US “is impractical and likely not feasible”. Instead, policymakers should “take a long-term, more holistic look at global pharmaceutical manufacturing supply chains before jumping to rash proposals that may cause significant disruptions to the US supply of medicines”.
The Biden administration has already been investing in domestic production of COVID-19 drugs. In April, the Biomedical Advanced Research & Development Authority (BARDA) signed a $354 million deal with Phlow Corporation to produce essential medications at Virginia Commonwealth University’s Medicines for All Institute. The total cost of this could reach $812 million over ten years.
Phlow and its partners, which include Ampac Fine Chemicals, producing APIs its own site in Virginia, will make COVID-19 treatments in the first instance. Later, they aim to create an infrastructure to continue manufacturing essential medicines that are in short supply for domestic use.
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