In the wake of the COVID pandemic, consumers have become painfully aware of America’s heavy dependence on imports. The recent Amoxicillin shortage in hospitals has made this particularly clear since the United States is now highly reliant on imported antibiotics and other lifesaving medications. The United States is so deep in the hole when it comes to pharmaceutical imports that the Food and Drug Administration has started to allow certain medications even when they come from substandard overseas factories.
This import dependence is unsustainable, and FDA Commissioner Robert Califf recently warned that “there’s not enough reserve and supply” of generic drugs in the United States. Califf fears “there’s too much at stake when shortages occur” and believes “the economics of the industry” need fixing. He’s urging policies to boost domestic production of generic drugs.
In response to such concerns, Rep. Claudia Tenney, (R-N.Y.), introduced legislation intended to address America’s heavy reliance on drugmakers in China and India. Taking an approach similar to the solar incentives included in the Inflation Reduction Act, Tenney’s “PILLS Act” would use production-based tax credits and domestic content requirements to jumpstart Made in America pharmaceutical manufacturing.
The timing is right for Tenney’s legislation since there’s already bipartisan concern regarding drug shortages. Earlier this year, Senate Majority Leader Chuck Schumer warned of “vulnerabilities and problems” because of America’s generic drug market being “so reliant on foreign actors.” Schumer has called for “incentivizing U.S. drug manufacturing” — something he hopes will “reduce shortages and create good-paying new jobs for Americans.”
Addressing these concerns should be a priority since potentially unsafe drugs are arriving in the United States daily. In part, overseas drugmakers face far less scrutiny than domestic drug manufacturers. But even when the FDA issues frequent “warning letters” to overseas factories for safety violations, nothing gets fixed.
Consider Aurobindo Pharma — America’s largest supplier of generic drugs.
Aurobindo’s factories in India have been cited by the FDA for unsafe manufacturing practices, including a warning letter to Aurobindo last year for “significant deviations” from safe manufacturing practices.
In 2019, federal regulators warned Aurobindo of “repeated failures” to address safety concerns, including “contamination at levels above the acceptable limit” and “inadequate cleaning procedures.” More recently, Aurobindo was forced to recall a prescription blood thinner that was found to be “subpotent.”
Other pharmaceutical manufacturers in China and India routinely receive similar warning letters from the FDA for safety violations. These include carcinogenic ingredients in medicines as well as manufacturing processes that can result in “fatal infections in a broad array of patients.” Incredibly, the FDA has not made in-person inspections in many of these facilities in recent years — and has not visited any drug factories in China since 2019.
Americans take 131 million prescription drugs daily. And 90 percent of these prescriptions are filled with generic medications. U.S. patients depend on imports for at least two-thirds of these generic drugs. Nearly 90 percent of the active pharmaceutical ingredients the United States needs to manufacture medications are also made overseas. This not only threatens patient safety but also hurts the competitiveness of America’s remaining pharmaceutical producers.
It will take time for the United States to rebuild its domestic pharmaceutical manufacturing. But a moonshot effort is urgently needed. Rep. Tenney’s PILLS Act could give pharmaceutical companies the tax incentives needed to shift generic drug production back to the United States. To save lives, Congress should quickly pass the PILLS Act as soon as possible.
