Elizabeth Warren Gets it Right on Pharmaceutical Manufacturing

Now that President Biden’s $2 trillion infrastructure spending proposal is out, which includes funding for local pharmaceutical supply chains, we hope that Senator Elizabeth Warren (D-MA) will reintroduce her July 2020 bill on reshoring and rebuilding domestic manufacturing of critical medicines. We think it will be part of a bipartisan push in new infrastructure legislation to cut dependency on foreign supply chains.

Warren and Tina Smith (D-MN) wrote the Pharmaceutical Supply Chain Defense and Enhancement Act during the height of the SARS 2 coronavirus pandemic, and they recognize the importance of focusing on critical drug resiliency in a post Covid-19 world. Most of the drugs the U.S. is lacking in its stockpiles are off-patent generic drugs that are highly dependent on imports from India and, increasingly, China. Both countries are also focused on keeping more of their supply at home in case of emergencies like we have just witnessed over the past 12 months, meaning the U.S. would be stretched particularly thin if our main sources are building their stockpiles.

CPA backs Warren’s legislation. We have advocated for reshoring of essential medicine, something that the Trump administration moved on. The FDA published its list of essential medications late last year, many of them in short supply.

We believe these low-profit medications should not be looked at as mere commodities, but as strategic assets for the health and well-being of the nation.

As these generics are not a high-margin business, manufacturers and labs need government procurement contracts with their eyes on the long term in order to make a financial go to produce locally. Many of the drugs on the FDAs list are used in everyday emergency and hospital care settings, including pediatric cancer treatments. The Medicare system is the largest buyer of generic drugs.

The American Rescue Plan dedicated $10 billion in the local pharmaceutical sector, but Biden’s American Jobs Plan, released yesterday, proposes $30 billion over four years to “create U.S. jobs” and make investments “to shore up our nation’s strategic national stockpile.”

“Our bill will end our overreliance on foreign countries and give us the tools we need to produce the critical drugs that millions of Americans depend on here at home,” Warren said last July.

“We need to make sure we’re able to produce the life-saving medicine Americans need here at home, so we don’t have to rely on other countries for the critical drugs we need,” said Senator Smith in the same press release.

Their bill calls for $1 billion a year for five years to go towards funding the Biomedical Advanced Research and Development Authority (BARDA) to manufacture “critical drugs” domestically. It would also create a government market for domestically-produced pharmaceuticals by requiring federal government agencies, like the Veterans Administration, to purchase American-made drugs and give funding to subsidize the purchase of these drugs upwards of an additional $1 billion over their current procurement budgets.

Although the bill was never signed into law, at least one part was covered in an Executive Order last year.

CPA believes that this bill goes beyond Covid and future pandemics. While Covid can be the impetus to push forward on Warren’s legislation, there is clearly a much wider group of people who will benefit from this, including local manufacturers, local workers, and the public health system in general. The pandemic highlighted our nation’s vulnerabilities on foreign supply chains, especially for critical products. As we plan for the future, lawmakers must recognize that we need to focus on more than just pandemic preparedness. We think Warren’s bill is a great start and hope she has no trouble finding more supporters to join her as the infrastructure debate takes over Congress in the months ahead.

 

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