Biden administration outlines plan to address US supply chain vulnerabilities

The United States is taking steps to address vulnerabilities in US supply chains, according to a new report published by the White House.
 
These steps include improving domestic manufacturing of critical medicines and active pharmaceutical ingredients, increasing investments in sustainable domestic supply chains, and better monitoring of supply chain disruptions, the Biden administration said.
 
On Monday, the Biden administration released a report of findings from a 100-day review of US supply chains. The report followed an executive order issued by President Biden in February, which highlighted vulnerabilities in in US supply chains and offered proposals to strengthen critical product supply chain areas by addressing these bottlenecks and vulnerabilities.
 
While the White House report covered a broad range of industries, one critical supply chain identified was key pharmaceutical products and active pharmaceutical ingredients (APIs). In particular, the COVID-19 pandemic “highlighted the critical importance of a resilient U.S. healthcare manufacturing sector,” the administration said. However, the report noted the US remains reliant on importing key pharmaceutical products and active pharmaceutical ingredients (APIs) manufactured in foreign countries. The White House report estimates 90% of generic drugs in the US use APIs, and 87% of API facilities are outside the United States. Further, “there is little transparency into the origins of API within generic drugs,” the report stated.
 
“China and India are estimated to control substantial parts of the supply chain where there have been issues with shortages due to a range of disruptions that have impacted supply as well as quality and safety. The drive toward lower costs as well as unfair trade practices have led to a hollowing out of domestic production. A new approach is needed to ensure more resilient supply chains that includes improving transparency, building emergency capacity, and investing in domestic production,” the administration said.
 
There have also been unique changes in demand and new supply chain issues that have emerged as the COVID-19 pandemic has shifted in the US, the administration said. “While these short-term supply chain disruptions are temporary, the President has directed his Administration to closely monitor these developments and take actions to minimize the impacts on workers, consumers, and businesses in order to bolster a strong economic recovery,” according to the statement.
 
Acting FDA commissioner Janet Woodcock welcomed the proposed actions. "Last year the American people experienced a widespread and significant shortage of N95 respirators for healthcare workers and masks to protect essential workers and others, and year after year we see shortages of medicines and medical supplies like saline,” said Woodcock in a statement released Tuesday by the department of Health and Human Services. “Pharmaceutical supply chains are essential for the national and health security and economic prosperity of the United States, yet the COVID-19 pandemic revealed just how vulnerable the supply chain is in this country. Now is the right time to take action to keep the U.S. drug supply chain secure and resilient.”
 
The Biden administration’s response
In response to the issues outlined in the report, the administration said it was creating a new Supply Chain Disruptions Task Force to address issues in the supply chain. In a fact sheet published on the White House website, the administration also called for Congress to create a Supply Chain Resilience Program, led by the Department of Commerce, with $50 billion in funding “to create a focal point within the government to monitor and address supply chain challenges.”
 
To address some of these issues, the Biden administration announced it was going to use the Defense Production Act (DPA) to increase production capacity. “A DPA Action Group should determine how best to leverage the authorities of the DPA to strengthen supply chain resilience, building off work done to respond to the COVID-19 pandemic,” the administration said.
 
According to the fact sheet, the administration also said they were investing in new manufacturing processes for key pharmaceuticals and APIs, would invest in disadvantaged small- and medium-sized businesses manufacturing products in critical supply chains, and improve transparency of the pharmaceutical supply chain. The Biden administration also announced it would “[l]everage the government’s role as a purchaser and investor in critical goods.”
 
“As a significant customer and investor, the Federal Government has the capacity to shape the market for many critical products. The public sector can deploy this power in times of crisis, as in the case of Operation Warp Speed, or in normal times. The Administration should leverage this role to strengthen supply chain resilience and support national priorities,” they said.
 
In addition, the administration plans to work with Congress to restore the National Defense Stockpile, and will consider supply chain resilience when developing trade policies, particularly with China.
 
 
Response from the generics industry
In a statement, the Association for Accessible Medicines (AAM) supported the Biden administration’s 100-day review.
 
“The Biden-Harris administration has produced a thoughtful plan to strengthen the security of the U.S. pharmaceutical supply chain that recognizes the importance of engaging with our allies and creating the incentives necessary to encourage additional production of essential medicines here in the United States,” Dan Leonard, AAM president and CEO, stated in a press release.
 
“AAM and our member companies are ready to partner with the Biden-Harris administration to ensure that the generic supply chain, which performed exceptionally well since the onset of the COVID-19 pandemic, is further strengthened. We believe that with the right conditions and incentives in place, the United States can play a larger role in the global production of essential medicines,” Leonard said.
 
Biden administration report