“There’s a difference in knowing something and realizing something. We’ve known for quite a while now that we’re too dependent on other countries for our medical supplies. But during this pandemic, I think we’ve realized it,” U.S. Rep. Buddy Carter (R-Ga.) said at a recent congressional hearing on the progress being made in developing COVID-19 vaccines.

That realization has countries across the globe questioning their reliance on trade partners as they continue to compete for limited supplies of essential drugs, active pharmaceutical ingredients (APIs) and medical supplies amid threats of export bans.

One of the wake-up calls during the pandemic came in March when India, which imports about 84% of its APIs from China, restricted the export of 26 APIs and drugs to ensure it maintained an adequate supply for its own use. The APIs for those drugs were produced in regions of China that had been hit with stringent lockdown measures that halted manufacturing and disrupted transportation as the Chinese government sought to contain the internal spread of the SARS-CoV-2 virus.

In the U.S., the realization of the country’s reliance on others for essential supplies and drugs has led to a raft of legislation aimed at bringing more drug and device manufacturing home. It also resulted in President Donald Trump’s “Buy American” executive order last week calling on government agencies to increase their procurement of essential drugs and medical countermeasures (MCMs) made in the U.S.

While the order is aimed at expanding domestic capacity and calls for “adequate redundancy [to be] built into the domestic supply chain,” it wouldn’t necessarily produce resiliency. A resilient supply chain is one that is agile because it has the processes in place “that can leverage simplified or alternative materials if shortages arise in the market,” Mike Piccarreta, a partner at global consulting firm Kearney, told BioWorld.

In a pandemic or emergency, having geographically diverse alternative sources could make a big difference in a company’s, or nation’s, ability to meet an increased demand.

Trump’s executive order gives the FDA commissioner, in consultation with the heads of other relevant agencies, 90 days to draw up a list of essential medicines, MCMs and “their critical inputs that are medically necessary to have available at all times in an amount adequate to serve patient needs and in the appropriate dosage forms.”

The order then instructs federal agencies that procure drugs and devices to limit competition to only essential medicines, MCMs and critical inputs produced in the U.S.

Challenges of domesticating the supply chain

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U.S.-made drugs and MCMs are defined as those manufactured, prepared, propagated, compounded or processed in the U.S. with critical inputs that also are produced in the U.S. The order defines “critical inputs” as “API, API starting material and other ingredients of drugs and components of medical devices that the FDA commissioner determines to be critical in assessing the safety and effectiveness” of essential drugs and MCMs, including personal protection equipment.

Bringing that manufacturing back home could be a tall order. Currently, 28% of the manufacturing facilities making APIs for all drugs marketed in the U.S. are in the U.S., 13% are in China and the remaining 59% are in other countries, according to the FDA.

However, the location of facilities making APIs for generic drugs, which account for 90% of U.S. prescriptions, shows greater reliance on foreign API manufacturing, as only about 12% of the facilities listed with the FDA as API manufacturers for generic drugs are located in the U.S.

Those figures don’t show the full reliance on foreign manufacturing as they only track facilities registered with the FDA, not the volume or number of APIs being produced at the facilities. They also don’t show where the APIs are being distributed or identify the source of the raw materials those plants use. The FDA doesn’t track the source of raw materials, much of which is produced elsewhere.

The challenge of quickly domesticating essential drug and device production is made tougher by COVID-19, as so many companies are focused on developing and manufacturing drugs, diagnostics, supplies and vaccines needed to address the pandemic.

“The administration is forcing biopharmaceutical companies to shift their critical attention and resources away from COVID-19 work to focus on making substantial changes to their business models necessary to comply with this and other recent executive orders,” Pharmaceutical Research and Manufacturers of America President and CEO Stephen Ubl said. “Increasing U.S. manufacturing of medicines is a laudable goal, but it cannot happen overnight.”

He warned that the executive order “could disrupt the global pharmaceutical supply chain, jeopardizing our ability to respond to the current crisis and potentially leading to major long-term supply chain disruptions, including shortages.” Rather than mandates, Ubl recommended policies that would enable more domestic manufacturing without risking the stability of supply chains.

(Editor’s note: This is the first in a series looking at manufacturing and supply chain challenges and the lessons that should have been learned from previous emergencies.)