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Trump May Use Defense Powers to Require Domestic Drug Production

July 7, 2020, 4:12 PM

President Donald Trump may use his executive powers to require pharmaceutical companies to make drugs domestically to counter Americans’ dependence on overseas manufacturing, Health and Human Services Secretary Alex Azar said.

“The coronavirus pandemic brought home that core elements of our medical-supply chain are just as strategic to our national security as, say, nuclear submarines and aircraft carriers are, and have to be treated with that same kind of approach, which is to say that we have core domestic manufacturing capabilities” Azar said in an interview with Bloomberg Radio on Tuesday.

“It might mean that we have to use our powers under the Defense Production Act or otherwise to fund and incentivize domestic manufacturing” for pharmaceuticals and personal protective equipment, he said. The act gives the president authority to order businesses to prioritize federal needs.

The U.S. drug industry is largely dependent on overseas manufacturers, particularly in China, for key building blocks known as active pharmaceutical ingredients. As the pandemic shut down much of China’s economy earlier this year, drug production there was curtailed. Experts have expressed concern that corners could be cut to ramp up production again, leading to unsafe medications.

On Monday, Trump Chief of Staff Mark Meadows said the administration is preparing a series of executive orders, including one on lowering prescription drug prices, a problem the administration has promised to tackle but hasn’t had much success making a big impact on. When asked about it, Azar would only say that Trump is focused on three areas: getting drugmakers to stop charging the U.S. higher prices than other countries are willing to pay, lowering prescription costs for seniors, and opening the door to imported treatements. The third point is a controversial topic that hasn’t been supported by the Food and Drug Administration in the past.

“He’s deeply committed to the concept that people should have the freedom to get their drugs imported from abroad if they can get them in a safe, effective way that reduces their cost,” Azar said.

To contact the reporters on this story:
Anna Edney in Washington at aedney@bloomberg.net;
Kevin Cirilli in Washington at kcirilli@bloomberg.net

To contact the editors responsible for this story:
Timothy Annett at tannett@bloomberg.net

Heather Smith

© 2020 Bloomberg L.P. All rights reserved. Used with permission.

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