The Trump administration is preparing an executive order that would require certain essential drugs and medical treatments for a variety of conditions be made in the U.S.
The order comes in light of drug and device shortages during the Covid-19 pandemic. A draft of the order is circulating inside the government and was obtained by Bloomberg News.
“It is critical that we reduce our dependence on foreign manufacturers for essential medicines, medical countermeasures’’ to “ensure sufficient and reliable long-term domestic manufacturing’’ that prevents shortages and supplies to “mobilize our nation’s public health industrial base’’ when needed, says the nine-page draft.
The draft order is still in the preliminary stages and hasn’t gotten sign off from the president. It has reached other federal agencies for review and coordination, including the Pentagon and the Department of Health and Human Services. A Pentagon official Thursday said the draft order was being reviewed and coordinated within the relevant office.
The executive order would limit any federal contracts for those supplies to manufacturers in the U.S. and would require that production be divided among multiple companies to ensure price competition. The drugs and devices covered by the order include anything used to respond to a public health emergency or biohazard attack. The list of “essential medicines” will be later determined, according to the executive order.
The exceptions would be if U.S. production isn’t in the public interest, the treatment or device isn’t produced in sufficient quantities in the U.S., or if it raises prices by more than 25%.
The Food and Drug Administration says that 80% of the active ingredients in drug production comes from outside of the U.S.
Lawmakers and health officials have expressed concern about contamination of medications made in overseas factories where U.S. quality standards often aren’t met. Millions of blood-pressure pills were recalled starting almost two years ago after it was discovered they were contaminated with a probable carcinogen. Many of those pills or their active ingredients were made in China and India.
The federal government frequently must create incentives for companies to develop medical treatments for public health emergencies because they aren’t typically profitable. The HHS spends billions each year partnering with pharmaceutical companies to get them to research and produce the drugs and devices.
The HHS would be tasked with identifying vulnerabilities in the supply chain for those drugs and medical devices and share information with other federal agencies under the order. The HHS would also be able to write new regulations on the sources of those drugs, their use, and how facilities are inspected.
The order would likely raise many questions in the industry. “The pharmaceutical and device chain is incredibly complex, and it will be very difficult, at least in the near term, to become completely independent from foreign sources,” said Chris Meekins, former HHS deputy assistant secretary for preparedness and response who is now a health-care policy research analyst at Raymond James.
The HHS would have the authority to use the Defense Production Act to prioritize any contracts for the medicines or devices.
The Environmental Protection Agency would be directed to streamline the domestic production of active pharmaceutical ingredients and other critical components used to make drugs.
“If you’re going to focus on the national security and health security threat of having essential medicines produced overseas, you have to look at the entire supply chain, not just the last step in it,” Meekins said. “Having a manufacturer in the United States for the finished product does little good if they cannot have access to active pharmaceutical ingredients or raw materials.”
The FDA would be directed to accelerate the clearance of any of the drugs or devices.
The order also would require the defense secretary to revise pertinent acquisition regulations “with respect to the procurement of Essential Medicines and Medical Countermeasures,” within 30 days. Medical countermeasures are FDA-regulated products that may be used in the event of a public health emergency.
The U.S. Trade Representative would be required to modify all free trade and World Trade Organization agreements to exclude coverage of essential medicines and medical countermeasures.
—With assistance from Jenny Leonard, Anna Edney, Justin Sink, and Jennifer Jacobs