Jhe Covid-19 pandemic has revealed a serious flaw in the US medical supply chain: an overreliance on imported supplies. Reinvigorating a national supply chain is an important step toward protecting the health of Americans and the nation’s national security.
At the height of the Covid-19 pandemic, supply chain disruptions and export restrictions made it difficult, if not impossible, for hospitals to import crucial materials, from N95 masks to lifesaving drugs. China, which then accounted for more than 85% of all U.S. imports of personal protective equipment (PPE) — including N-95 and other disposable and non-disposable face masks, surgical drapes and surgical towels — declined its PPE exports, removing critical supplies from markets around the world.
In the first year of the pandemic, there were shortages for 29 out of 40 essential medicines to treat people with Covid-19. Between a combination of factory closures, shipping delays and a dramatic increase in global demand for Covid-19 therapies, shortages of essential medicines have quickly emerged. Today, the Food and Drug Administration is reporting shortages of more than 120 drugs in the United States, about three times pre-pandemic levels.
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To better prepare the US medical system for future pandemics, the Centers for Medicare and Medicaid Services recently finalized a proposed rule that will provide financial assistance to hospitals purchasing domestically produced N95 masks. It is a step in the right direction. This will both encourage domestic manufacturing of PPE and wean hospitals off foreign supplies. As the United States strives to build domestic productive capabilities, this bottom-up approach is essential.
But the government must build on that initial effort by encouraging domestic production of more complex medical supplies, such as pharmaceuticals, ventilators and other lifesaving devices.
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Pharmaceuticals are a logical focal point for this work – the United States has long outsourced far too many essential medicines that it needs. Boosting American-made pharmaceutical production will support well-paying jobs and ensure that the country is not exposed to future supply chain outages, whether due to a pandemic, war or disaster. another unforeseen crisis. This is the intent of the American Made Pharmaceuticals Act (S. 3991 and HR 7400), introduced in Congress earlier this year.
An alarming number of drugs are in short supply these days. Antibiotics are 42% more likely to be in short supply in the United States compared to other types of drugs, according to an analysis by the US Pharmacopeia. The shortage of Adderall is so severe that many people with ADHD are unable to fill their prescriptions. Last year fludarabine, a decades-old chemotherapy drug, could be bought wholesale for $110. Yet, due to shortages, its price hit $2,736.
A key factor driving these shortages and price hikes is reliance on foreign manufacturing, with an overreliance on Chinese and Indian facilities. According to Yanzhong Huang, senior researcher in global health at the Council on Foreign Relations, before the emergence of the Covid-19 pandemic in early 2020, Chinese pharmaceutical companies supplied more than 90% of antibiotics, ibuprofen and American hydrocortisone, as well as much of his acetaminophen and heparin.
Covid-19 has served as a wake-up call for American industry, revealing the country’s overreliance on imported necessities, from semiconductors to lifesaving drugs and medical equipment. In light of the supply chain shocks caused by Russia’s invasion of Ukraine and the looming specter of additional regional conflicts, it is imperative that the United States quickly land as many drugs and supplies as possible. .
This effort must cover the entire drug value chain, from easy-to-produce generics to complex biological products. One of the ways the United States can protect itself from drug supply chain shocks and bolster domestic production is to support US manufacturers of biosimilars. Similar to generic versions of brand name small molecule drugs, biosimilars have no clinically significant difference in their function as reference biologic drugs, such as insulin, hormones, and various drugs to treat cancer.
Organic products are extremely expensive to produce. Biosimilars help reduce costs for patients and manufacturers because they are, on average, 27% cheaper to manufacture than their branded reference biologics. The RAND Corporation estimates that biosimilars could lower the cost of biologics used to treat serious diseases such as cancer and rheumatoid arthritis by as much as $38.4 billion from 2021 to 2025, or 5.9% of spending forecast total US organics over this period.
The FDA has approved 39 biosimilar drugs – compared to 73 approved by the European Union – but only a dozen of them are currently produced in the United States. The US government can encourage domestic production through mechanisms similar to the PPE rule. Helping hospitals buy biosimilars and other domestically produced drugs would go a long way to spur additional manufacturing in the United States. Tax incentives to expand biosimilar manufacturing capacity are another approach Congress can take to encourage companies to develop and produce drugs here.
Another option is expanded use of the Strategic National Stockpile, America’s emergency cache of antibiotics, vaccines, chemical antidotes, antitoxins, PPE and other essential medical supplies. Offering tax incentives to U.S. biosimilar manufacturers on the condition that a portion of their biosimilars be sold to stock can both ensure a stable emergency supply of lifesaving drugs and support U.S. businesses and jobs.
With the American Made Pharmaceuticals Act, Congress has the opportunity for a mission-critical, bipartisan victory. It must make domestic manufacturing of medical supplies a top priority and see pharmaceuticals as a leader in the cause. By passing the law and bolstering domestic production of biosimilars, other drugs, and other medical supplies, the United States can create well-paying jobs for its citizens, protect against future supply shocks, whether either by a pandemic or a war, and reduce the cost of living. saving medical supplies for Americans.
Tony Paquin is the President and CEO of iRemedy Healthcare. David Sanders is vice president of government affairs and policy at Coherus BioSciences and executive director of the Securing America’s Medicine and Supply coalition, whose members include AmerisourceBergen, Amneal Pharmaceuticals and Coherus BioSciences — all of which make biosimilars — and others. medicines and drugs. provide manufacturers. Both authors sit on the coalition’s board of directors.
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