The COVID-19 pandemic has exposed many issues in American society, ranging from public health and racial disparities to economic challenges and supply chain limitations. As was the case with many countries around the world, the United States has been caught without a detailed plan to deal with a pandemic. Hospitals were unprepared for the deluge of patients, and healthcare providers lacked access to the supplies they needed to protect themselves. State and national leaders have provided mixed indications on how to close and when to reopen, and there continue to be strong partisan differences in how people feel about wearing masks and getting vaccinated.
The result has been nearly 600,000 deaths in the United States, the loss of millions of jobs and an increase in the inequalities that exist based on race, sex, age, income and geography. While more than half of Americans have now received at least one dose of the COVID-19 vaccine, a significant number indicate that they do not want to be vaccinated. This reluctance runs the risk that the virus will not be eradicated and may return at some point in the future.
One of the most fundamental challenges that remain as we move forward is the fact that most pharmaceuticals and personal protective equipment are manufactured outside of the United States. It came as a shock to many people to learn during the pandemic that many of their medicines and essentials came from outside the country. In line with the trends that have emerged over the past decades with manufacturing in general, China and India are major suppliers of drugs, as are Germany, Switzerland, UK, France, Israel, l ‘South Africa and Brazil. Most of the US pharmaceutical companies have outsourced manufacturing to overseas sites. In this situation, supply chains are long and there are often logistical issues that limit the availability of necessary treatments.
Now, a new report from the Washington University Olin School of Business describes several reasons why this is the case and what we need to do about it. Regarding the causes of drug shortages, authors Tony Sardella and Paolo De Bona cite a 2019 US Food and Drug Administration analysis that focused on three factors: “1) lack of incentives to produce. less cost-effective drugs; 2) the market does not recognize or reward the manufacturer for mature quality management systems, 3) the logistical and regulatory challenges that make it difficult to recover from a disruption. Taken together, these issues help people understand how we got to where we are today and what leaders can do to address these issues.
According to the authors, there are several ways to improve the situation. These steps include decreasing dependence on foreign drug manufacturers, expanding drug manufacturing in the United States, supporting domestic capacity financially, and providing faster drug approval processes. .
Decrease dependence on a single country
Part of the current challenge is the heavy reliance on foreign manufacturers. Few drugs are manufactured in the United States and this creates domestic risks. In a world with a considerable number of geopolitical uncertainties, it is difficult to rely on nations with which America has a conflicted relationship. At present, many issues complicate relations with China, including trade, national security and foreign policy. As the two countries move from a relationship emphasizing cooperation to one that is either competitive or adversarial, the risk of drugs being made in China increases. Depending on how the relationship fluctuates, there may be times when China needs to reorient the manufacturing of drugs and PPE towards domestic needs rather than foreign needs. Or they could use its control over drug production to reward allies and punish opponents. Either way, it is risky for the United States to rely heavily on China during a time of considerable tension.
Developing drug manufacturing capabilities in the United States
At the same time, it makes sense to reduce dependence on foreign manufacturers and expand US drug manufacturing capabilities. For drugs essential to the health and well-being of Americans, having certain drug manufacturing options is essential. This type of capability would protect the United States from international disruption and supply chain logistics issues. The same goes for the necessary PPE and medical devices. There is legislation pending in the United States Congress that aims to encourage the manufacture of drugs in the United States.
Strengthen “made in America” requirements
The US government has a long “buy America” policy, but it was loosely worded and weakly enforced, so this position has lost much of its relevance. President Biden signed an executive order that clarifies the definition and puts in place more stringent regulatory protections to ensure the policy is implemented. The order includes a mandate that products made in the United States must include materials with at least 55% domestic content. Companies can assemble products in the United States, but the components must come from within the country. Stricter “country of origin” requirements would strengthen the meaning of the “buy American” provisions.
Define the market to include friendly nations
When thinking about national drug manufacturing capabilities, it’s important to consider the global drug market and how US companies fit into the global landscape. It would obviously be costly to cease all overseas operations and rely only on US-based facilities. But it is important to think about the geographic combination that would provide the necessary security for American health products and medicines. It may take a new mix of friendly domestic and foreign sites to ensure products are available when the United States needs them.
Avoid guaranteed contracts
Protecting the production of essential drugs requires a manufacturing competition policy that is in fact pro-competitive. Guaranteeing contracts to one or two companies in a sector gives them enormous power and sometimes crowds out competitors. It is important to allocate federal resources so that more companies benefit and have a greater incentive to manufacture drugs for the United States.
Provide financial support
The federal government can provide assistance to domestic drug producers in a variety of ways, such as tax credits, loans, infrastructure investments, and direct support to production facilities. Any of these methods would improve the manufacturing climate in the United States and allow companies to relocate drug production and strengthen national supply chains.
Provide faster drug approval processes
The final recommendation is to speed up federal drug approval processes. Currently, U.S. Food and Drug Administration protocols require long lead times and considerable resources to navigate. Anything that speeds up the process, while protecting the patients, would help. Accelerating these processes would allow companies to get drugs to market faster and provide support during critical times. This would ultimately help companies financially and provide access to drugs to patients who would benefit from its use.