Trump plans order seeking to return drug production to US

President Donald Trump plans to sign an executive order Thursday that would encourage the production of certain drugs and medical supplies in the U.S., following shortages during the Covid-19 pandemic.

The order urges purchasers to buy American-made products and loosens federal drug-safety and environmental regulations that the administration says disadvantage domestic producers, among other measures.

The drugs and devices covered by the order are expected to include medicines used to respond to a public-health emergency or biohazard attack, among others. White House trade adviser Peter Navarro said on a call with reporters that the Food and Drug Administration will come up with the list of essential medicines covered by the order, but he didn’t say by when.

“We’re dangerously overdependent on foreign nations for our essential medicines, for medical supplies like masks, gloves, goggles and the like, and medical equipment like ventilators,” Navarro said on the call. “Across the world we have sweatshop labor, we have pollution havens, we have tax havens which have pulled our manufacturing offshore particularly for pharmaceuticals.”

Ninety percent of drugs taken by Americans are generics, which don’t often have high profit margins. Building capacity to produce pharmaceuticals in the U.S. is expensive, and it was unclear whether the incentives outlined in the order would be strong enough to overcome the significant economic obstacles likely to be faced by new domestic manufacturers.

Health-care providers have struggled to get the drugs or equipment they need during the pandemic because so many are made overseas. Researchers and lawmakers have decried that reliance on foreign suppliers for years, but public outcry over drug and equipment shortages during the Covid-19 pandemic has increased attention on the issue.

The Department of Health and Human Services, Defense Department, and Department of Veterans’ Affairs will be required to buy the U.S.-made drugs, Navarro said, although he didn’t specify what that requirement would cover. The exceptions to purchase domestic drugs would be if it 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, Navarro said.

Base of Demand

The administration recently awarded a $765 million contract to Eastman Kodak Co. to make ingredients used in key generic medicines and a $354 million contract to generic drugmaker Phlow Corp. to make Covid-19 drugs and build new U.S.-based plants for so-called essential medicines and pharmaceutical ingredients.

Navarro said the order “establishes a base level of demand to attract a level of investment sufficient to provide for the needs we have for these things in times of trouble.”

Trump will travel to a Whirlpool Corp. plant in Ohio Thursday afternoon to sign the order.

The FDA has said about 80% of the key building blocks for medicine, called active pharmaceutical ingredients, come from outside the U.S. A large portion are made in China and India, countries where the FDA has discovered product-quality issues stemming from poor manufacturing practices.

Millions of blood-pressure drugs with ingredients made in China and India were recalled starting two years ago after it was discovered they contained chemicals that can cause cancer.

Inspection Shift

The Pentagon has also raised concern that relying on China for pharmaceutical ingredients is a national security risk. In addition, the pandemic has revealed how disruption in other countries can leave Americans vulnerable after India temporarily halted the export of some products that could be needed to treat Covid-19 patients.

The FDA can do unannounced inspections of drug plants in the U.S., but not in China or India, Navarro said. “That’s not going to happen anymore,” he said.

The FDA had started doing unannounced inspections in India several years ago, but abruptly stopped without explanation in 2015. During that effort, the agency increased its most serious citations to pharmaceutical companies in the country by 60%, according to Iowa Republican Senator Charles Grassley, who investigated the program’s halt.

The order will have the FDA and Environmental Protection Agency cut back on regulations so drug approvals can be sped up, Navarro said, but they won’t be “cutting any corners, we just want a more rational and streamlined regulatory process.”