The U.S. health care system benefits from a globally diverse generic pharmaceutical supply chain. Despite concerns voiced by policymakers and pundits early in the pandemic, the generic pharmaceuticals supply chain has proven highly resilient. But this success does not decrease the value of increasing the number of essential medicines produced in the United States or the need for the U.S. government to incentivize the investments required to grow the generic pharmaceuticals manufacturing base.
Eighteen months after AAM published our initial slate of incentives necessary to increase production of essential medicines in the United States, we are proud to release the second edition of our Blueprint to Enhance the Security of the U.S. Pharmaceutical Supply Chain. Like the first, this edition highlights the incentives necessary for increased U.S. production of the medicines the U.S. Food and Drug Administration (FDA) considers most critical to ensuring the health of America’s patients during natural disasters and global pandemics.
Specifically, the blueprint recommends:
- Updating at regular intervals — and seeking stakeholder feedback on — the FDA’s Essential Medicines List (EML);
- Expanding the Strategic National Stockpile (SNS) to include all medicines that appear on the EML;
- Providing grants to refurbish, expand or establish U.S. production facilities for medicines on the EML;
- Utilizing long-term fixed price and volume contracts to create predictable markets for U.S.-made essential medicines sold to the Veterans Administration, the Department of Defense and the Department of Health and Human Services (for medicines included on the SNS);
- Leveraging the Medicare and Medicaid programs to incentivize domestic production of essential medicines;
- Promoting reforms at the FDA to encourage more efficient reviews, inspections and approvals of U.S.-based manufacturing facilities for essential medicines; and
- Negotiating with U.S. allies the International Pharmaceutical Supply Chain Agreement.
Taken together, AAM and our member companies believe these incentives will encourage more production of U.S. finished essential medicines and their related active pharmaceutical ingredients. The resulting expanded manufacturing base, combined with the strong and dynamic globally diverse supply chain, will further strengthen the resiliency of the U.S. supply chain. This strength will build on the successes to date and help ensure that no matter what pandemic, natural disaster or global political upheaval emerges, U.S. patients will continue to have access to the medicines they need, when they need them.
By Jonathan Kimball, AAM Vice President, Trade and International Affairs
Published on November 1, 2021