The impact of the COVID-19 pandemic has US pharma companies, medical professionals, retailers, government leaders and other stakeholders concerned about potential interruptions to crucial drugs and ingredients. The pandemic (and other events like global conflict, weather catastrophes and other occurrences) threaten to slow or even stop the flow of much-needed drugs to patients that rely on them.
Outsourcing-Pharma recently discussed the state of the pharma supply chain with Kurt Orlofski, CEO of Pharmaceutical Associates Inc. (PAI), a manufacturer of high-quality liquid medicines and unit-dose packaging. Orlofski outlined his views on challenges inherent in relying on China and India for ingredients and drug products, and why it might be time to bring drug manufacturing back to the country.
State of the supply
“A significant proportion of the starting materials that go into the active pharmaceutical ingredients (APIs), as well as other excipients used to make finished drug product, are produced ex-US,” Orlofski said, pointing out that:
- More than 50% of the generic finished drug product distributed in the US is manufactured outside the country
- More than 70% of the APIs used in US finished drug product are produced outside the country (approximately 30% from China and India, and less than 30% in the US)
- In recent years, there has been significant consolidation of the US drug distribution system.
“The points above bring risk to the US supply chain, especially in a time of a global pandemic,” he said.
Legislative action
In May, US Sen. Tom Cotton (R-Arkansas) wrote and submitted a bill geared toward shifting drug manufacturing back to the country’s shores. The Protecting Our Pharmaceutical Supply Chain from China Act of 2020 is geared toward limiting pharma ingredients from non-US and creating incentive for stepped-up production of drugs and ingredients in the US.
Specifically, the Cotton-authored bill would:
- Track APIs through an FDA registry
- Block pharmaceutical purchases from China, or products with APIs created in China
- Create transparency in the supply chain by instituting a country of origin label of all imported drugs
- Provide economic incentives for US-based manufacturing of drugs and medical equipment.
“PAI is not close enough to the inner negotiations to speculate on whether it will pass and with what changes,” Orlofski remarked. “That said, the provisions for closer tracking of foreign supplied API and starting materials would help; with the supply chain so global and so long, making more essential product in the US could only help in future shortage sceanarios.”
The bill is currently under review with the Senate Committee on Finance.
Supply threats
Orlofski pointed out that in addition to the current pandemic, the supply is under perpetual threat from a number of other corners, such as natural events, civil unrest, regime changes, currency fluctuations and regulatory changes.
“COVID-19 showed the risk, perhaps not as bad as it could have been,” he commented. “Foreign manufacturers could stop supply to US at any time; this could be because the local need demands it.”
Recently the US administration threw a significant show of support behind increasing domestic drug manufacturing. Kodak’s new Kodak Pharmaceuticals arm landed a $765m loan, coming out of a COVID-19 response collaboration between the Department of Defense and International Development Finance Corp., to boost production of APIs.
