As we continue to feel the economic and social pressures of the COVID-19 crisis, the United State’s reliance on international imports has been on full display. While many industries felt the impact of the global shutdown months ago, the pharmaceutical industry stands to continue to take a hit long after much of the world begins to ease restrictions and we as a society adjust to our new normal. With Americans entering into months of quarantine in the hopes of “flattening the curve” and keeping our healthcare system stable, we stand to question how exactly we ended up in a situation in which drug and healthcare equipment were not plentiful enough to serve all citizens.

The Problem
According to a CNBC article published in late March, approximately 40-50% of U.S. generic drugs are supplied by Indian pharmaceutical companies with about 70% of the Active Pharmaceutical Ingredients in these drugs coming from China. With China being at the epicenter of the coronavirus pandemic, much of the distribution of these APIs was halted resulting in a shortage of finished generic drugs in India. In response, India shut down its exportation of certain drugs in an attempt to prevent a domestic shortage. This put the United States in an incredibly compromised position as we looked to face a nationwide outbreak unlike any we had seen to date without access to the generic drug supply to which we have grown accustomed. With only 28% of the factories that make active ingredients located on U.S. soil according to National Public Radio, the United States entered into a costly battle with COVID-19; incredibly ill-prepared and in no position to take over the large scale manufacturing efforts we have traditionally outsourced to India and China.

Learning from our mistakes
After narrowly avoiding what could have been the collapse of our healthcare supply chain as a whole, the government began actively taking steps toward healing the crippled American Pharmaceutical supply chain in March. Congress appropriated $3.5 billion for the Biomedical Advanced Research and Development Authority as part of legislation to respond to COVID-19. While initially founded in 2006 to bolster the United State’s ability to respond to acts of bioterrorism, BARDA awards grants to companies that work to research and develop experimental products that could one day be added to the National Strategic Stockpile. After identifying the underfunding of BARDA as one of the possible reasons COVID-19 hit the country so hard, Senator Chris Coons of Delaware was not shy about expressing his discontent with the funding of the program in a comment made to Nation Public Radio in which he states “we should have been investing in things like the national stockpile, innovation in vaccines and in therapeutics and in ensuring our supply chain before there was a crisis.”

As the Trump Administration looks to begin down the path toward independent manufacturing of generic drugs, they have recently taken a number of steps toward returning manufacturing to American soil. According to the Washington Post, the administration recently awarded a $354 million contract under BARDA to Virginia start-up “Phlow” to aid in their production of generic drugs. This decision is being called by some a potential landmark in the efforts to return pharmaceutical manufacturing from overseas, however others caution that many of the original motives, such as cost and environmental regulation, which caused the manufacturing to shift in the first place still remain prevalent. Phlow plans to utilize continuous flow manufacturing to manufacture the drugs, a process which according to ACS Publications will result in higher yields, less waste, less environmental impact and more affordable medicines.

What’s next?
It is no secret that COVID-19 has served as an eye opener in more ways than one. While encouraging legislation is being passed, experts caution that this is no small task given our current level of dependence on both China and India. As we can see, the United States clearly struggles to be an independent entity within the pharmaceutical industry due in part to the economic demands of manufacturing drugs on U.S. soil and truly only time will tell if the amount of government economic support currently necessary to keep U.S. drug manufacturing prices competitive is sustainable.

The PharmaOut team remains committed to doing our part to fight COVID-19 and help keep our families safe. Our team of expert recruiters and consultants have years of experience to assist our clients in successfully continuing their business with our staffing, consulting, HR and investigator meeting services. Please contact us if you would like to discuss how PharmaOut can be your strategic partner.

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