On May 5, President Trump signed an executive order aimed at boosting domestic production of prescription drugs and active ingredients.
Six details:
1. In the U.S., bringing new drug manufacturing plants online can take years, “which is unacceptable from a national security standpoint,” the White House said in a fact sheet.The order directs the FDA to reduce timelines for approving domestic manufacturing plants by cutting duplicative requirements, streamline reviews and support manufacturers through the approval process.
Under the order, the Environmental Protection Agency is asked to accelerate the construction of facilities intended for prescription drug manufacturing, active ingredients and other raw materials.
“We don’t want to be buying our pharmaceuticals from other countries because if we’re in a war, we’re in a problem, and we want to be able to make our own,” President Trump said in a statement. “As we invest in the future, we will permanently bring our medical supply chains back home. We will produce our medical supplies, pharmaceuticals and treatments right here in the United States.”
2. To incentivize domestic manufacturing, the order also directs the FDA to raise fees for inspections at foreign manufacturing plants, and asks the agency to strengthen enforcement of active pharmaceutical ingredient source reporting by foreign drug manufacturers.
3. FDA commissioner Marty Makary, MD, told reporters that the order will also enable the agency to increase inspections of new manufacturing sites, as well as conduct surprise visits at foreign manufacturing plants — a shift from the current policy where foreign inspections are scheduled in advance, CNBC reported.
“We had this crazy system in the United States where American pharma manufacturers … are put through the ringer with inspections, and the foreign sites get a lot easier with scheduled visits, while we have surprise visits,” Dr. Makary said.
4. The new order comes as the drug industry braces for pharmaceutical tariffs, which President Trump has said will be announced in the coming weeks. It’s unclear what sector-specific tariffs might look like for prescription drugs, though the president has previously touted plans for a 25% tariff on drug imports.
Pharmaceutical imports are currently subject to a universal 10% tariff.
5. While many pharmaceutical and supply chain experts support efforts to boost domestic manufacturing, they underscore the complexity of the industry. Bringing more drug manufacturing to the U.S. can lower the risk of disruptions, but it may also raise production costs and thus drug prices.
6. In a statement, Premier — one of the nation’s largest group purchasing organizations for healthcare supplies — welcomed the order, though cautioned that it is just one of many policy shifts needed to improve the nation’s supply chain resilience for pharmaceuticals.
“Premier has consistently called for a comprehensive approach — including accelerating FDA approvals for U.S.-based facilities that manufacture critical drugs and medical supplies,” said Soumi Saha, vice president of government affairs at Premier. “The protracted timeline for bringing a new domestic facility online and retooling an existing one is incompatible with the urgent public health challenges we face. Creating an expedited pathway for domestically manufactured products is a critical step toward building a more resilient, responsive and secure healthcare supply chain.”
“But this can’t be a one-policy solution,” Ms. Saha said, adding that a multi-pronged strategy that includes tax incentives, fair reimbursement and trade partnerships for near-shoring is needed for the nation to build and sustain greater drug manufacturing capacity.
