Shifting drug production back to US could raise prices: 5 takeaways

While President Donald Trump is calling on drug companies to bring production back to the U.S., the shift may prove difficult for the pharmaceutical industry, reports The Wall Street Journal.

Here are five takeaways.

1. About 60 percent of finished medications sold in the U.S. are made in the country, according to the Food and Drug Administration. However, drugmakers have established a hefty manufacturing capacity in other countries since the 1980s to take advantage of tax and labor-cost benefits. As a result, many have closed domestic plats, according to the report.

2. The FDA also estimates that 80 percent of active drug ingredients are made outside of the U.S. Most antibiotics sold in the U.S. are made almost entirely from ingredients sourced from China and India, reports WSJ.

3. President Trump has not shared specific plans as to how he plans to bring drug manufacturing to the U.S. Efforts to do so could counteract the president's other main goal in the drug industry: to lower drug prices, reports WSJ.

4. "I think this is something the industry needs to pay attention to, in light of its potential impact on the cost of manufacturing," said John Taylor, a former FDA official and pharmaceutical executive who now serves as an advisor on regulatory matters at Greenleaf Health.

5. Reducing overseas drug manufacturing would "cause great disruption to the healthcare system in the U.S. and directly drive up costs," said Jeff Weisel, a director at Ernst & Young LLP's healthcare practice in Singapore.

More articles on supply chain:

The value of GPOs in healthcare supply chain: 6 findings
Viewpoint: Why a Silicon Valley mindset is wrong for the FDA
Mayo Clinic physician: A stripped down FDA would be 'chaotic'

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