April 22, 2021

Warren, Smith Reintroduce Bill to Boost U.S. Pharmaceutical Manufacturing Capacity and End Over-Reliance on Foreign Countries for Critical Drugs

Bill Text | One-Pager 

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) are reintroducing the Pharmaceutical Supply Chain Defense and Enhancement Act -- comprehensive legislation that takes bold steps to reinvigorate the United States' manufacturing capacity and end the nation's reliance on foreign countries for critical drugs used by millions of Americans. 

"To defeat the current COVID-19 crisis and better equip the United States against future pandemics, we must boost our country's manufacturing capacity," said Senator Warren. "Our bill will end our overreliance on foreign countries and give us the tools we need to produce the critical drugs that millions of Americans depend on here at home."

"We need to be able to produce the medicine that Americans need here on U.S. soil. This is an issue of public health and national security," said Senator Smith. "I'm glad to work with Senator Warren to strengthen our country's capacity to manufacture critical drugs. This will help lessen our over-reliance on other countries and make sure Americans can get the drugs they need."

The United States imports nearly 80% of the active pharmaceutical ingredients (APIs), the requisite component of drugs, used in generic drugs that millions of Americans rely on. This overreliance is an alarming national security and public health risk. Foreign manufacturers could restrict or completely cut off the supply of pharmaceutical products during a period of heightened geopolitical tensions or after a natural disaster. Bad actors could tamper with drugs or APIs, rendering them ineffective or even weaponize them, and a lack of information available to the federal government has prevented it from adequately addressing these problems. 

We must take steps to counter this overreliance and ensure that reliable and high-quality drugs can be produced at home. The Pharmaceutical Supply Chain Defense and Enhancement Act:

  • Requires the FDA Commissioner and the Secretary of Defense to develop a confidential list of "critical drugs" essential for public health and national security. The list shall include the name of the drug, as well as all APIs and starting materials necessary to develop it and will be updated every two years to reflect the nation's shifting needs.
  • Provides $1 billion a year for 5 years to the Biomedical Advanced Research and Development Authority (BARDA), to dramatically upgrade our national capacity to manufacture "critical drugs." Funding will be used to contract with U.S. nonprofits and companies to help them invest in the facilities, manufacturing techniques, and drug development processes needed to produce the drugs, APIs, and starting materials included on the "critical drugs" list in the United States. These companies will use advanced manufacturing techniques that will allow for higher quality drugs to be produced more efficiently.
  • Creates a market for domestically-produced pharmaceuticals by requiring DoD, VA, HHS, and BOP to purchase American-made drugs and providing funding to subsidize the purchase of these drugs. These agencies will be given an additional $1 billion over their current procurement budgets to purchase drugs that utilize ingredients produced exclusively in the United States.
  • Boosts supply chain transparency by requiring drug makers to annually report to the FDA information about the source of APIs and starting materials used to make drugs consumed in the United States; requiring drug makers to report to any federal agency that it supplies drugs with information on the foreign manufacturers that produce those drugs and components; and requiring the FDA to issue both public and classified reports to Congress on the strength of the U.S. supply chain. This section provides $20 million to the FDA to update its technological capabilities and establish an API database to track U.S. reliance on foreign manufacturers.
  • Require the FTC and the Treasury Department to study the role of foreign investment in the U.S. pharmaceutical industry within one year of the Act's passage.

Today, Senator Warren and Senator Marco Rubio (R-Fla.) reintroduced the U.S. Pharmaceutical Supply Chain Review Act to direct the Federal Trade Commission (FTC) and the Secretary of the Treasury, acting through the Committee on Foreign Investment in the United States (CFIUS), to conduct a study on the United States' overreliance on foreign countries and the impact of foreign direct investment on the U.S. pharmaceutical industry.

"On behalf of CPA and our members - including our domestic pharmaceutical manufacturers - we thank Senators Warren, Rubio, and Smith for introducing these two critical pieces of legislation," said Michael Stumo, CEO of the Coalition for a Prosperous America. "America's dependence on foreign medical supply chains poses a severe risk to U.S. economic and national security - especially in times of a medical crisis. We urge Congress and the Biden administration to support these two bills as they continue to take steps to reshore critical industries and supply chains."

"The COVID-19 pandemic revealed serious vulnerabilities in U.S. supply chains and made clear that we must combat America's dependence on foreign nations for essential generic drugs, antibiotics, vaccines, PPE, and other critical health care products," said Rosemary Gibson, author of China Rx and Chairwoman of the Coalition for a Prosperous America Healthcare Committee. "These two pieces of legislation are the exact kinds of policies we need from Washington to address this serious vulnerability and reshore essential medicine production."

"The Covid-19 pandemic exposed our nation's dangerous overreliance on foreign-made medical supplies, yet more than a year later, our pharmaceutical supply chain remains vulnerable, posing a grave national security threat," said United Steelworkers International President Tom Conway. "USW members at Viatris (formerly Mylan) in Morgantown, W. Va., who manufacture generic pharmaceuticals, are among the thousands of Americans who remain committed to supplying our nation's needs but whose jobs are nevertheless being offshored to places like India. Both the Pharmaceutical Supply Chain Defense and Enhancement Act and the U.S. Pharmaceutical Supply Chain Review Act are crucial for protecting our access to critical goods, preserving manufacturing jobs and keeping America healthy."

President Biden has publicly committed to investing in domestic drug manufacturing by leveraging federal buying power and making critical products-including drugs-in America. President Biden's infrastructure plan announced in March 2021 calls for investing $30 billion over four years to "protect Americans from future pandemics," including through efforts to "onshore active pharmaceutical ingredients." 

Senator Warren has been working to end the U.S. overreliance on foreign countries for critical drugs and boosting the country's manufacturing capacity before and during the COVID-19 crisis. In 2019, she led a bipartisan letter to the Department of Defense highlighting the national security and public health risks of this overreliance. Last March, Senators Warren and Rubio introduced bipartisan legislation to combat America's supply chain risk and dependence on China for pharmaceuticals.  In 2018, Senator Warren and Representative Schakowsky introduced the Affordable Drug Manufacturing Act to radically reduce drug prices through public manufacturing of prescription drugs and re-introduced it in 2019. Last year, they introduced the COVID-19 Emergency Manufacturing Act to publicly manufacture personal protective equipment, prescription drugs, and other medical supplies necessary to combat the COVID-19 pandemic.