Steps to Address Drug and Device Shortages

Two policy executives with the Coalition for a Prosperous America say there are steps FDA, Congress, and other federal agencies could take to reduce drug shortages and the threat of medical device shortages. In a deeply-researched article in American Affairs, Nick Iacovella and Jon Toomey lay much of the responsibility for drug shortages on FDA policies that they say encourage off-shoring of generic drugs and active pharmaceutical ingredients and give foreign manufacturers inspection breaks that are not given to domestic companies.

They suggest that while there is no silver bullet to resolve shortages and the threat of shortages, “there are multiple policy solutions that, if implemented together, would significantly address the drug shortage crisis, prevent a shortage crisis in the medical device industry, and reduce America’s dependence on foreign supply chains and manufacturers.”

The first thing they call for is Congressional action to rebuild domestic production of essential medicines and reform FDA to ensure that it is properly overseeing foreign drug manufacturers that repeatedly violate agency safety regulations.

They particularly like the PILLS (Producing Incentives for Long-term Production of Lifesaving Supply of Medicines) Act introduced by Rep. Claudia Tenney (R-NY). They say the bill “would incentivize the strategic reshoring of U.S. production of generic medicines with a domestic production-based tax credit, domestic content bonus credit, and an investment tax credit.”

Iacovella and Toomey also say that to address the “rampant violations and regulatory failures” of foreign drug manufacturers, FDA must conduct thorough, in-person inspections of drug factories in China and India. They say the agency also must test drugs being supplied to U.S. patients, and fully insist on safe manufacturing facilities as a condition for selling in the U.S. market. They recommend that the Biden administration implement these reforms:

• use all authority to identify U.S. companies that can manufacture essential generics and work to get them approved and manufacturing at scale;
• increase in-person foreign inspections without advance notice to create parity with the standard applied to U.S. facilities;
• coordinate with HHS, the Department of Defense, and the White House to invoke the Defense Production Act to finance and build new production facilities and procure domestically made essential generics;
• amend internal procedures across agencies to prioritize increasing U.S. manufacturing across all essential medicines and dramatically reduce reliance on foreign sources; and
• review and change FDA leadership and personnel who are failing to fix the shortages, refusing to enable foreign inspection and testing, and unwilling to prohibit foreign manufacturers that have a history of repeated violations from selling medicines in the U.S.

“The drug shortage crisis facing our nation is a result of decades of offshoring of pharmaceutical production and a dereliction of duty by FDA to ensure our nation has a safe, affordable, and readily accessible supply of generic and other essential medicines,” the authors conclude. “Solving this crisis will require bipartisan action to reshore and boost domestic pharmaceutical manufacturing for generic medicines and critical medical devices like syringes and needles. Congress and the Biden administration must respond with swift action. That starts with passing legislation to incentivize the manufacturing of every stage of generic drug production in the United States and reforming FDA’s regulatory and oversight regime to hold foreign drug manufacturers accountable for repeated violations. Our nation once led the world in pharmaceutical manufacturing, and with the right policies, incentives, and regulatory reforms, the United States can once again be a leader in this critical industry.”