Biden Plans Federal-Private Consortia To Steer Drug Supply Chain Plan

Inside Health Policy

June 9, 2021 10:37 pm

The White House has asked HHS to lead a consortium comprising nearly a dozen federal agencies, the private sector and nonprofit entities charged with crafting a strategy to secure the pharmaceutical supply chain by boosting U.S. production, developing new manufacturing technologies, and increasing the resilience of U.S. and allied pharmaceutical production. The White House will kick off the effort with a high-level summit, according to a supply chain report released by the White House this week.

The new consortium will start by reviewing FDA’s Essential Medicines list and picking 50 to 100 drugs that it deems critical to always have available for U.S. patients. The group will then determine the potential volume needed of the drugs, using the COVID-19 pandemic as a gauge. Next, HHS will use the Defense Production Act to come up with financial incentives that could ensure the onshore or nearshore production needed for the global supply chain.

In the mid-term, HHS will set up a group of pharmaceutical supply chain experts to develop a resilience framework using the consortium’s recommendations. The department will then map out the specific supply chains for drugs on the critical list and identify those drugs for which onshoring or nearshoring might be advisable, the report says.

The next step will be determining whether there is a need to increase production or stockpile active pharmaceutical ingredients for those drugs on the critical list, and, if so, the amounts needed for the stockpile, the benefits and risks of a virtual stockpile and the ability to use platform technologies to provide surge production during a crisis.

HHS also will explore stockpiling strategies to reduce API supply risk, and it will investigate whether new reimbursement models could boost supplies without unduly increasing U.S. costs.

The main focus of the new initiative will be sterile injectables that are put on the critical drugs list as well as chemotherapeutics that have been in short supply over the past five years. But HHS will also evaluate whether to include other sterile injectables that are identified as being at significant risk of shortage, yet are not part of the critical list, such as sterile pediatric oncology drugs.

The new consortia will be responsible for advising private sector companies that are either interested in building domestic capacity or have the expertise to help facilitate production. Other agencies expected to participate in the cross-agency group include the Environmental Protection Agency, Department of Commerce (including the National Institute of Standards and Technology), Department of Labor, Department of Defense, Federal Trade Commission, Department of Justice and Small Business Administration.

The group will coordinate input from the federal agencies involved, provide sector-based training for American workers, and address how to mitigate the risk from climate change and limit the environmental impacts of manufacturing on any neighboring communities to plants.

The Biden administration’s strategy for securing the U.S. pharmaceutical chain also includes steps to bolster FDA’s authorities and foster stronger cooperation among the United States and its allied partners.

Boosting U.S. production will require investing in innovative generic drug manufacturing processes and production technologies. HHS plans to build off the novel platform technology development that took place as part of the pandemic response, including on-demand manufacturing capabilities for certain drugs that were created with DOD. Medicines produced like this can be purchased at one-tenth of the costs listed on the current federal supply schedule, the report suggests.

The National Institute for Innovation in Manufacturing Biopharmaceuticals is expected to launch an industry-scale effort in June to develop fully integrated, small footprint platforms to improve upon the technological capabilities for biomanufacturing APIs. HHS will also create a task force dedicated to increasing capacity for the development, evaluation, and implementation of novel manufacturing tech by forming partnerships with domestic drug companies and universities.

Another pillar of the administration’s strategy for toughening up the drug supply chain is increasing emergency capacity so that, in the event of unforeseen public health crises, there’s still no shortage of essential medicines. The administration recommends creating a virtual stockpile of APIs and other materials necessary for the manufacturing of essential medicines or expanding upon the existing National Strategic Stockpile. — Gabrielle Wanneh (