The article by Nick Iacovella and Jon Toomey highlights the severe drug shortage crisis in the United States, attributing it to the offshoring of drug manufacturing, regulatory failures of the FDA, and foreign government subsidies. The U.S. heavily relies on foreign manufacturers, especially from China and India, for essential generic medicines, which has led to numerous challenges including regulatory noncompliance and quality issues. The article argues that these factors contribute to the increasing drug shortages in the U.S., impacting patients and the healthcare system.
The crisis, exacerbated by the COVID-19 pandemic, has its roots in legislative changes like the Hatch-Waxman Act and the rise of Group Purchasing Organizations (GPOs) and Pharmacy Benefit Managers (PBMs), which have driven manufacturing offshore to countries with lower standards. This shift has resulted in a lack of supply chain resilience and a growing concentration within the pharmaceutical industry.
The authors criticize the FDA for inadequate oversight of foreign drug manufacturers, noting the agency’s reliance on preannounced inspections and a lack of stringent enforcement compared to domestic inspections. They highlight cases where the FDA has allowed imports from facilities with significant violations due to drug shortages.
The article also delves into India’s substantial subsidy regime for its pharmaceutical industry, which includes a variety of export and domestic subsidies, contributing to the outsourcing of U.S. generic pharmaceutical production. It points out the risks posed by this dependency, including national security concerns and the exposure of Americans to substandard drugs.
To address these challenges, the authors suggest several policy solutions, including the PILLS Act proposed by Congresswoman Claudia Tenney, which aims to incentivize domestic production of generic medicines. They recommend that the U.S. government leverage its purchasing power, implement new trade remedies, and reform the FDA’s regulatory and oversight regime. The article concludes by emphasizing the need for bipartisan action to reshore pharmaceutical manufacturing and ensure a safe, affordable, and accessible supply of essential medicines and medical devices in the U.S