Mining pharma's reshoring rush

May 29, 2024
It’s time for the U.S. to sift through domestic drug manufacturing efforts

When the pandemic hit and Americans found themselves looking to China for critical medical supplies, the idea of reshoring — a concept that had drifted along the currents of the manufacturing sector for over a decade — embedded itself into pharma discourse with renewed luster.

Reshoring found some of its most fervent supporters inside the halls of Congress, with leaders touting the idea as a catch-all cure to pharma’s longstanding supply chain ills and putting forth a rush of legislation. The solution also had a champion in the White House, with President Trump, just months into the pandemic, issuing a controversial ‘Buy American’ executive order mandating that essential drugs and medical supplies purchased by the federal government be manufactured domestically.

The country’s reshoring fever has persisted into the Biden administration, with the president invoking the Defense Production Act, a Truman-era policy, to unlock government investment in the domestic manufacturing of essential medicines, countermeasures and critical inputs last November.

As Mark Twain once said, “During the gold rush it’s a good time to be in the pick and shovel business.” And for the handful of pharma stakeholders willing to get on board with the reshoring effort, the government — through the Department of Health and Human Services’ (HHS) Administration for Strategic Preparedness and Response (ASPR) — has offered lucrative incentives. ASPR’s Biomedical Advanced Research and Development Authority (BARDA) has awarded contracts totaling more than $2.1 billion to expand domestic production of pharma ingredients and related supplies for pandemic response and build future capacity. ASPR’s newly created Office of Industrial Base Management and Supply Chain (IBMSC) has invested over $17 billion across 87 contracts to expand the U.S. industrial base for key materials and products.

“There’s certainly a lot of activity in this space right now and a tremendous amount of money that’s being thrown at it. And you’re seeing bits and pieces of it take hold,” says Bikash Chatterjee, president and chief science officer at Pharmatech Associates, a USP company.

The government’s investments into generic drugs and APIs have created an air of excitement surrounding the westward migration of manufacturing. But health care economists, such as Marta Wosińska, who currently serves as a senior fellow at the Brookings Institution Center on Health Policy, are worried about what comes next.

“If I were a manufacturer and the government were to offer me a bunch of money to build a facility, I would be asking a lot of questions about whether that’s going to be enough for me to be competitive in the market after,” says Wosińska.

While many of the companies who received these contracts have managed to deliver on their initial promises, they are now faced with the daunting task of remaining self-sustaining as the dollars dry up.

Now comes arguably the most vital phase of U.S. domestic manufacturing efforts — figuring out where to get the most lasting bang for our reshoring bucks.

“There’s an opportunity for the U.S. government to be much more strategic about this. Think about which supply chains, which players, and how to think holistically about not only infrastructure but also follow-on,” says Wosińska. “If it’s not systematic, the government can very easily end up spending a bunch of money and accomplishing very little.”

With the pandemic finally in our rearview, the U.S. has what many industry insiders see as a golden opportunity to candidly assess pharma’s reshoring progress — and create a more formal plan for supply chain resilience.

In this two-part series, we assess pharma’s reshoring progress, including efforts to establish a reshoring list, the importance of ongoing government support and the role of advanced technologies:

Part 1: Mining the reshoring rush: Targeting government spending
In part one of our series, we discuss efforts to establish a comprehensive reshoring list

Part 2: Mining the reshoring rush: Sustaining efforts once infrastructure investments dry up
In part two of our series, we explore what it will take for domestic companies to be self-sustaining and the role of advanced technologies

About the Author

Karen P. Langhauser | Chief Content Director, Pharma Manufacturing

Karen currently serves as Pharma Manufacturing's chief content director.

Now having dedicated her entire career to b2b journalism, Karen got her start writing for Food Manufacturing magazine. She made the decision to trade food for drugs in 2013, when she joined Putman Media as the digital content manager for Pharma Manufacturing, later taking the helm on the brand in 2016.

As an award-winning journalist with 20+ years experience writing in the manufacturing space, Karen passionately believes that b2b content does not have to suck. As the content director, her ongoing mission has been to keep Pharma Manufacturing's editorial look, tone and content fresh and accessible.

Karen graduated with honors from Bucknell University, where she majored in English and played Division 1 softball for the Bison. Happily living in NJ's famed Asbury Park, Karen is a retired Garden State Rollergirl, known to the roller derby community as the 'Predator-in-Chief.'