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Trump Biden US Elections

Here is a topic that most would not have predicted as an early theme for the US Presidential campaigns: a call for the US government to create a list of “critical drugs” to target for special incentives and supply protections. 

The idea of a “critical drugs” list isn’t new. It has been proposed in legislation and in comments to the US Food & Drug Administration as a potential tool to manage shortages. Indeed, FDA itself highlighted the idea as a subject for consideration when it launched a new task force to address chronic drug shortages in 2018. (Also see "The Economics Of Drug Shortages: US FDA Seeks Broad Input" - Pink Sheet, 20 Sep, 2018.)

The agency’s 2019 report to Congress on potential solutions, however, did not feature the concept, instead emphasizing ideas like quality ratings to help signal reliability in supply to purchasers. The idea of a specific list of critical products was relegated to an appendix as one of several “stakeholder proposals to FDA” that the agency is continuing to explore – along with a discussion of the many challenges of creating a list that would be meaningful amid an ever fluctuating global supply chain. (Also see "Real-Time Manufacturing Volume Reporting Could Help Prevent Drug Shortages, Woodcock Tells Congress" - Pink Sheet, 31 Oct, 2019.)

Now, however, the Joe Biden presidential campaign is endorsing the creation of a national “Critical Drugs List” as part of an overarching plan to address supply chains and encourage US-based manufacturing of prescription drugs.

The presumptive Democratic nominee released a five-page plan “to rebuild US supply chains and ensure the US does not face future shortages of medical equipment” on 7 July. 

Among other things, the plan “will require the FDA Commissioner, the Centers for Disease Control, and the Department of Defense to identify critical drugs and medical products and create a market for American manufacturing by directing federal agencies to purchase versions of these drugs that are made in the U.S. and that use U.S.-made source ingredients.”

The specific details of the Biden proposal on supply chain security are less significant than the fact that it exists at all. Global pharmaceutical logistics are not typically the subject of Presidential campaign literature – but the topic has become a high priority focus for legislators amid the COVID-19 pandemic.

That in part reflects the interest in global supply chains building before the COVID outbreak: the issue brings together those concerned about chronic drug shortages, international product quality, and US manufacturing competitiveness. The crisis of the pandemic has only accentuated those concerns. (Also see "Drug Shortage Legislation Gains Support As Coronavirus Threatens US Supplies" - Pink Sheet, 8 Mar, 2020.)

Double-Edged Sword For Legislation This Year

Biden’s embrace of the issue is a double-edged sword for the prospects of near-term changes. While it puts the national Democratic campaign squarely behind making supply chain security and US manufacturing capacity investments, it may work against immediate legislative compromises in the upcoming push for a final pre-election COVID response bill.

Most of the themes of the Biden plan are previewed in a bill introduced by Massachusetts Democratic Sen. Elizabeth Warren and Minnesota Democrat Tina Smith on 2 July. The Pharmaceutical Supply Chain Defense & Enhancement Act is thus a marker of where a Biden-led legislative push might begin in 2021 – with Warren likely to be a central actor either as part of the new Democratic administration or a key point person in the Senate.

The bill starts with a directive for creation of a “confidential” list of essential medicines to be crafted by FDA and DoD and shared with Congressional oversight committees. That list would then guide a series of purchasing and investment decisions by other government agencies intended to encourage US production.

Of note, the new Warren bill backs off of from her past support for a dedicated government manufacturing facility for critical medicines. (Also see "The Quality Lowdown: Warning Letters, Nitrosamine Recalls And Sen. Warren's Generics Manufacturing Plan" - Pink Sheet, 23 Jan, 2020.)

The new bill (like Biden’s plan) instead focuses on supporting manufacturing capacity development through grants (administered via the Department of Health & Human Services Biomedical Advanced R&D Authority) and by “creating a market” for domestically-products drugs.

“Biden will work to ensure that the U.S. leverages the fact that it is the largest purchasers of health care –between Medicare, Medicaid, the Department of Veterans Affairs, and other health programs as well as Federal procurement more generally – to encourage pharmaceutical companies to make key drugs, drug inputs, and medical devices in the United States while ensuring fair and transparent pricing,” the campaign summary says.

Other components of Biden’s plan include: 

  • Investing in federal stockpiles

  • Enhanced risk management by suppliers of critical drugs to avoid disruptions

  • Incentives to promote “surge manufacturing capacity”

  • Incentives for investments in workforce and facility development

Biden would also “eliminate Trump Administration tax incentives for offshoring and pursue other tax code changes that will encourage pharmaceutical production in the U.S.” (The Warren/Smith bill does not incorporate any tax proposals.)

That begins to point to the reasons why Biden’s support for reforms may work against immediate action: the campaign clearly sees a chance to turn the record of pre-existing interest in bolstering US manufacturing into a line of attack against Trump for failure to prepare for the pandemic. 

“The COVID-19 pandemic has exposed how President Trump has left America’s supply chains for critical products more vulnerable to global disruptions, creating a heightened risk that the U.S. ends up at the back of the line when there are worldwide shortages, or that our competitors cut us off from needed products and inputs,” Biden’s plan declares. “Trump tweets about ‘America First’ but his policies put outsourcing corporations first. For American workers, Trump’s policies have led to more offshoring, a U.S. manufacturing recession, and vulnerable U.S. supply chains.”

To the degree that global supply chain security morphs from a bipartisan point of consensus into a dividing line over Trump’s pandemic performance, it will likely become another issue that will have to wait until after election day for further action. Nevertheless, it is a remarkable sign of the times that it might be part of the national political dialogue at all.

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