Manufacturing Pharmaceuticals in America
Do you remember the beginning of 2020?
For me, I had just started my new gig here with Optimation as the Director of Marketing. I was bright eyed, bushy tailed and ready to take on the world! Then, tragedy strikes, and our entire universe is flipped upside down. The words “global pandemic”, “coronavirus” and “COVID-19” fueled discussions and were plastered (still are) all over mainstream media. Work, personal hobbies, socialization, getting your necessities (food, water, shelter) even caring for animals and pets turned into a scary and eerie feat.
It is hard to look at all the turmoil, stress, arguments, negativity and shattered lives this virus has caused and think to yourself that there is an upside. It may even make you feel guilty to look for the positives in the wake of destruction. But there is an upside, a silver lining, and it is BIG.
A Silver Lining in 2020’s Grey Cloud
America’s eyes were opened, and manufacturing in the United States is making a comeback! If there is anything, I’ve learned the most through this experience, it is how important it is to be prepared and as self-sufficient as possible. I think America learned this too.
A closely connected, diverse, high-quality and resilient pharmaceutical supply chain based in the United States and in U.S. allied countries is the best means to ensure that U.S. patients and the U.S. health care system have access to a secure and consistent supply of critical pharmaceuticals. The coronavirus has shed light on the vulnerability that the U.S. has on its dependency on offshore supply of medicines in everyday life. Rosemary Gibson calls attention in her book, China Rx: Exposing the Risks of America’s Dependence on China for Medicine, that millions of Americans are taking prescription drugs made in China. Several decades ago, penicillin, vitamin C, and many other prescription and over-the-counter products were manufactured in the United States. But with the rise of globalization, antibiotics, antidepressants, birth control pills, blood pressure medicines, cancer drugs, among many others are made in China and sold in the United States. China’s biggest impact on the U.S. drug supply is making essential ingredients for thousands of medicines found in American homes and used in hospital intensive care units and operating rooms. American dependency on foreign products to ensure the health of the population is a scary thought.
According to a New York Times article published this year, Chinese pharmaceutical companies have supplied more than 90 percent of U.S. antibiotics, vitamin C, ibuprofen and hydrocortisone, as well as 70 percent of acetaminophen and 40 to 45 percent of heparin in recent years, according to Yanzhong Huang, a senior fellow for global health at the Council on Foreign Relations.
Not only would it be a good thing for the health of our country to have medicines and pharmaceuticals manufactured in the United States, but it would also foster economic growth. A new analysis from an organization, the Coalition for a Prosperous America (CPA), demonstrates that the economic benefits of rebuilding this domestic capability would be significant, including the creation of 804,000 high-paying manufacturing jobs. According to CPA, last year, the United States imported $128 billion worth of pharmaceuticals. That makes it the third largest category of imports, even ahead of cellphones. The U.S. trade deficit in pharmaceuticals was $74 billion.
Reshoring pharmaceutical manufacturing would increase American pharmaceutical manufacturing jobs by 62%. Federal data shows that, in 2018, there were 294,250 workers employed in pharmaceutical and medicine manufacturing, with a median income of $74,890. That is 47% higher than the median for all private-sector employees. A boost to this sector would provide thousands of additional high-paying jobs at manufacturing plants across the country.
Growing the economy and being independently responsible for our people’s health seems like a no brainer to me, but just to really hit the importance of onshoring our pharmaceuticals, consider this: Chinese and Indian manufacturing facilities are the most frequently cited by the FDA for quality control issues, and the novel coronavirus pandemic and the Trump administration’s ongoing trade war with China have injected geopolitical concerns into the country’s drug supply.
Who has a problem with onshoring you ask? Well, Big Pharma of course.
An article published by Fierce Pharma gets into the details of why Big Pharma is pushing back. With legislation piling up, the Pharmaceutical Research and Manufacturers of America (PhRMA), the industry’s biggest lobbying group, has pushed back against Congressional support for a supply chain shake-up. Their argument is not invalid, manufacturing stateside would increase costs and upset the balance of pharma’s global supply chain.
“While we support efforts to foster more manufacturing in the United States, moving all manufacturing here is impractical and likely not feasible,” a PhRMA spokesperson said. “Policymakers must take a long-term, more holistic look at global pharmaceutical manufacturing supply chains before jumping to rash proposals that may cause significant disruptions to the U.S. supply of medicines.”
So, to combat this argument, The Association for Accessible Medicines recently rolled out a blueprint (PDF) for improving the security of the U.S. pharma supply chain. It is about identifying a list of essential medicines that should be made in the U.S., creating a network of manufacturers and several financial incentives including HHS grants to support facility construction.
As Jeff Ferry, a chief economist at the Coalition for a Prosperous America (CPA), said in a recent article,
“Our priority today must be reshoring production of the most vital medications. Our medium-term priority must be to begin rebuilding U.S. manufacturing for national security, patient safety, and economic reasons. And the fundamental change we need is to replace “shareholder value” with a national economic strategy that makes broadly shared prosperity, strategic security, and economic growth our top priorities.”
These strategic initiatives and big bold steps are not out in the distant future. They are happening today, and we are in the midst of them.
Securing and ensuring America’s health and safety starts with rebuilding and expanding the manufacturing infrastructure that is the pharmaceutical and therapeutics industry here. For a long time, the United States led the world in the development of critical vaccines and medicines, raising the quality of life and standard of living for Americans and people all over the globe. As globalization pushed forward however, the drive to move many facets of the supply chain and indeed the production of the medicines and therapeutics themselves went offshore from the United States.
Many factors contributed to this including less expensive labor, tax benefits, distribution channels, etc. The thinking was that the supply chain could feed the final products in the markets in America and the rest of the developed world but the flaw in that has been exposed without the appropriate balance of domestic American supply capacity.
As those macro issues get worked out, “Operation Warp Speed” and industry-driven initiatives are putting capacity development into high gear. The need to not only create these vaccines and therapeutics, but to also safely package and deliver them is of utmost importance, and American companies are stepping up to do that work.
Both the traditional, experienced pharmaceutical sector as well as new entrants, those companies that have chemical, medical, and other competencies that are relevant to the challenge are also getting in the act. New machines are being designed and built. Existing systems are being re-purposed for this emergency application. Many hundreds of millions of doses of a wide variety of different types of vaccines and therapeutics will be required in 2021 alone. All of the constituent elements that go into producing those are being drawn from around the world, and as discussed here, more are being produced in America closer to the initial market we want to serve, and closer to the final production of the finished vaccines and medicines.
For years Optimation has been working alongside some of the nation’s best pharmaceutical firms, providing strategic support services for controlling quality and manufacturing. We have been delivering customized equipment to exacting specifications in order to provide our clients in the market with the most safe, effective, and readily available needed medicines. Our ability to deliver high-quality manufactured systems for production and testing has enabled many of the world’s foremost pharmaceutical firms to achieve their important goals and deliver life-saving products. Our engineers and skilled trades people have repeatedly stepped up to meet challenges of ultra-purity, rapid deployment, and fail-safe operation.
The Silver Lining
Which brings me back to 2020, what I have lived through, things we have learned and the changes taking place and the opportunities being created by the COVID-19. I’ve seen American innovation at work. Early in the pandemic companies found ways to convert existing manufacturing lines to make ventilators, facemasks and hand sanitizers. Legislators from both branches of government became advocates for funding to reshore pharmaceutical and medical device manufacturing. Operation Warp Speed was funded to accelerate the creation of and production of vaccines to prevent COVID. Government grants were offered to manufacturers to build production capability for testing slides for both COVID and the antibodies created by it. A new surge in American manufacturing happened almost overnight. American manufacturers rose to the needs and took on new challenges outside their traditional comfort zones. New needs were identified, and new products created. Beyond the direct medical and pharmaceutical manufacturing are better ventilation systems for offices, public buildings and airplanes. Changes are happening in food manufacturing, packaging and delivery. Meat processing is being upgraded and improved. Vending is becoming more popular for food delivery. The world is changing, and America is changing faster.
In case you have not found the lining yet, let me help you find some good news in this seemingly grey cloud of a year. We have the gift of clarity. We see the importance of self-sufficiency. We understand that manufacturing has a great opportunity ahead of us where we can deliver solutions that usher in a new era of self-sufficiency for American medicine.