The US pharma industry is facing a crisis as the demand for essential medicines and medical devices outstrips the supply. The pandemic has only exacerbated a previously existing problem: US dependence on foreign manufacturers of drug ingredients and finished products that has resulted in shortages of critical medicines.
As Per US Trade Data the root cause of this problem is the lack of domestic capacity to produce the active pharmaceutical ingredients (APIs), the primary functional components of the drugs we take. These ingredients include everything from the active substances in over-the-counter pain medications to life-saving IV solutions. Without APIs, pharmaceutical manufacturing grinds to a halt and shortages quickly follow.
The US manufacturing base to make these essential medicine ingredients has drastically eroded over the last several decades, and most of the supply now comes from abroad. According to the US Food and Drug Administration (FDA), 72% of API manufacturing facilities are located outside the US, with 13% in China and 18% in India. These countries have been hit hard by the pandemic, disrupting their production and export capabilities.
The FDA currently lists shortages of 115 basic drugs, and the American Medical Association (AMA) considers drug shortages to be an urgent public health crisis. These shortages have included medicines to control blood pressure, place patients on ventilators, and manage pain, as well as key antibiotics and normal saline. The FDA is working closely with manufacturers to monitor the supply chain and mitigate the impact of shortages, but it has limited authority and resources to do so.
According to Global Trade data in addition to drug shortages, the US pharma industry is also struggling with shortages of medical devices and equipment, such as certain epidural kits, syringes, and IV/A-line catheters. These are essential for administering drugs and fluids to patients, especially in critical care settings. The FDA maintains a list of medical devices in shortage, but manufacturers have no legal obligation to publicly disclose most incoming or ongoing shortages.
The Export Import Data indicates shortage of medical devices and equipment is partly due to increased demand during the pandemic, but also due to global supply chain disruptions and trade barriers. For example, China is a major supplier of medical devices and components to the US, but it has imposed export restrictions and tariffs on some products due to trade tensions with the US. Moreover, some medical devices require specialized materials or components that are sourced from only a few countries or suppliers, creating bottlenecks and vulnerabilities in the supply chain.
The US pharma industry needs to reimagine its supply chain and secure a fully domestic capability to produce the most used and vital medicines and medical devices. This would reduce its dependence on foreign sources, increase its resilience to disruptions, and ensure its ability to meet the health care needs of Americans. This would require significant investments in infrastructure, technology, innovation, workforce development, and regulatory reforms.
The US pharma industry is not only vital for the health and well-being of Americans but also for the economy and national security. It contributes billions of dollars to GDP, supports millions of jobs, and provides a strategic advantage in global affairs. It cannot afford to be in chaos due to ongoing drug and medical equipment shortages. It needs to act now to restore its supply chain and regain its leadership position in the world.
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