Congress hears from stakeholders about domestic pharma manufacturing challenges
Advanced manufacturing technologies are needed to rebuild America’s domestic production of active pharmaceutical ingredients (APIs) and key starting materials (KSMs), Ronald Piervincenzi, CEO of U.S. Pharmacopeia (USP), testified on June 11 before the House Energy and Commerce Health Subcommittee.
Piervincenzi, who heads the independent scientific organization, made the case that alternate manufacturing processes will better enable domestic production of pharmaceuticals and pharmaceutical ingredients.
“Enabling economically viable domestic production of prioritized APIs and KSMs is an important element of a comprehensive effort to enhance medicine supply chain resiliency,” Piervincenzi said in testimony before the subcommittee. “Emerging technologies offer promising avenues for reducing our dependence on overseas supply chains. Incentivizing acceleration of innovative approaches like continuous manufacturing and flow chemistry are key to modernizing, localizing, and stabilizing production.”
Advanced manufacturing technologies (AMTs) are critical to lowering costs for U.S. facilities to produce higher quality medicines, according to Piervincenzi, who warned that where American manufacturers lag furthest behind other countries is in APIs and “even more so” in KSMs.
“In those spaces, [AMTs] are probably the only solution that would be able to domestically increase production,” Piervincenzi said. “Where it’s happening is with innovative medicines that have higher margins and able to make the capital investments. Where it’s not happening is for generic drugs, where we see the shortages.”
Generic drugs, which make up 90% of prescription volume in this country, come primarily from India — while 43% of branded pharmaceutical API comes from the European Union, according to a recent analysis by USP, which found that only 12% of total API volume is made in the U.S. While China contributes 8% of the total volume of API, the report indicated that USP has discovered “case-by-case evidence of significant dependence on China” for KSMs, the building blocks of APIs.
Earlier this month, USP announced the opening of its Advanced Technologies Laboratory in Rockville, Maryland to help develop, pilot, and scale innovations in pharmaceutical manufacturing. The goal of USP’s lab is to help manufacturers overcome barriers in the adoption of AMTs “by developing new approaches and processes for flow chemistry and additive manufacturing coupled with advanced analytical techniques such as process analytical technologies (PAT).”
Among other initiatives, the lab will support the development of alternative and novel synthetic methods to produce APIs and KSMs, as well as assist industry and regulators to accelerate the adoption of new technologies that help to mitigate supply chain risks.
Incentives, investment needed
John Murphy III, CEO of the Association for Accessible Medicines (AAM), told the House subcommittee that generic drug manufacturers have been driven to offshore API and other manufacturing as it is a “highly competitive, low margin industry in the U.S.” Over the last five years, the total dollar value of all generics sold in this country — including the availability of new medicines — has dropped by $6.5 billion, according to Murphy.
“We have no comprehensive national strategy for real incentives for production,” said Murphy, who called for “bold industrial policy” when it comes domestic manufacturing of generic drugs, like the CHIPS Act — signed into law by President Biden in 2022 — which provided billions of dollars in subsidies to encourage companies to manufacture semiconductors domestically.
With respect to API manufacturing, Murphy noted key regulatory barriers such as slow FDA permitting and that it “can take five to seven years to build a new plant, and three to five years to add a single production line.” To help address the problem, he called on the FDA to expand cooperation with manufacturers by working collaboratively to evaluate and approve the facility and the tech transfer processes concurrently, as opposed to waiting until after the facility is built and the equipment is installed or validated.
To bolster domestic API capacity, Murphy recommended that Congress adopt new tax incentives that promote the reshoring of manufacturing by pharmaceutical companies, as well as invest in the necessary infrastructure. At the same time, he pointed out that the U.S. has dormant capacity and — with the right incentives — existing facilities can restart production lines faster than new plants can be built.
“Many other countries, like Austria and South Korea, have invested heavily to support their own API production,” Murphy said. “The U.S. can and should pursue similar strategies that cluster suppliers and reduce barriers to scale.”
Congress should appropriate multi-year funding for domestic manufacturing capacity “equal to the strategic value of medicines to the United States, comparable to commitments made in the CHIPS Act” for the semiconductor industry with a $280 billion investment.
“These measures are not theoretical,” Murphy concluded. “They mirror the tools that secured domestic production of semiconductors and personal protective equipment. Applying them to medicines will expand U.S. manufacturing, enhance national security, and preserve access to affordable treatments.”
