National Security Stocks for Drug Tariffs

Due to multiple events, the intersection of drug supply chains and national security has been the front row and center: such as Hurricane Helen’s widespread shortage of intravenous injections after Hurricane India Food and Drug Administration (FDA) examinations, due to the pain of Hurricane Helene, the media caused by the media, as well as oncology drugs in general.

Recently, the Ministry of Commerce Article 232 investigated that an executive order was put into operation of domestic manufacturing and the looming tariff threats, raising eyebrows on the strength of our country’s pharmaceutical supply chain and whether it could be truly preventable and preventable shocks.

The answer is no.

Americans can give up purchasing consumer goods or other items subject to tariffs within a period that is needed for market forces to adjust and meet demand. By contrast, health care provision is directly related to Americans’ safety and national security, as any availability endangers the health of our nation. Americans cannot give up on using life-saving drugs.

Medicines are not your ordinary product, it is important to pay attention to the following:

• From a national security perspective, all drugs are not the same. Although the drug provides some degree of clinical benefit to patients, the FDA and the Department of Defense (DOD) believe that there are few necessary drugs, so that the inability to obtain such drugs can lead to catastrophic results for Americans and threaten our national security.
• The drugs that FDA and DOD consider essential are general medicines and are often prone to drug shortages.
• Pharmaceutical manufacturing is a highly regulated and complex process that requires a lot of financial investment and time. Repatriation of the drug supply chain cannot occur overnight.
• The availability of drug delivery mechanisms, such as needles, syringes, glass vials, rubber blockages, intravenous bags, may also affect drug availability.

To illustrate the challenges that are critical to national security and their current manufacturing footprint, it is easy to highlight examples:

• Sodium bicarbonate injection is used to urgently treat cardiac emergencies and has been prone to shortages since 2017. Since then, public and private investment has enabled domestic manufacturing of sodium bicarbonate to account for more than 97% of U.S. patient utilization. Although mainly produced in the United States, the product is still at risk of shortage. This is a key example of how domestic manufacturing alone does not equal the availability of products and that more investment is required to create a flexible source of domestic production that can meet the needs of our country.

• Fentanyl citrate is an essential drug used for its analgesic and anesthetic properties and has been prone to shortages since 2012. While there are several home manufacturers with finished dosages and active pharmaceutical ingredients (APIs) (APIs), the main starting material – poppy seeds – is mainly grown in Afghanistan and Australia, which are mainly transported to China in Afghanistan and Australia. This creates upstream over-dependence and production bottlenecks in foreign countries. Addressing national security risks associated with fentanyl will require investments to transfer major starting substance treatments to the United States as well as agricultural investments to grow poppy seeds in the United States

• Cephalosporin antibiotics are a class of drugs used to treat multiple bacterial infections and have been prone to shortages since 2015. Cephalosporin antibiotics do not have known finished doses of home manufacturers, and there are two major API manufacturers located in Italy and China. Although Italy has traditionally been viewed as a U.S. ally, it imposed an embargo on medical supplies during the pandemic. This shows that our over-dependence on foreign countries extends beyond China.

While thoughtful and targeted use of tariffs can increase supply chain resilience over the long term, the increase in tariffs on drugs by materials and the rapid implementation timelines can lead to unintended consequences that increase costs and shortages in the short term. Any unified trade policy on medicines must ensure that overall supply chain resilience goals are met while minimizing downstream impacts on patient care. Therefore, the government must:

• Develop a method for implementing tariffs for drugs that the FDA and DOD consider separate from all other drugs because of their direct impact on national security;
• Provide a slow and stable Glidephath approach to implement tariffs on pharmaceutical companies to help ensure that manufacturers and healthcare providers have enough time to cope with and adapt to new tariffs while continuing to effectively provide essential health care;
• Clarify or not pay specific drug categories, including clear definitions for drug components subject to tariffs, as well as the intersection of drugs and their associated delivery mechanisms;
• Study the impact of tariffs on pharmaceutical supply chains to ensure tariffs meet the ultimate goal of promoting domestic creativity and identifying any unintended consequences, such as the increase in costs or shortages, which require rapid remediation to prevent patient harm; and
• Strengthen the resilience of the supply chain through other mechanisms such as tax incentives supporting domestic manufacturing industries, and the creation of trusted trading partnerships.

Tariffs on drugs can provide opportunities to strengthen domestic supply chains, enhance product availability and protect patient care. But they cannot be implemented in a vacuum. Tariffs should be utilized in a balanced manner and directly related to measurable improvements in the resilience of the U.S. healthcare supply chain.

Photo: Alexlmx, Getty Images

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