GDP Blog


Posted by Seth Denson

Mar 23, 2020 8:02:45 AM

While the global health concern surrounding coronavirus is laser-focused on finding a vaccine, the average U.S. citizen and consumer of “tips on how to combat the spread of coronavirus” is unaware of the severe incapacity of the U.S. to manufacture, in bulk, the amount of vaccines necessary in this (or any future) health crisis.

In order to make a vaccine, active pharmaceutical ingredients (“API”) are necessary. Currently, 90% of all active pharmaceutical ingredients utilized by U.S. drug manufacturers are made in China with one notable exception, Pfizer, who has three U.S. based API manufacturing facilities. Because of this, Pfizer, according to a spokesman, is able to manufacture their products with less than 2% of their API’s coming from China[1]. But it’s not just vaccines; additionally, it’s estimated that 97% of all antibiotics come from China as well[2].

Meanwhile, with U.S. pharmaceutical companies quietly outsourcing the health and safety of our citizens with nary a whimper from the average American consumer, we are now faced with a dual problem.

First, capacity. Even if the United States were to develop an effective vaccine to the coronavirus, we are fully reliant upon China to give us the API necessary to mass-produced it. There is nothing in the current coronavirus legislation which addresses the need for rapid, mass drug production.

Second, security. Even if the United States were to negotiate – to have the major drug companies like Roche or Johnson & Johnson bring back the drug supply chain – what incentive is there for drug manufacturers to do so? With pharmaceutical spending projected to reach $500 billion in U.S. by 2020, drug companies have, and will continue to generate massive profits by outsourcing API manufacturing to China. This is why President Trump’s re-calibration of the relationship between the U.S. and China was so necessary.

Furthermore, manufacturing is not just about creating jobs, even though for a politician this is often the most important. Manufacturing is also about having in place the processes necessary for national security when it is tested. We needn’t look further than World War II to find a perfect example of this.

During the Second World War, America (not China) was the world’s largest industrial manufacturer. As a result, American industry provided almost two-thirds of ALL the Allied military equipment produced during the war. Then, in the four years of American engagement in World War II, American industrial production DOUBLED in size[3] . The U.S. defeated Nazi-ism because the U.S. didn’t have to rely upon another country to help them build the tools needed to eliminate Hitler.

This is most definitely not the case today as we face a pandemic.

Today, China is number one in the world in terms of manufacturing output with $2.01 trillion generated by that sector in 2018. Meanwhile, the United States is in second place, lagging $200 billion behind with only $1.867 trillion. Twenty-five percent of this valuation is due to U.S. pharmaceutical industry.

As we continue to focus on combating coronavirus no

w, we should also prepare to fight coronavirus and/or the next health pandemic in the days to come by ensuring we bring API manufacturing back onshore in the U.S. Washington, D.C. knows another global pandemic will arise. The question is how do we ensure the U.S. the best prepared when it does?

Read More

Topics: pharmaceutical, COVID19, COVID-19, China, coronavirus

TRACTION or TALK: The Impact of the Administrations Approach to Prescription Drugs

Posted by Seth Denson

Feb 13, 2019 7:24:12 AM

When it comes to health care, targeting the cost of Prescription Drugs has become to the Trump Administration what the ACA was to the Obama Administration – its primary focus. Since his inauguration, President Trump has continuously challenged the pharmaceutical industry, even appointing Alex Azar, a former Big Pharma Exec, to head the Department of Health and Human Services. During his recent State of the Union address, the President continued his rallying cry stating, “It is unacceptable that Americans pay vastly more than people in other countries for the exact same drugs, often made in the exact same place. This is wrong, this is unfair, and together we will stop it. We will stop it fast,” he said. However, when it comes to prescription drugs, the Administration may be reaching the limit on what it can do on its own and ultimately will need Congress to pass new legislation to move the needle much further. Recognizing this, the President went on to say in the SOTU address when referring to prescription drugs, “I am asking the Congress to pass legislation that finally takes on the problem of global freeloading and delivers fairness and price transparency for American patients.” But Congress may be faced with a challenge when addressing this issue, as the most common approaches aren’t without their possible political ramifications. For example:

  • Allowing Americans to import cheaper drugs from Canada may be a challenge as it could be seen as undercutting U.S. jobs;
  • Tying prices in the United States to what companies charge in foreign countries could be seen as price fixing; and
  • Allowing the U.S. Government to negotiate costs in Medicare Part D may prove difficult because of the ultimate power of Pharma lobbying.
Read More

Topics: prescription drugs, Trump, congress, pbm, costs, hhs, big pharma, pharmaceutical, legislation

Subscribe to Email Updates

Stay Connected

Popular Posts