‘Essential medicines’ to be made in US using Defense Production Act. What does it do?

High-priority medicines will soon be manufactured in the United States, President Joe Biden said, invoking a Cold War era law that gives the executive branch sweeping powers.

The White House unveiled the plan on Nov. 27 as part of a broad strategy to help strengthen American supply chains.

Under the plan, the Department of Health and Human Services will be authorized to invest in “domestic manufacturing of essential medicines, medical countermeasures, and critical inputs that have been deemed by the President as essential to the national defense.”

So far, the department has alloted $35 million to invest in “key starting materials” for certain medical supplies, according to the White House.

The authority to enact such a measure is granted to the president under the Defense Production Act, which was passed during the early years of the Cold War.

What is the Defense Production Act?

The act — passed by Congress in 1950 — was modeled after the War Powers Acts of World War II, which gave President Franklin D. Roosevelt broad war-time powers, according to the Congressional Research Service (CRS).

The law authorizes the president to control the production of “essential materials and goods” in the name of national defense, according to the CRS.

Under the act, the president can require businesses to accept contracts necessary for national defense and can incentivize expanded production of critical goods.

Additionally, it authorizes the president to block mergers and acquisitions that endanger national defense and call on industry executives to volunteer for government service.

When has it been used?

Presidents and executive branch agencies have used the DPA to mold the economy for the past seven decades.

The day after the act was passed, President Harry Truman issued an executive order granting cabinet officers — including the secretaries of agriculture and the interior — authorities under the DPA, according to his presidential library.

More recently, President Barack Obama assigned DPA authority to more than a dozen federal agencies, including the Homeland Security Council, in a 2012 executive order, according to White House archives.

President Trump, during the early months of the COVID-19 pandemic in 2020, used the DPA to order General Motors to manufacture ventilators, according to White House archives.

The Trump administration soon invoked the DPA again to compel companies to make medical masks, testing kits and other key supplies, according to CNBC.

As one of his first acts as president in 2021, Biden released an executive order directing federal agencies to restock medical supplies for combating COVID-19 using the DPA. The following month, his administration invoked the DPA to boost vaccine supplies.

Criticisms

The DPA, thanks to the sweeping nature of the powers it grants the president to reorder the economy, has been the subject of criticism over the years.

During the COVID-19 pandemic, some governors and hospital officials complained that the federal government, using the DPA, had seized their personal protective equipment, according to the New York Times.

“FEMA realizes that prioritizing P.P.E. deliveries to Covid hot spots can have the unintended consequence of disrupting the regular supply chain deliveries to other areas of the country that are also preparing for the coronavirus,” FEMA spokesperson Lizzie Litzow told the outlet.

The exercise of the DPA’s “colossal power” can produce unintended consequences and collateral damage, including by disrupting the needs of state and other non-federal actors, according to a 2021 article in the Southwestern Law Review.

Additionally, the DPA has the power to be abused because as the act “itself is not political, capricious, or malevolent...the humans who wield it are perfectly capable of being so.”

Why is Biden invoking it now?

During the COVID-19 pandemic, the American economy was confronted by supply chain issues that made acquiring critical medical supplies a difficult task, according to the White House.

As a result, the Biden Administration says it has made combating sluggish supply chains — which can result in drug shortages and higher inflation — a top issue.

“Robust supply chains are fundamental to a strong economy,” the White House said.

“When supply chains smooth, prices fall for goods, food, and equipment, putting more money in the pockets of American families, workers, farmers, and entrepreneurs,” the White House said.

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