Trump signs ‘Buy American’ executive order for essential drugs

President Donald Trump signed an executive order on Thursday that calls on federal agencies to purchase “essential drugs” and medical supplies made in the U.S., rather than from overseas companies who now provide the bulk of those materials.

The order, which Trump discussed at a Whirlpool Corp. manufacturing facility in Ohio, aims to guard against shortages of critical medicines and supplies due to breakdowns in the global supply chain — a concern that has been exacerbated by the coronavirus pandemic.

“We’re dangerously overdependent on foreign nations for essential medicines, for medical supplies like masks, gloves, goggles and the like,” said Peter Navarro, Trump's top trade adviser, on a call with reporters.

What the order says: The Trump administration isn't immediately specifying which drugs or supplies should be manufactured in the U.S., instead directing the FDA to make that determination. The order allows for broad exemptions based on cost, availability and "public interest." For instance, it carves out drugs if domestic production would increase procurement costs more than 25 percent or if they are already made outside the U.S. and are of a satisfactory quality.

Cowen Washington Research Group's Rick Weissenstein said the order "is not likely to seek to move much if any existing manufacturing" back to the U.S., but it instead focuses on building future capacity for domestic drug production.

Navarro argued countries like China and India, have an “unfair competitive advantage because of their lack of regulatory environment” and other countries like Ireland have tax incentives in place “designed to pull pharmaceutical manufacturing offshore and into their boarders." Navarro didn't indicate that the administration would make new investments or advocate for new tax incentives to bring drug manufacturing onshore — the order, he said, "is not an appropriations bill" and is aimed at establishing government demand for U.S. products.

Only 28 percent of manufacturing facilities making drug ingredients for the U.S. are based in the country, FDA drug chief Janet Woodcock testified to Congress last October. China is home to 13 percent of those facilities, she said.

Stephen Ubl, president and CEO of PhRMA, slammed the executive order as the White House's latest distraction from the Covid-19 pandemic.

“The administration is forcing biopharmaceutical companies to shift their critical attention and resources away from COVID-19 work to focus on making substantial changes to their business models necessary to comply with this and other recent executive orders," Ubl said. "Increasing U.S. manufacturing of medicines is a laudable goal, but it cannot happen overnight and should not come at the expense of medical innovation or Americans’ access to the medicines they need."

Jeff Francer, interim CEO of the generic drug lobby, the Association for Accessible Medicines, also criticized the order. He said the price of generics are so low in the United States, it would be too expensive to move more production into the United States.

“Without addressing the undervaluation of generic and biosimilar medicines in the U.S. with sustainable market supply plans, we simply cannot secure the domestic market and supply chain with scale and sustainability," he said in a statement.

Other planks of the order aim to cut EPA and FDA regulation to speed development of domestic advance manufacturing for products needed for rapid response to pandemic and chemical, biological, radiological and nuclear defense threats. Navarro argued the efforts to speed FDA approval or clearance will not cut corners that could jeopardize safety, saying “we simply want a more rational and streamlined regulatory process.”

Background: The order has been in development for months, but Navarro said it had been held by by legal review in the White House.

It also comes one week after Trump said the federal government will issue Eastman Kodak a $765 million loan to manufacture drug ingredients. Details about how the company obtained the government’s support have come under scrutiny by Democrats and the Securities and Exchange Commission because of stock transactions around the announcement of the deal.

Zachary Brennan contributed to this report.