The U.S.' “onshoring” initiative that kicked off during the Trump administration at the height of the COVID-19 pandemic has been carried forward by President Joe Biden, who recently committed $2 billion in a bid to rejuvenate the U.S.’s biotech and biomanufacturing base.
Now, as the nation works to take drug manufacturing back into its own hands, one group of researchers suggests the country already has production capacity to spare.
Among a cluster of 37 U.S.-based generic pharmaceutical manufacturing sites, just two sites were working at or near full capacity during May and June, according to a new study from the Washington University in St. Louis’ Center for Analytics and Business Insights (CABI). Further, nearly 30% of the facilities CABI polled were either idled (5.4%) or were utilizing 50% or less of their manufacturing capacity (24.3%).
The team conducted its survey by contacting 18 generic drug manufacturers in the U.S. during May and June. Thirteen companies responded to the poll.
Were the U.S. generic sites running at maximum capacity, the researchers estimate the factories could crank out nearly 30 billion additional doses of essential drugs “without the expense and effort of building new manufacturing plants,” Washington University in St. Louis explained in a release.
The study authors recommend that the idle sites be repurposed to enable manufacturing to address drug shortages, plus to bolster supply chain resiliency.
Further, the team endorses federal spending to support advanced manufacturing technologies to reduce production costs, create new job opportunities and increase the economic stability of U.S. drug manufacturing.
One such advanced manufacturing method that’s been gaining steam in recent years is continuous manufacturing, where production steps play out in an unbroken stream, rather than the piecemeal batch approach the industry’s used for decades.
Meanwhile, the generics makers’ excess capacity shouldn’t come as a total shock, the CABI team noted. The copycat drug business is “often defined as a ‘race to the bottom’ industry,” beholden to “intense pricing pressure,” they explained.
The report comes amid a climate of increased supply chain scrutiny and efforts to bolster domestic drug manufacturing, spurred in no small part by weaknesses laid bare during the peak of the COVID-19 pandemic.
Last summer, the Biden administration unveiled the result of a sweeping investigation of America’s supply chains, including those for drugs and pharmaceutical ingredients. The proposed solution: a massive strategy to bolster domestic drug production.
Concerns have surfaced across the pond, too, where lobbying group Medicines for Europe recently warned that a confluence of public health emergencies, the war in Ukraine and generic pricing pressures have taken a toll on the EU’s supply of cheaper, off-patent medicines.
The group has asked the bloc’s energy and health ministers to make policy considerations aimed at buoying the continent’s generics sector.
But while domestic production is much needed, it isn’t the end-all-be-all of resilient supply chains, according to consulting firm EY, which recently issued its own report on ways the biopharma industry can bolster supply chain stability.
Ultimately, the group envisions the current, “fully globalized” supply model shifting to a “hybrid” one balanced across various worldwide, regional and local sites. It laid out a number of alternatives to pure localization, too, such as “hub-and-spoke” manufacturing as well as the use of so-called procurement clearing houses.