The Trade-off in Trump’s Executive Order on Essential Drugs

The Trade-off in Trump's Executive Order on Essential Drugs

Pharmaceutical manufacturing has long been a dirty business.
The antibiotic-laced wastewater, and other pollutants it leaves behind, is just one of many reasons that so many American drug-manufacturing plants closed up over the last few decades and moved to places like Hyderabad, India, and China’s Zhejiang province, with their low labor costs and minimal regulations.
But drug manufacturing in those remote outposts has been dirty in another way, as I learned from a decade of reporting that culminated in my book Bottle of Lies: the Inside Story of the Generic Drug Boom. The FDA’s own inspection records, as analyzed by FDAzilla, reveal that drug plants in China and India are more likely than those in the U.S. and Europe to manipulate data about quality to make substandard low-cost drugs appear compliant with good manufacturing practices, standards required for export into the U.S. and other developed markets.
On August 6, President Trump signed an executive order to encourage the federal government to buy American-made essential medicines. The goal—to rebuild America’s lost drug-manufacturing capacity—is critical. COVID-19, which has unleashed a global scramble for essential medicines, has crystallized the potential life-and-death consequences of our unhealthy dependence on low-cost generic drugs manufactured overseas. To date, amid a flurry of industry and legislative efforts, Trump’s order is the most high-profile effort to support “reshoring,” the return of drug manufacturing to the United States.
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On a first read, the executive order seems to tackle the most troubling aspects of our current system. It calls on the Food and Drug Administration (FDA) to conduct more unannounced inspections of drug plants overseas, a tacit acknowledgement of a failed inspection system that has allowed companies operating abroad to prepare for pre-announced inspections, turning their plants into veritable charades of compliance. Falsified results have allowed generic drugs with toxic impurities and dangerous particulates, or that are not bioequivalent to brand-name drugs, to enter our supply.

The executive order also encourages advanced manufacturing techniques, a higher-tech form of manufacturing with a lighter environmental footprint.
But the executive order seems to miss an essential point: we shouldn’t trade low-quality drugs made at a distance for low-quality drugs made at home. In trying to ramp up domestic manufacturing, the order appears to open the door to a dangerous decline in quality. It allows the FDA to examine whether any existing regulations are a barrier to domestic production, and it also allows the Environmental Protection Agency to streamline regulations that might currently deter manufacturing but also serve to ensure public health safety and safeguard the environment.
The trade-off threatens to be a Faustian bargain: America can rebuild its domestic drug manufacturing but has to accept lagoons of antibiotic-laced effluent and low-quality generics replete with side effects and possible carcinogens in return. “It is a bad idea to say that it is more important to have drugs made domestically than it is to have drugs made with high quality,” says Mark Rosenberg, the CEO of Just Medicine Inc., a nonprofit aimed at increasing the supply of ethically made low-cost generics currently in short supply. “The way to level the playing field is not to just lower standards for domestic manufacturing.”
It remains unclear what kind of effect the executive order will have. Unlike other countries with nationalized health systems, where governments are the predominant pharmaceutical procurers, America’s federal government directly procures only a small percentage of medicine taken in the U.S., through the Veterans Health Administration and Department of Defense. To really restore U.S. drug manufacturing, says Rosenberg, there need to be incentives for the private sector that purchases medication to “actually value American-made.”
This is where the American consumer comes in. Most of us have little say in what kind of medicine we get. Many Americans receive their drugs in the mail from pharmacy benefit management companies, which make drug-purchasing decisions through an opaque system that relies on rebates. Or Americans go to big pharmacy chains whose buying decisions are guided by cost.
Though a manufacturer name usually appears on the dispensing label, there is no way for a consumer to know whether their drugs are made in North Carolina or Northern Punjab. Perhaps the best way to restore American pharmaceutical manufacturing—and to drive a “Buy American” revolution—is to give consumers the information so many of us want. Where are our drugs made, and under what conditions?
The executive order acknowledges that price is an issue: it states that federal procurers would be allowed to prioritize the purchase of American-made drugs that are up to one-quarter more expensive than foreign-made versions. But if employers or chain drugstores gave their employees or customers a choice—to fork out a slightly higher co-pay for a drug made in America, at a plant with higher standards that was better inspected— many of us would jump at the opportunity.
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