President Trump Signs Executive Order to Encourage U.S. Manufacturing of Essential Medications

Manatt on Health

On August 6, President Trump signed an Executive Order, Ensuring Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States, designed to reduce U.S. dependency on foreign sources of pharmaceuticals and other medical technologies while, at the same time, reviving U.S. manufacturing for these products. The order is distinct from the President’s other recently issued prescription drug actions in that it does not address drug prices.

The order directs the Food and Drug Administration (FDA) to compile a list of “Essential Medicines, Medical Countermeasures, and Critical Inputs” by early November. The order does not specify the criteria for defining these essential products, but discusses the need for medicines to address “outbreaks of emerging infectious diseases and chemical, biological, radiological, and nuclear (CBRN) threats.” The U.S. does not currently maintain a list of essential medicines.1 And the concept of essential medicines has proven controversial because of its use to support limitations on intellectual property rights and justify price controls.

Once the FDA acts to identify essential products, the order lists a variety of actions that U.S. government agencies will take to encourage the purchase of U.S.-made essential products and to facilitate domestic manufacturing of such products. Because the U.S. government directly purchases a very small share of prescription drug and medical device supply, the impact of the Order on manufacturing may be limited, beyond products that are produced primarily for U.S. defense, including biodefense, purposes. And because manufacturing of medical products outside the U. S., especially in India and China, has grown over the past decades because of lower costs in those nations, it is possible that favoring domestic suppliers could increase government procurement costs.

Like with other recent Executive Orders, this Order will require further administrative actions over the next weeks and months. It is also possible that congressional activity in this area will reinforce and extend the concepts behind this Order in ways that could have a more significant impact on pharmaceutical and medical device manufacturing.

1 The World Health Organization maintains an essential medicine list, although it includes a set of medicines that is much broader than appears contemplated in the order.



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