Proposed bill aims to encourage US pharmaceutical manufacturing

By Jenni Spinner

- Last updated on GMT

(narvikk/iStock via Getty Images Plus)
(narvikk/iStock via Getty Images Plus)

Related tags Pharmaceutical supply chain Manufacturing Supply chain Supply chain management API

Introduced by two Republican Congressmen, the American Made Medicine Act is intended to boost domestic drug manufacturing and create jobs in the sector.

Congressmen Brad Wenstrup (R-Ohio) and Drew Ferguson (R-Georgia) have introduced the American Made Medicine Act. The legislation is intended to secure the country’s medical supply chains, reduce reliance on China and India for pharma products, and create jobs in the pharmaceutical sector.

Wenstrup said the country is put at a disadvantage by an overreliance on China and other countries in purchasing pharmaceuticals, medical devices, personal protective equipment (PPE), and other essential products.

“The COVID-19 pandemic revealed these critical vulnerabilities in America’s medical supply chains," said Wenstrup. "America can and should continue to be the world’s leader in medical innovation and advanced medical manufacturing.”

Ferguson added, “Incentivizing domestic production will not only support good, high-paying US jobs, it will also reverse our reliance on foreign manufacturing. Further, I’m pleased that this bill will invest in a rust belt revitalization by rehabilitating existing manufacturing facilities and equipment to meet today’s regulatory standards.”

The bill consists of three primary components:

  • Domestic Medical and Drug Manufacturing Tax Credit: lowers the tax rate on income attributable to the domestic manufacturing and sales of active pharmaceutical ingredients (APIs) and medical countermeasures, including nitrile gloves.
  • Advanced Medical Manufacturing Equipment Credit: this 30% investment tax credit (phased out over 10 years) for investments in advanced manufacturing equipment or machinery used to manufacture drugs, medical devices, or biological products in the US.
  • Medical Manufacturing EPA Compliance Credit: another 30% investment tax credit (also phased out over 10 years) for investments in equipment/property used to meet emissions standards under the Clean Air Act or the Clean Water Act.

Outsourcing-Pharma checked in with a number of pharmaceutical industry experts for their impressions of the proposed legislation. Sarah Griffin, event manager for CPhI North America​ said that domestic manufacturing is a “hot topic” but surmised that centering solely on the country in which a manufacturer is situated may be misguided.

What we should be asking is how we can build proper resilience into pharma supply chains – and this means having contingencies in place​,” she said. “Globally, we are seeing a trend at CPhI, and our North America show reflects this, for increasing diversity, flexibility, and reliability in supply partners​.”

Griffin added that the challenges of the pandemic era also have seen a high level of success and demand; this might mean the need to build more local manufacturing, but the industry also should aim toward partnering with the best suppliers for particular needs.

One of the challenges during the pandemic was a huge demand for outsourcing but no ability to meet new partners in person; what we now expect is a few years of accelerated partnering, and CPhI has a big role to play in enabling the supply chain that opportunity,​” she commented. “Our platforms are designed for pharma professionals to make more connections and, crucially, to make them count—our events are at the heart of pharma and we recognize not only the importance of this to the industry, but also to patients in helping ensure access to medicinal products​.”

Nicole Longo, a spokesperson for the Pharmaceutical Research and Manufacturers of America (PhRMA), said, “We are still reviewing the bill, but we support efforts to foster more manufacturing in the US and believe incentives can play a key role in helping support the substantial investments required to increase US manufacturing.​”

The Ferguson-Wenstrop bill is not the first move by US officials to improve the pharmaceutical supply chain. In August 2020, Senators Elizabeth Warren (D-Massachusetts) and Marco Rubio (R-Florida) introduced a bill that encouraged a thorough assessment of the country’s pharmaceutical supply chain.

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