Trump's push to push for U.S. drug manufacturing push to expand to new executive orders drug ingredients
Even when the drug is finished in the United States, its active and inactive ingredients often come from overseas. Although pharmaceutical companies have been announcing plans to target new U.S. manufacturing plants in response to the Trump administration’s threat to tariffs, few of these plans mention active pharmaceutical ingredients or APIs.
The Trump administration’s policy goal of bringing drug manufacturing back to the U.S. is now extended to the API under a new executive order signed on Wednesday. The government is making a list of drugs that are “critical to the national health and safety interests.” According to the list, the government will store APIs for these drugs.
The administration noted that nearly two-fifths of prescription drugs were completed in the United States, but in the United States, only about 10% of these finished APIs were established on the first inventory initiative launched by the Trump administration in the United States. In 2020, the government created a strategically active drug ingredients reserve (SAPIR) to store APIs.
Under the order, President Biden's drug procurement and inventory has not increased, and Sapier is now almost empty. The order directs part of the Department of Health and Human Services (HHS) to prepare the Assistant Secretary’s Office (ASPR) to develop a list of approximately 26 key medicines. The order also directs the office to occupy funds that can be used to stock and maintain Sapir and to maintain an API supply of six thousand goods for these drugs.
“Inventory APIs are advantageous because APIs are often lower than the drugs made and have a longer shelf life,” the order states. “Filling Sapir will also save the United States from foreign countries around the world, sometimes a concentration of rival countries, and sometimes a supply of key starting materials used to make APIs. In addition, government purchases APIs to fill SAPIR can encourage more domestic APIs.”
There are some actions in domestic API production. Abbvie this week announced plans to invest $195 million in its existing North Chicago plant to expand its API manufacturing capabilities. The announcement is part of a more than $10 billion capital investment planned by the drugmakers. Construction of the API facility will begin later this year and is expected to begin operations in 2027. When Eli Lilly announced plans to expand its $5.3 billion plan on an Indiana website last year, the company said the location would enable active pharmaceutical ingredients in its metabolic drugs Mounjaro and Zepbound. But it is not clear that these products will cut key or essential medicines.
In 2020, Trump issued an executive order directing the FDA to list essential medicines, medical responses and key inputs. ASPR then narrowed the list to 86 essential drugs. The latest executive order directs ASPR to update its essential medicine list and provide plans for access to these medicines and tends to domestic manufacturers. Sapir will also maintain a six-month supply of these essential medicines (if not already on the list of key medicines).
It seems that Trump has not sought new Congressional funding for stocks. The order states that the Office of Management and Budget will help HHS promote available funds consistent with the law. This step will take place within the next 30 days. Within 120 days of order, allowing the availability of funds, ASPR will prepare Sapir to accept APIs. The order also requires proposals and cost estimates to open a second SAPIR in the United States within one year.
Puneet Souda, an analyst at Leerink Partners, said in a note sent to investors that it was difficult to assess the impact of the order until 26 key drugs were selected. He is also waiting for clarity on financial details, for example, whether the government is willing to pay higher prices for inventory APIs and generics produced in the United States when the United States is primarily India and other countries in China.
“The FDA's list of essential drugs released in 2020 favors generic drugs such as amoxicillin, acetaminophen and antibiotics, i.e., low-cost, high-volume drugs,” Souda said. “Making such APIs in the United States may increase costs/pills due to increased labor, energy and compliance costs.”
Photo: Andrew Harnik, Getty Images
