By Denny Lanfear
October 5, 2020 at 5:00 am ET
The COVID-19 pandemic has exposed a lesson that we should have learned during the 2008 heparin scare that led to hundreds of unnecessary deaths: America is over-reliant on a global pharmaceutical supply chain. Policy changes are needed to foster American manufacturing of critical pharmaceutical products, devices and personal protective equipment. There are straightforward solutions available.
Over the past twenty years, we’ve seen drug manufacturing offshored, lured by foreign tax incentives, by labor laws and through reverse acquisitions. From media reports, it is clear that more than half of active pharmaceutical ingredients are sourced from abroad. This dynamic of dependence creates fear in the American public and could create drug shortages and pain for American health systems and patients.
The U.S. Food and Drug Administration acknowledged through testimony by Dr. Janet Woodcock, “The security of the nation’s drug supply rests on three main factors: freedom from dependence on foreign sources of API, the resilience of our domestic manufacturing base and the reliability of the facilities that make products for the U.S. market.” We also applaud the FDA for its recent editorial on the efforts in this area.
The good news is that we have success stories to guide the way. Across the entire pharmaceutical supply chain, there are “Made in America” companies that manufacture here in the United States, from biologics and personal protective gear to medical devices and diagnostics. These companies create homegrown access to high-quality medicines and products while protecting and growing American, high-tech jobs.
In Coherus’ case, we are the only U.S.-based producer of a critical oncology biosimilar, UDENYCA (pegfilgrastim-cbqv), which boosts white blood cell growth to help chemotherapy patients fight off infections. With this U.S-manufactured product, we have helped create more than $1 billion in savings to the U.S. health system.
On behalf of the U.S. taxpayer, the federal government purchases more than half of our current and future products. Making these products Stateside means those federal funds will be reinvested into tax-paying, high-tech manufacturing jobs.
Since its founding, Coherus has taken risks and proactively invested in America with a focus on quality and job creation. In 2014, Coherus formed a strategic collaboration with KBI Biopharma and introduced the first clinical and commercial bioimilars to their Boulder, Colo., site. Ongoing UDENYCA production at the site contributes to highly skilled and highly desirable biotechnology jobs. Coherus also partnered on a drug product manufacturing contract with Emergent BioSolutions in Baltimore, Md., supporting U.S. jobs there.
These examples offer the important lesson that American companies can, and do, lead in manufacturing cost-effective, high-quality medicines for American patients.
So, in a global marketplace, how do we ensure that America is not overly reliant on foreign suppliers when the next healthcare crisis hits? It is a challenge, certainly, to solve complex policy problems such as these, but there are concrete steps that the government can take to restore balance in the market:
First, the strategic stockpile policy can incent and encourage pharmaceutical, diagnostic, medical device and personal protective equipment production here. Not in a year or two, but immediately.
Second, we need a comprehensive review of trade and tax law changes to design policies that encourage more manufacturing and production here at home.
Third, Congress should continue promoting loan and grant regimes, direct investments and purchase agreements through the National Institutes of Health and Biomedical Advanced Research and Development Authority. Together, these programs, along with Operation Warp Speed, can be game-changers now and over the long haul.
Lastly, we strongly encourage the government to consider an American-made formulary approach within Medicare, the Veterans Administration and the Department of Defense. If there is an American-made pharmaceutical product available, it should be preferred and paid for differently so that jobs and U.S. tax dollars are not sent overseas unnecessarily. An incentive or formulary preference should be enacted not only during public health emergencies, but also as a permanent change in law.
We applaud the leaders in government who have begun to incent American-made medicines and to amend our national stockpile policy, but more must be done. The proposals above would benefit American patients and workers, as well as the long-term U.S. economy, and they will aid U.S. innovators who need new reasons to bring production home. We believe whichever candidate wins the presidential election should partner with Congress to quickly encourage the federal government to buy and reward Made-in-America pharmaceutical supplies, to protect jobs and to foster our strategic security. Without it, we are vulnerable; with it, we don’t have to be.
Denny Lanfear is president, CEO and chairman of Coherus BioSciences, a California-based company focused on delivering high-quality biosimilar therapeutics that will expand patient access to life-changing medicines.
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