Trump’s Push for Domestic Drug Manufacturing Amid Trade War Concerns

President Donald Trump is taking steps to revitalize the U.S. pharmaceutical manufacturing sector amidst an ongoing trade war that has raised concerns about the stability of drug imports. The administration’s initiatives include easing regulations, expediting drug approvals, and considering tariffs on imported pharmaceuticals. These actions aim to reduce reliance on foreign drug manufacturers, address drug shortages, and bolster national security.

On May 5th, President Trump signed an executive order directing the Food and Drug Administration (FDA) to streamline the approval process for domestic pharmaceutical factories. The order seeks to eliminate unnecessary regulations and bureaucratic hurdles that slow down companies seeking to establish manufacturing facilities within the United States.

This push for domestic manufacturing coincides with the administration’s plans to assess tariffs on drug imports. Additionally, proposals are being considered to tie drug prices in the U.S. to the lower prices paid by foreign nations. While the pharmaceutical industry remains apprehensive about tariffs and price controls, there is widespread support for the effort to bring drug manufacturing back to American soil.

Industry officials acknowledge a long-term trend of pharmaceutical companies relocating their manufacturing operations overseas. While global supply chains have enabled companies to produce cheaper drugs with fewer regulatory constraints, experts argue that this trend has contributed to persistent challenges such as drug shortages.

Allan Coukell, chief government affairs and public policy officer at CivicaRx, a nonprofit generic drug company formed by hospitals and philanthropic groups, emphasized the importance of a robust domestic pharmaceutical industry. CivicaRx has invested in a U.S. manufacturing facility to address shortages of essential medications. Coukell pointed out that while shortages can occur at domestic facilities, such as the temporary closure of Baxter’s North Carolina factory due to Hurricane Helene flooding, many shortages stem from reliance on overseas manufacturers in low-cost countries with less rigorous oversight.

The White House, in a fact sheet released on May 5th, highlighted the lengthy timeframe required to build pharmaceutical factories, estimating it at 5 to 10 years. This delay is deemed unacceptable from a national security perspective. The administration cited Gilead Sciences’ planned $11 billion investment in U.S. projects, which includes building three new facilities and upgrading three existing sites, as evidence of the growing momentum in domestic drug manufacturing. The president also touted investments by Abbott Laboratories and Eli Lilly, totaling $500 million and $27 billion, respectively.

Despite the enthusiasm for domestic manufacturing, concerns persist about the potential impact of tariffs on drug prices and availability. Drug industry experts warn that patients could ultimately face higher costs and potential shortages if tariffs are imposed on imported pharmaceuticals.

PhRMA, the drug industry trade group, while supporting the push for domestic manufacturing, cautioned against tariffs. Alex Schriver, PhRMA’s senior vice president of public affairs, argued that tariffs would divert resources away from investment in American manufacturing and the development of new treatments. Schriver emphasized that drug companies share the administration’s goal of revitalizing U.S. manufacturing but believe that tariffs would be counterproductive.

The American Cancer Society also expressed concerns about potential disruptions to the supply chain for generic, sterile injectable cancer drugs. In a letter to the Department of Commerce, the organization warned that the market for these drugs is multinational and fragile. The society cited a recent shortage of the chemotherapy drug cisplatin, which occurred when an India factory that supplied half of the U.S. market shut down to address quality issues. The American Cancer Society argued that tariffs could exacerbate shortages and endanger the health and safety of cancer patients.

Furthermore, concerns have been raised about the administration’s proposal to tie drug prices for Medicaid to the prices paid by foreign nations. Some experts estimate that this proposal could cost drug companies as much as $1 trillion over a decade. The Alliance for Aging Research criticized the proposal as a "scam" for American beneficiaries.

Trump’s executive order on domestic manufacturing also seeks to address what FDA Commissioner Marty Makary described as a "double standard" in the inspection of drug manufacturing facilities. According to Makary, overseas factories often receive advanced notice before inspections, while American manufacturers are subject to more rigorous standards with no such warning.

The FDA suspended most routine, on-site inspections of overseas drug factories during the first two years of the COVID-19 pandemic. A 2022 report by the U.S. Government Accountability Office revealed that the agency completed only 18 "high priority" overseas inspections between October 2020 and April 2021, primarily in China.

The FDA maintains that it conducts approximately 12,000 domestic inspections and 3,000 foreign inspections each year. However, the agency acknowledges that it finds deficiencies twice as often in overseas facilities, even with advanced notice of inspections.

The FDA has announced plans to review its foreign inspection program, including policies that prohibit inspectors from accepting lodging and transportation from drug and device companies. The agency also asserted its authority to take action against companies that attempt to delay, deny, or limit inspections.

Some analysts have questioned the FDA’s leverage in enforcing inspections at overseas facilities, particularly if a trading partner refuses to cooperate. Rosemary Gibson, a senior advisor at the Hastings Center, argued that the FDA might lack the authority to force inspections in such cases.

Despite these challenges, Gibson suggested that disclosing inspection data by country and manufacturer could benefit drug purchasers. Government agencies and U.S. companies could use this information to make informed purchasing decisions, favoring manufacturers that comply with U.S. standards.

In conclusion, President Trump’s efforts to revitalize domestic drug manufacturing are driven by concerns about national security, drug shortages, and the potential impact of trade wars. While the pharmaceutical industry generally supports the goal of increasing domestic production, there are concerns about the potential consequences of tariffs and price controls. The FDA is taking steps to improve its oversight of overseas drug manufacturing facilities, but questions remain about its ability to enforce inspections in all cases. Ultimately, the success of this initiative will depend on a complex interplay of economic, regulatory, and diplomatic factors.