President Donald Trump on Thursday signed an executive order directing federal agencies to boost onshore production of essential medicines, medical supplies and medical equipment.
The broad directive is supposed to ensure the U.S. has enough medical countermeasures to respond to pandemics and chemical, biological, radiological or nuclear threats.
"We're dangerously overdependent on foreign nations for our essential medicines, for medical supplies ... and medical equipment," White House trade advisor Peter Navarro said during a press call.
In addition to a so-called "Buy American" provision, the order instructs federal regulators to ease restrictions on manufacturers, streamline regulations and support continuous and advanced manufacturing.
The executive order tells federal agencies only to allow U.S. producers to bid on related federal contracts and make sure that at least two manufacturers are awarded contracts.
Navarro said other nations "won't be able to get away with" not rigorously inspecting manufacturing facilities like the U.S. But it's not clear how the directive would affect U.S. policy or enforcement since HHS would have to "negotiate with countries to increase site inspections and increase the number of unannounced inspections of regulated facilities," according to the executive order. It gives HHS the ability to block imports if facilities "refuse or unreasonably delay an inspection."
The order also asks federal agencies to change their policies to make sure the U.S. has enough ingredients and other critical inputs to manufacture essential medicines, medical supplies and medical equipment.
FDA will have 90 days to update its procurement strategies and HHS will have 180 days to take to identify weaknesses in the supply chain, including proposing new regulations, updating industry guidance and recommending changes to the law. Likewise, the Department of Commerce will have six months to make recommendations about strengthening the nation's public health industrial base.
However, the executive order includes critical exceptions that could significantly affect how federal policymakers implement the president's agenda. Agency heads can opt of specific provisions if they decide it would go against the public interest, increase procurements cost by more than 25% or the goods aren't available domestically "in sufficient and reasonably available commercial quantities and of a satisfactory quality."
The COVID-19 pandemic caught the healthcare industry, policymakers and the public off-guard, leading to widespread shortages of personal protective equipment, drugs, ventilators and other critical supplies and equipment. Hospitals, suppliers and other industry stakeholders are changing how they manage their supply chains to make sure it doesn't happen again. Legal and regulatory changes could make it easier for them to create more resilient supply chains.
"It's now clear that supply chain diversification and increased domestic manufacturing of medical products is critical to preserving our country's ability to respond to major public health crises," Senate Finance Committee Chairman Chuck Grassley (R-Iowa) said. "These are structural problems exacerbated by years of inaction from previous administrations of both parties."
It's unknown how the executive order will affect the healthcare industry's ability to manage its supply chains because federal agencies haven't worked out the details.
With his poll numbers sagging, Trump is looking to strengthen his healthcare record heading into November's election. The executive order is an opportunity for him to address criticisms that he's mishandled the pandemic response. It also allows Trump to say he's making good on his campaign promises to bring manufacturing jobs back to the U.S., take on China and put "America first."
But without a sustained commitment from the White House, Trump's executive order could become largely symbolic if it falls by the wayside as regulators prioritize other policy issues.
Navarro is a well-known trade skeptic and China hawk. He is the driving force behind Trump's trade policies, so it's no surprise to see him take a leading role in crafting the administration's attempt to onshore the production of medical countermeasures. During a call with reporters, Navarro said other countries are "punching above their weight" in medical supply chains because of their tax policies, lax regulations and "cheap sweatshop labor."
Presidents use executive orders to communicate their policy priorities to federal agencies and the public, but their practical effects vary. Unlike laws passed by Congress, executive orders don't give regulators new power or funding. They tell agencies how to use their existing power and funding to achieve the desired outcome or create a new policy process. The success of an executive order depends on how well it's crafted and how committed the president is to see it through.
Unlike conventional batch manufacturing, continuous manufacturing allows the manufacture, production or processing of materials without stopping.
Advanced manufacturing involves the rapid addition of new technologies or methods to the production process. It's contrasted with traditional manufacturing, which often takes years to adopt innovative technologies or practices.
Many experts say federal regulations prevent healthcare suppliers and manufacturers from using continuous and advanced manufacturing strategies because current policies are geared toward traditional manufacturing.
