Diversify and Fortify U.S. Medical & Pharmaceutical Supply Chain to Avert Drug Shortages
Data shows the U.S. healthcare industry is far behind its retail and technology peers when it comes to offshoring manufacturing from China
Birmingham, AL (April 13, 2023) – The Senate Committee on Homeland Security’s recent report on drug shortages warns that the supply chain issues causing medical product deficiencies may lead to a national security crisis if nothing is done to resolve them.
This warning is compounded by America’s overreliance on China pertaining to essential medical and pharmaceutical supplies placing the U.S. in a vulnerable position, particularly as geopolitical tensions rise and China ghosts the U.S.
Since the start of the COVID-19 pandemic, American business industry executives have recognized the need to shift some of their supply chains away from China and nearshore, reshore, onshore, or friendshore manufacturing to safeguard stability. A recent survey by Forbes and Zogby Strategies found that about half of American CEOs whose companies depend on Chinese manufacturing to produce and deliver their goods have plans to reshore operations in 2023.
April 13, 2023
U.S. Israel Education Association
In the technology industry, business software provider Capterra found that 88% of surveyed small and midsize supply chain professionals also have plans to switch at least some of their suppliers to ones closer to the US, and 45% plan to switch all of them.
This begs the question: Why is the healthcare industry so far behind in shifting its essential medical and pharmaceutical supply chains away from China?
Peter Pitts, former FDA Associate Commissioner and current President of the Center for Medicine in the Public Interest, thinks he knows the answer and has a solution to address it.
“The problem isn’t that we’re not outsourcing; the problem is that we’re outsourcing to very few places and we don't take political considerations into account enough,” Pitts said.
Pitts was recently appointed as Senior Research Fellow by the United States Israel Education Association (USIEA) – a nonprofit educating senior government leaders on the need to shift America’s essential medical and pharmaceutical supply chains away from China to friendly allies such as Israel, UAE, Bahrain, and Morocco (the Abraham Accords countries).
“USIEA is leading the education and research for Congress on why the healthcare industry should follow its industry peers to diversify and fortify its supply chains,” continued Pitts.
But unlike traditional business sectors, it is not financially sustainable for the healthcare industry to solely nearshore the production of essential medical and pharmaceutical products to the U.S.
Instead, Pitts and USIEA are working to educate bipartisan Members of Congress and beyond on the benefits of America's Medical Friendshoring Solution, which outlines the case for “friendshoring” with countries where the risk of disruption is low, and the benefits of medical and biopharmaceutical innovation are high.
“Drug shortages have wreaked havoc on our healthcare system, creating panic and, in some cases, worsening medical issues for American patients,” stated Pitts. “America cannot afford to be in denial or operate in a passive mode; we are wildly underprepared for another medical supply chain crisis. It’s unsustainable and irresponsible.”
The United States currently relies on China for active pharmaceutical ingredients (APIs), excipients (non-active ingredients), finished products, and medical devices. On the most practical level, this translates to shortages of common medicines, like penicillin, amoxicillin, and Adderall.
Tapping into the Abraham Accords countries’ manufacturing infrastructure and R&D prowess can help solve many of the world’s supply chain problems. It’s time to recognize the drug shortage issue and friendshoring opportunity at hand to prevent and avoid the next healthcare crisis.
U.S. Israel Education Association (USIEA) advances important dialogue and cooperation between bipartisan senior government leaders in the United States and Israel by filling existing information gaps and enhancing understanding of issues critical to a mutually beneficial partnership. Founded in 2011, USIEA empowers U.S. leaders with innovative initiatives on the path to Middle East peace, connects Members of Congress with direct access to West Bank visits, and educates as thought leaders in the media and through strategic global partnerships. To learn more about USIEA’s work, visit usieducation.org.