⚡️ NIMITZ HEALTH NEWS FLASH ⚡️ 

“Made in America: Strengthening Domestic Manufacturing and the Health Care Supply Chain”

House Energy & Commerce Subcommittee on Health

June 11th, 2025 (recording linked here)

WITNESS & TESTIMONY

• Mr. Patrick Cashman: President, USAntibiotics

• Dr. Ronald T. Piervincenzi, PhD: Chief Executive Officer, United States

  Pharmacopeia

• Mr. Josh Bolin: Associate Executive Director, Government Affairs and

  Innovation, National Association of Boards of Pharmacy

• Ms. Dawn O’Connell: Former Assistant Secretary for Preparedness and

  Response

• Mr. John Murphy, III: President and Chief Executive Officer, Association for

  Accessible Medicines

HEARING HIGHLIGHTS

MEMBER OPENING STATEMENTS

• Subcommittee Chair Carter warned of the national security risks from U.S. dependence on foreign, especially Chinese, sources for critical medicines, noting domestic production fell from 72% in 2002 to 37.5% in 2023. He cited how China withheld medical supplies during COVID-19 and described current drug shortages, particularly for cancer patients. Carter praised recent manufacturing investments under President Trump’s administration and called for eliminating regulatory barriers, incentivizing domestic production, and replicating pro-growth state policies at the federal level. He emphasized the need to treat pharmaceutical independence like energy independence to protect American lives and sovereignty.

• Subcommittee Ranking Member DeGette agreed on the threat from China but criticized the administration for undermining staff supporting domestic manufacturing. She stressed that COVID-19 exposed long-standing supply chain weaknesses and called for bipartisan action, including the Drug Origin Transparency Act and Pandemic and All-Hazards Preparedness Act reauthorization. DeGette warned that Republican Medicaid cuts would financially strain hospitals, limiting their ability to prioritize U.S.-made products. She urged a comprehensive approach that balances supply chain reforms with sustaining healthcare access and hospital stability.

• Full Committee Chair Guthrie highlighted complex factors behind foreign reliance, including cost, workforce, and regulations, while noting that India and China dominate API and drug manufacturing. He cited significant private investment growth in U.S. biopharmaceutical manufacturing but warned vulnerabilities persist. Guthrie emphasized the importance of hearing expert testimony to explore solutions for reducing foreign dependence and improving national security. He noted that nearly half of global novel drug approvals over the past decade involved U.S. companies, demonstrating domestic innovation leadership.

• Full Committee Ranking Member Pallone condemned recent Trump administration actions that weakened public health infrastructure, including firing vaccine advisors and cutting NIH and FDA staff. He argued that FDA cuts undermined drug safety and inspections, directly conflicting with efforts to strengthen the supply chain. Pallone criticized proposed Medicaid cuts for increasing hospitals' uncompensated care, reducing their ability to support domestic procurement. He called for increased FDA funding and bipartisan work on previously proposed legislation to improve transparency and supply chain resilience.

WITNESS OPENING STATEMENTS

• Mr. Cashman explained how US Antibiotics, the last U.S. amoxicillin manufacturer, was revived after foreign competition bankrupted its previous owner. He stressed the critical national security role of antibiotics and noted their facility now holds just 5% market share. Cashman cited challenges such as unfair foreign competition, lack of long-term government contracts, and insufficient recognition of antibiotics as strategic assets. He recommended multi-year purchasing agreements, Buy American policies, strategic manufacturing funds, and stronger trade enforcement to support domestic production.

• Mr. Murphy highlighted that generics and biosimilars fill 90% of prescriptions but face stagnant revenues and shrinking domestic production. He identified challenges including lack of a national strategy, low reimbursement, labor shortages, and regulatory delays. Murphy proposed government purchase contracts, expanded stockpiles, relocation grants, tax incentives, streamlined FDA processes, and patent and PBM reforms. He stressed that with timely policy action, existing U.S. manufacturing capacity could rapidly be restored, improving security and access.

• Dr. Piervincenzi described USP’s mapping of global drug supply chains, showing over 80% of key ingredients are made abroad, often concentrated in few locations. He identified 100 vulnerable medicines at high risk for shortages. Piervincenzi recommended identifying at-risk drugs, supporting innovative U.S. manufacturing technologies, creating resilience benchmarks, and expanding supply chain visibility. He emphasized that fragile supply chains threaten patient care and national security but can be stabilized with targeted policies.

• Ms. O'Connell recounted how pandemic shortages drove federal investments in domestic PPE and pharmaceutical manufacturing. She detailed how ASPR stockpiled emergency supplies and expanded U.S. production but faced ongoing challenges as demand waned. O'Connell called for a comprehensive supply chain framework defining essential products, sustaining peacetime markets, and incentivizing domestic manufacturing.

• Mr. Bolin explained how NABP’s Pulse platform helps track drugs and identify counterfeit products, successfully flagging illegal GLP-1 medications. He warned that 96% of online pharmacies operate illegally, exploiting consumer trust, and described unsafe compounding practices in unregulated med spas. Bolin called for stronger enforcement against bad actors while supporting legitimate pharmacy compounding. He emphasized that while DSCSA provides essential tools, threats remain that require vigilance and regulatory authority.

QUESTION AND ANSWER SUMMARY

• Chair Carter emphasized China’s dominant role in amoxicillin production, raising concerns about quality and national security. Mr. Cashman confirmed that China controlled much of the global API market and that foreign generics carried greater risks of contamination and adverse effects.

  Chair Carter explored how quickly domestic manufacturing could scale, with Mr. Cashman estimating significant expansion within 18-24 months given proper policies. They agreed that while friend-shoring may help, many allies lack sufficient manufacturing capacity to fully replace China.

• Ranking Member DeGette questioned about USP’s drug shortage report, which cited low prices, quality issues, geographic concentration, and manufacturing complexity as key vulnerabilities. Dr. Piervincenzi stressed that deregulating inspections would undermine drug quality and resilience.

  Ranking Member DeGette then highlighted the value of mRNA vaccine platforms for rapid pandemic response and criticizing the administration’s cancellation of Moderna contracts. Ms. O’Connell emphasized mRNA’s unmatched speed and affirmed its safety and extensive regulatory review.

• Rep. Guthrie focused on how tax incentives under HR 1 could stimulate domestic production. Mr. Cashman and Mr. Murphy both confirmed that tax credits for capital investments and R&D would help restart dormant U.S. capacity, though broader price reforms are needed to sustain manufacturing. Dr. Piervincenzi noted that advanced manufacturing technologies could further reduce reliance on foreign sources, especially for APIs, but are underutilized in generics where shortages are most acute.

• Rep. Pallone warned that cuts to public health staffing and hospital preparedness undermine the capacity to manage complex supply chains. Ms. O’Connell agreed that skilled federal staff are essential for effective investment decisions. She defended the Hospital Preparedness Program as the only federal funding stream that helps hospitals prepare for emergencies, citing successful responses to events like Lassa fever containment and COVID-19.

• Rep. Dunn criticized federal procurement for prioritizing low cost over domestic sourcing, despite national security risks. Mr. Cashman confirmed that price dominates federal contract decisions and argued for broader consideration of U.S. manufacturing in award criteria.

  Rep. Dunn also faulted ASPR for delays in supporting domestic suppliers like US Antibiotics, which he believed weakened supply chain resilience.

• Rep. Ruiz, drawing from his emergency medicine experience, stressed that drug shortages directly threaten patient care and safety. He warned that geographic concentration of production, as seen with Baxter’s hurricane-damaged IV fluid plant, creates major vulnerabilities. Ms. O’Connell agreed and advocated for regionally diversified investments.

  Rep. Ruiz also criticized efforts to weaken FDA inspections, with Mr. Murphy affirming that strong FDA oversight is essential to ensure drug quality and marketplace stability.

• Rep. Griffith raised concerns about stalled domestic PPE manufacturing projects due to rigid contracting structures. Ms. O’Connell explained that existing DOD contracts prevented adding funds to complete the projects.

  Rep. Griffith praised public-private efforts like PHLOW’s domestic API production, but exposed inconsistencies in SNS contract awards. Mr. Cashman confirmed that some awardees imported Chinese APIs while US Antibiotics relied on European sources.

• Rep. Kelly warned that Trump-era FDA cuts undermine innovation and weaken public health infrastructure critical for reshoring drug manufacturing. Ms. O’Connell stressed that reduced research funding limits both stockpiling and development of advanced manufacturing.

  Rep. Kelly cited concerns over unsafe compounded GLP-1 products from unregulated foreign sources, which Ms. O'Connell said highlight the dangers of reduced FDA oversight.

  Rep. Kelly also criticized the termination of genomic surveillance contracts that weakened pandemic preparedness.

• Rep. Bilirakis emphasized the national security risks of foreign drug dependence and asked what market shifts were needed. Dr. Piervincenzi recommended creating purchasing incentives based on quality, supply chain diversity, and resilience, backed by robust data benchmarks.

  Rep. Bilirakis also proposed a national security assessment of API sourcing, which Dr. Piervincenzi strongly supported, noting USP’s near-complete global mapping of API and key starting material sources.

• Rep. Schrier condemned RFK Jr.’s removal of ACIP members and warned this could destabilize vaccine manufacturing and preparedness. She stressed the role of vaccines in preventing infections and reducing reliance on antibiotics. Ms. O’Connell confirmed that decades of NIH and BARDA investments enabled rapid COVID vaccine development.

  Rep. Schrier also asked about repurposing dormant manufacturing sites; Dr. Piervincenzi said it’s feasible within specific drug types but limited across categories.

• Rep. Joyce focused on the Medicaid generic inflation penalty driving manufacturers out of low-margin markets. Mr. Murphy explained this distorts pricing, leading to shortages, and called for PBM reform, regulatory streamlining, and generic prioritization post-patent.

  Rep. Joyce also highlighted that new U.S. manufacturing plants take 5–7 years and hundreds of millions to build, underscoring the need to ease regulatory burdens.

• Rep. Dingell emphasized that FDA workforce cuts delay generic approvals, drive up costs, and contribute to drug shortages. Mr. Murphy noted FDA staffing shortfalls have already slowed key product-specific guidance issuance, delaying generics and increasing patient costs.

  Rep. Dingell raised real-world shortages affecting patients and called for structural reforms to stabilize the generic market.

• Rep. Balderson asked about DSCSA implementation progress. Mr. Bolin said most manufacturers and distributors are compliant, but smaller pharmacies may delay full compliance, risking counterfeit infiltration.

  Rep. Balderson also asked about expanding U.S. API production; Dr. Piervincenzi said building new API capacity requires major investments but near-term supply chain diversification and advanced manufacturing offer interim solutions.

• Rep. Veasey criticized tariffs on drug components and manufacturing equipment, warning they raise costs without concurrent domestic investment. Ms. O’Connell agreed tariffs should be paired with domestic manufacturing incentives to ensure access.

  Rep. Veasey also asked about stockpiling; Mr. Murphy endorsed national and state stockpiles as tools to stabilize markets while broader pricing reforms are implemented.

• Rep. Harshbarger, a pharmacist, defended the value of legitimate compounding and submitted an article to clarify misinformation equating compounded drugs with counterfeits. She questioned on whether prioritizing U.S.-made purchases would raise costs. Mr. Cashman said any slight price premium offsets massive costs from shortages and emphasized long-term contracts would enable scale-up. He noted US Antibiotics could serve 100% of U.S. demand but is limited by lack of stable government contracts. Cashman also clarified that procurement rules (small business set-asides) prevented their participation in certain federal contracts.

• Rep. Fletcher criticized Trump-era FDA staff cuts that stalled generic drug approvals. She noted 10,000 HHS staff, including 3,500 at FDA, were laid off, leading to policy paralysis and delays in issuing product-specific guidance. Mr. Murphy confirmed the resulting backlog slowed generic development, though rehiring had recently begun.

  Rep. Fletcher highlighted the harmful supply chain consequences of this instability and flagged additional concerns over tariffs affecting pharmacies.

• Rep. Miller-Meeks warned that IRA price controls discourage R&D, especially for orphan drugs and small molecules. Dr. Piervincenzi said branded drug manufacturing is healthier than generics but stressed generics need policy support due to razor-thin margins. He noted that most key starting materials (KSMs) for APIs still come from China, while solid oral doses are largely imported from India.

• Rep. Ocasio-Cortez highlighted the liquid albuterol shortage, especially devastating for her asthma-prone district. Ms. O’Connell attributed this to fragile generic markets and manufacturer bankruptcy.

  Rep. Ocasio-Cortez framed the issue as a market failure caused by low prices driving producers out. She discussed past federal Defense Production Act (DPA) interventions and asked if government production is feasible. Ms. O’Connell said public-private partnerships remain the most sustainable model given the lack of long-term federal funding.

• Rep. James emphasized national security threats posed by China's control over KSMs. He proposed studying Great Lakes ports as alternative pharmaceutical entry hubs. Dr. Piervincenzi agreed this supply chain diversification warrants further analysis and data collection. Mr. Cashman said alternative port routes could enhance resilience.

• Rep. Auchincloss focused on biosimilar adoption barriers, noting PBMs’ rebate practices distort biosimilar uptake despite lower prices. Mr. Murphy explained PBMs prefer large-brand rebates, slowing biosimilar competition.

  Rep. Auchincloss floated demand-side solutions like group purchasing by hospitals and raised concerns that PBMs producing their own biosimilars may suppress independent biosimilar innovation.

• Rep. Bentz explored price versus security trade-offs. Mr. Cashman stressed that competing with subsidized foreign producers puts U.S. firms at a disadvantage unless long-term stability is guaranteed. Dr. Piervincenzi explained that U.S. dependency stems from decades-long outsourcing of chemical industries, making key starting material manufacturing virtually absent domestically.

• Rep. Landsman criticized the elimination of HHS’ Supply Chain Resilience Coordinator, a position designed to unify federal supply chain responses. Mr. O’Connell underscored the coordinator’s importance in cross-agency collaboration and urged its reinstatement.

• Rep. Crenshaw linked drug manufacturing to national security and cited local educational investments in biomanufacturing workforce development. He suggested pharmaceutical manufacturing be granted permitting streamlining similar to the CHIPS Act. Mr. Murphy supported targeted permitting reform. Dr. Piervincenzi confirmed USP is nearing full mapping of U.S. pharmaceutical supply chains to enable risk mitigation.

• Rep. Carter (of Louisiana) praised local PPE manufacturing partnerships like SafeSource Direct. Ms. O’Connell said securing stable purchasers like Ochsner Health was key to SafeSource’s viability. Mr. Murphy emphasized FDA workforce cuts threatened both inspections and timely generic approvals, calling for stable FDA funding.

• Rep. Kean raised concerns over unregulated API sourcing feeding into dangerous compounding operations, especially GLP-1 drugs. Mr. Bolin described unlicensed med spas bypassing regulators entirely. Mr. Cashman emphasized that price differentials between U.S. and foreign generic production are narrowing, but long-term contracts remain key to stability.

• Rep. Cammack proposed solutions: long-term federal contracts, fast-track domestic approvals, full supply chain reshoring including KSMs, and deeper U.S.–ally cooperation. Mr. Bolin urged Congress to leverage Pulse platform capabilities for real-time transparency, calling for stronger cross-sector communication to detect and prevent counterfeits before they reach patients.

• Rep. Obernolte questioned why purchasers don’t naturally seek U.S. long-term contracts despite past shortages. Mr. Cashman noted price-focused procurement still dominates. Dr. Piervincenzi explained advanced manufacturing can make U.S. production competitive by reducing labor and environmental costs. Mr. Murphy identified workforce shortages as a major constraint, urging investment in STEM and skilled trade education.