⚡️ NIMITZ HEALTH NEWS FLASH ⚡️ 

“Truth in Labeling: Americans Deserve to Know Where Their Drugs Come From”

Senate Aging Committee

January 29th, 2026 (recording linked here)

WITNESS

• John Gray, Ph.D.: Dean’s Distinguished Professor of Operations, Fisher College of Business, The Ohio State University

• Michael Ganio, Pharm.D.: Senior Director, Pharmacy Practice and Quality, ASHP

• Stephen W. Schondelmeyer, Pharm.D., Ph.D.: Professor of Pharmaceutical Management & Economics, College of Pharmacy, University of Minnesota

• Stephen Colvill: Assistant Research Director, Duke-Margolis Institute for Health Policy

HEARING HIGHLIGHTS

MEMBER OPENING STATEMENTS

• Sen. Scott (R-FL) stated that the committee’s prior work had exposed serious public health and national security risks from U.S. dependence on China and India for generic drugs and active pharmaceutical ingredients. He argued that limited and often pre-announced foreign inspections, combined with alarming accounts of unsanitary conditions, showed that Americans could not reliably trust the safety of many generics. He framed the issue as both a safety problem and a vulnerability that adversarial governments could exploit by restricting exports. He said he was introducing the Clear Labels Act to require country-of-origin and manufacturer information on labels or through a searchable portal so patients and clinicians could make informed choices and so market pressure would encourage more domestic production.

WITNESS OPENING STATEMENTS

• Dr. Gray said he strongly supported providing drug-level transparency, including country of origin and a valid assessment of quality risk, to allow competition on quality rather than price alone. He argued that the long-standing assumption that all generics are fully interchangeable was no longer defensible because evidence suggested meaningful quality variation, and he said offshore production and pre-announced inspections made compliance harder to verify. He recommended adding a QR code on packaging that linked to a searchable site showing manufacturing locations for both finished dosage and APIs along with a drug-level quality score, while cautioning that scores should be designed to avoid discouraging necessary medication use. He added that transparency should be paired with stronger inspections, more testing, accountability mechanisms for imports, and purchasing policies that reward quality and reliability.

• Dr. Ganio said ASHP supported transparency and country-of-origin labeling because Americans had a right to know where prescription drugs were manufactured and because disclosure could shift incentives away from price-only purchasing. He emphasized, however, that country of origin alone was not a reliable proxy for quality and that patients often never see labeling in real-world settings, particularly in hospitals and clinics, where “choice” can be illusory. He described chronic shortages and quality concerns as symptoms of a fragile generic-drug market driven by thin margins and price erosion that discourage investment in resiliency and quality management. He urged the committee to pair labeling with policies that directly incentivize domestic manufacturing, improve oversight and inspections, support long-term purchasing commitments, and diversify the manufacturing base.

• Dr. Schondelmeyer argued that drug shortages and supply instability were driven not only by quality and market economics, but also by geopolitical risk highlighted during COVID-19 when countries restricted exports. He said the U.S. was dangerously dependent on foreign sources, particularly India and China, and urged shifting from a “find and fix” approach to a “predict and prevent” approach to shortages. He called country-of-origin labeling a foundational tool and said labels should clearly disclose both where the finished dosage form and the active ingredient were manufactured, rather than merely where products were marketed or packaged. He contended that confidentiality claims often impeded transparency, pointed to New Zealand as an example of workable public disclosure, and recommended mandating origin transparency and using it to build a broader supply map that supports national planning and enforcement.

• Mr. Colville said the drug supply chain faced distinct but overlapping problems, including chronic shortages, quality assurance concerns, geopolitical security risks, and economic goals tied to domestic manufacturing. He argued that shortages among inexpensive generic sterile injectables were exacerbated by provider payment incentives that reward low-cost purchasing without adequately valuing reliable availability, and he urged a Medicare-focused incentive approach to promote committed contracting and reliability benchmarks. He supported making better supplier information available but warned that labeling alone would likely have limited impact because patients have little influence over what is stocked and domestic production does not automatically prevent shortages. He recommended prioritizing reliability benchmarking pilots supported by federal funding and suggested that digital labeling include unique facility identifier numbers for the original API and finished-product manufacturers.

QUESTION AND ANSWER SUMMARY

• Sen. Johnson (R-WI) compared pharmaceutical traceability to medical-device packaging GMPs and pressed witnesses on whether FDA-required traceability extended beyond APIs to key starting materials and precursor chemicals. Dr. Gray said manufacturers generally had lot traceability within facilities and likely for APIs, but he was unsure it extended to precursor chemicals, while Dr. Schondelmeyer and Dr. Ganio said key starting material traceability was not required and argued that mapping upstream sources mattered most for revealing national-security vulnerabilities and supply concentration.

  Sen. Johnson raised the 2008 heparin contamination case, and Dr. Ganio said the United States Pharmacopeia had revised the heparin monograph to detect the contaminant and that compliant testing and recordkeeping should reduce recurrence.

  Sen. Johnson then asked why U.S. generics were cheaper than peer countries and whether stronger quality, testing, and transparency rules would materially raise prices, and witnesses emphasized that the U.S. market over-weighted low price versus reliability and quality, that purchasers would likely pay modest premiums for higher-assurance supply, and that shortages already imposed major system costs, including substantial labor burdens cited in a Vizient estimate.

• Sen. Gillibrand (D-NY) focused first on making labeling terminology precise and usable, and witnesses recommended plain language such as “made by” or “product of,” explicitly distinguishing finished-dosage manufacturing from API manufacturing. Mr. Colville urged pairing any physical label requirement with robust digital labeling because packaging had limited space, and they argued that including unique facility identifiers and publishing them through sources like DailyMed would enable third parties to build user-friendly lookup tools.

  Sen. Gillibrand then asked how Congress should harmonize FDA and CBP requirements to avoid duplicative reporting while giving consumers clear origin information, and witnesses said FDA needed clearer statutory authority to disclose manufacturing-location data and that policymakers should unify definitions and rules so “made by” was not confused with “made for,” while limiting overuse of confidentiality claims that blocked disclosure.

• Sen. Moody (R-FL) underscored that foreign import alerts frequently cited serious quality failures and argued that seniors and families lacked practical ways to identify where medicines were made, which she framed as both a consumer-choice and adversary-leverage problem.

  Sen. Moody asked what elements of New Zealand’s Medsafe model were most important for U.S. transparency, and Dr. Schondelmeyer described a comprehensive, product-level database that publicly listed the API source, inactive ingredients, finished-dosage manufacturer, packager, and labeler.

  Sen. Moody asked whether New Zealand’s approach appeared to reduce contaminated drugs, and Dr. Schondelmeyer said he believed transparency helped without creating major commercial harms, while cautioning that he had not seen definitive studies tying it directly to shortage or contamination rates.

• Sen. Scott asked whether generics and brand-name drugs were “the exact same drug,” and witnesses said the active molecule was typically the same but manufacturing processes, excipients, and allowable bioavailability ranges could differ, with concerns centered on post-approval manufacturing quality and oversight rather than basic equivalency standards.

  Sen. Scott asked whether pharmacists typically knew where APIs were made, and Dr. Ganio said they generally did not and patients rarely asked, while Dr. Gray noted even direct inquiries often produced blank looks.

  Sen. Scott then asked why supply chain mapping mattered beyond country-of-origin labeling, and Mr. Colville said mapping identified concentration risks and single points of failure that could be disrupted by geopolitical conflict, disasters, or trade actions.

  Sen. Scott asked whether labeling would spur U.S. manufacturing, and Dr. Schondelmeyer said it could support domestic and nearshore investment but would need to overcome cost and scale advantages abroad, potentially aided by advanced manufacturing and renewed capacity in places like Puerto Rico.

• Sen. Gillibrand returned to national security and oversight, asking for detailed risks and an explanation how buffer inventory and better transparency could reduce vulnerability in scenarios like escalating trade conflict or a Taiwan contingency. Dr. Ganio said transparency was a prerequisite for action because it revealed choke points and heavy dependence on China and India for key starting materials and APIs, while also arguing for geographically diversified sourcing so U.S.-based disruptions did not become single points of failure. On inspection disparities, Dr. Gray emphasized the difference between domestic accountability and limits on prosecuting overseas actors, and he cited evidence from unannounced inspection efforts suggesting materially higher rates of findings compared to pre-announced visits. Dr. Schondelmeyer added that India’s regulatory structure varied by state and that India’s non-participation in international harmonization efforts created uneven quality signaling, while Mr. Colville argued for resourcing FDA foreign inspections and supplementing location data with reliability benchmarking and independent quality testing.