President Donald Trump signed an executive order Thursday that directs the federal government to purchase “essential drugs” and medical supplies from American manufacturers.
White House trade adviser Peter Navarro said the order reflected a desire to gain national control over essential medical goods, adding that the pandemic showed the United States was “dangerously over-dependent” on other countries for drugs and medical supplies.
The order could produce a serious shakeup in the drug industry, according to STAT’s Nicholas Florko. “No one knows exactly how much of the American drug supply chain is produced abroad, but some experts insist up to 90% of critical generic drugs are made at least partially abroad,” Florko said.
But there is still much that is unknown about how the order will play out. The White House is not defining the specific drugs that must be made in the U.S., leaving that for the Food and Drug Administration to determine later. And, as Politico’s David Lim wrote, the order “appears to allow for broad exemptions based on cost, availability and ‘public interest.’”
The drug industry and some business groups oppose the approach, warning earlier this year that ‘buy American’ means higher prices for U.S. consumers. But the order includes some provisions that would benefit the pharmaceutical industry, including streamlining the drug approval process and an easing of environmental regulations that affect drug manufacturing.
The order is the latest in a series aimed at influencing the pharmaceutical industry. Last month, Trump signed four executive orders that aim to reduce drug prices. Like Thursday’s order, however, the effect of those actions is unclear. Salon reported Wednesday that pharmaceutical executives have dismissed the efforts, saying they will have little influence on the market. On an earnings call last week, Sanofi CEO Paul Hudson reportedly said the efforts were just a "lot of talk" that won't have any real effect on drug prices this year.