Legislative Update: June 2020

Legislative Update: June 2020

How The Coronavirus Affects Your Prescription Drug Supply

Shannon Benton, Executive Director

As the U.S. anxiously awaits the development of a vaccine for the coronavirus, worry about potential shortages of common prescription drugs is growing.  The vast majority of the active ingredients in many drugs dispensed in the U.S. are made overseas, including many from China.

China is already known as the major manufacturer of athletic shoes, toys and electronics, but it also produces much of our nation’s penicillin, antibiotics, and pain medicines, as well as protective medical masks and medical devices.  While the U.S. is a global leader in drug discovery, manufacturing has moved offshore.  Chinese companies have supplied as much as 90% of U.S. antibiotics, ibuprofen, and hydrocortisone in recent years.

Supply disruptions, like those we are experiencing now for medical facemasks, the vast majority of which are manufactured in China, could leave us dangerously short of critical medications.  According to a story by Sydney Lupkin appearing in the New York Times, as of February 26, 2020, the Food and Drug Administration was monitoring 20 products and ingredients from China that soon could become short in supply.

President Trump has urged U.S. companies to move their factories out of China, but with mixed results.  Keeping costs down has been a factor, and many companies have simply gone to other low employment cost countries like India and Mexico, rather than coming back to the U.S.  In addition, products from those other countries may still contain components from China.

Some critics of the reliance on China suggest that the U.S. needs to provide subsidies to manufacturers to enable U.S. based companies to become more competitive with China, and potentially ensure a more stable supply of drugs.  But the cost of doing so and expanding manufacturing in the U.S. would not be cheap, quick, or easy.  That would make the problem of keeping drug prices in line even more difficult than it is today.

Should U.S. taxpayers provide subsidies to big pharmaceutical companies to ensure a more stable supply of drugs?  Can that be an option in comprehensive legislation to bring down the cost of drugs, by allowing Medicare to negotiate drug prices and capping out of pocket costs?  Tell us what you think.  Take TSCL’S Survey of Senior Costs here: [insert link].


Sources:  “Coronavirus Spurs U.S. Efforts To End China’s Chokehold On Drugs,” Ana Swanson, The New York Times, March 11, 2020.