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Washington, D.C. — U.S. Senator Marco Rubio (R-FL) secured a pharmaceutical supply chain report (Sec. 713) in the National Defense Authorization Act (NDAA) for Fiscal Year 2021 (H.R. 6395) conference report that requires the Secretary of Defense to conduct an industrial capacity vulnerability study of the Department of Defense’s (DoD) dependence on foreign-made pharmaceuticals. The provision was maintained in the final conference report after having passed the Senate unanimously. The Senate’s action sends the final conference report to the President.
This language mirrors Rubio’s bipartisan and bicameral Strengthening America’s Supply Chain and National Security Act (S. 3538), which seeks to combat America’s supply chain risk and dependence on China for pharmaceuticals. This bill would also require drugmakers to provide the Food and Drug Administration (FDA) with information to determine the volume of APIs used in pharmaceuticals — a provision that was enacted earlier this year in the CARES Act.
Rubio’s provision builds upon the bipartisan legislation he introduced earlier this year that would for the first time provide data and study the effects of America’s overreliance on foreign countries and foreign direct investment in our domestic pharmaceutical supply chain.
“Nearly two years ago, I warned that our nation has critical vulnerabilities and supply chain risks in pharmaceuticals and other key sectors of our economy as a result of decades of lost industrial capacity to China,” Rubio said. “That vulnerability includes the DoD’s dependence on China for pharmaceuticals, and I was proud to secure this critical provision in the FY21 NDAA conference report to ensure that the DoD has the necessary information to assess and ultimately reduce our overreliance on China for pharmaceuticals and medical countermeasures. The coronavirus pandemic has made it painfully clear that we must take decisive action to rebuild our nation’s medical manufacturing sector.”
In August, Rubio introduced the Medical Manufacturing, Economic Development, and Sustainability (MMEDS) Act of 2020 (S.4467), bipartisan legislation which encourages companies currently producing medical and pharmaceutical equipment abroad to relocate to the U.S. The bill would also enact a tax credit of federal income tax liability for wages and eligible pharmaceutical manufacturing facilities in economically distressed zones, including Puerto Rico.
In March, Rubio and Warren introduced bipartisan legislation to combat America’s supply chain risk and dependence on China for pharmaceuticals that builds off the plan he released. More than a year ago, Rubio issued a report detailing critical vulnerabilities in America’s medical supply chain, warning, “the U.S. runs the risk of losing important components of its medical supply chain to China’s government-backed industry.” Last year, Rubio warned in Modern Healthcare that when it comes to the threat China poses to the U.S. healthcare industry, we cannot afford to be complacent.
The United States relies heavily on foreign nations for its supply of drugs and pharmaceutical products. Today, experts estimate up to 80% of the active pharmaceutical ingredients (APIs), the requisite component of drugs, are imported from abroad. This overreliance leaves our supply chain of critical drugs used by millions of Americans vulnerable to disruption — whether by accident or by design.