Hearings to examine made in America, focusing on restoring trust in our medicines.

2025-11-19

Summary

The meeting highlighted the critical vulnerabilities in the United States' generic drug supply chain, stemming from a dangerous over-reliance on foreign manufacturers, particularly from adversaries like China and India, for essential medicines and active pharmaceutical ingredients (APIs)[ 00:15:11 ] . Participants, including senators and industry leaders, expressed profound concern about the severe risks this poses to patient safety, public health, and national security[ 00:16:04 ]

. The discussion underscored the urgent need to re-shore pharmaceutical manufacturing to the U.S. and proposed various policy solutions to achieve this goal[ 00:16:19 ] .

Over-reliance on Foreign Generic Drug Manufacturing and its Consequences

A significant portion of prescription drug active ingredients, almost 80%, originates from foreign sources, many from adversarial nations, leading to concerns about dependability and quality[ 00:15:11 ] . This dependence results in dangerous recalls, contaminated drugs, and shortages, forcing patients and doctors to ration care[ 00:16:04 ]

. For instance, the US became entirely dependent on foreign sources for amoxicillin, the most prescribed antibiotic, after its last domestic plant ceased operations in 2020. Senator Gillibrand shared a constituent's distressing experience with generic medication shortages, highlighting the human impact of these supply chain failures. Many foreign plants reportedly operate under lax quality standards and often face inspection waivers by the FDA due to potential shortages, a leniency not extended to domestic manufacturers[ 00:14:50 ] . This issue is not new, with a heparin contamination incident from China in 2008 serving as a historical warning[ 00:46:27 ] .

Challenges to Domestic Pharmaceutical Manufacturing

Domestic manufacturers face significant hurdles, including "red tape" from the FDA that delays approvals and increases costs[ 00:17:25 ]

. Current procurement rules across government agencies, including the VA and Medicare, primarily reward the cheapest overseas bidders, often ignoring product safety or reliability[ 00:17:52 ] . Foreign manufacturers frequently benefit from substantial government subsidies, lower land and labor costs, and expedited approvals, giving them an unfair price advantage over U.S. companies[ 00:18:05 ] . The low prices of generic drugs, some selling for less than a dollar a vial, make U.S. production financially challenging without systemic changes. Additionally, the "Citrus loophole" allows foreign-made active pharmaceutical ingredients (APIs) to be labeled as "Made in America" through simple repackaging, undermining efforts to prioritize domestic production. One witness noted that their company, despite being rescued by an American investor, was excluded from federal contracts structured as small business set-asides because of its parent company's size.

Proposed Solutions and Policy Recommendations

Several concrete actions were proposed to strengthen the domestic generic drug supply chain. A key recommendation is to mandate complete country of origin labeling for all medicines and their ingredients, ensuring transparency for consumers and healthcare providers[ 00:15:56 ]

. Reforms to federal procurement rules are urged to prioritize legitimate domestic manufacturers and reward end-to-end U.S. production with long-term government contracts[ 00:18:30 ] . Furthermore, targeted grants, low-interest loans, and tax incentives are crucial to support investment in domestic pharmaceutical manufacturing and API production. Designating generic pharmaceuticals as a national security industry under a Section 232 investigation was suggested to catalyze broader reforms. Speakers also advocated for defining domestic manufacturing to exclude mere repackaging of foreign products and establishing a Strategic National Stockpile procurement preference for genuine domestic manufacturers. There was also a call for a comprehensive, long-term plan with a centralized authority to coordinate drug shortage activities across federal agencies.

Cybersecurity as a Supply Chain Vulnerability

The pharmaceutical supply chain is increasingly vulnerable to cyberattacks, which can disrupt drug availability and impact national security[ 01:09:02 ]

. Witnesses stressed the importance of integrating robust cybersecurity measures from the outset when building new manufacturing infrastructure. Companies like Flow Corp have partnered with federal agencies such as the FBI, Homeland Security, and CISA to test and strengthen their systems, acknowledging the significant and growing threat from geopolitical conflicts. It was noted that companies cutting corners on manufacturing quality might also neglect cybersecurity, posing an additional risk[ 01:10:31 ] .

Tone of the Meeting

The meeting's tone was marked by a sense of urgency and strong concern regarding the current state of the generic drug supply chain[ 00:16:12 ]

. Speakers expressed significant frustration over the over-reliance on foreign adversaries and the systemic issues that prioritize low cost over quality and national security[ 00:15:14 ] . Despite the gravity of the problems, a hopeful and determined resolve to implement solutions, particularly through bipartisan legislative efforts and industry innovation, was evident throughout the discussions. The witnesses offered practical, actionable recommendations, underscoring a shared commitment to rebuilding a secure and resilient domestic pharmaceutical manufacturing base.

Participants

Transcript

Rick Scott

Generic drugs are a lifeline for millions of Americans and are a market miracle that allows for accessible treatments. That is why it's so important that we have transparency into their supply chains and full confidence in their production. As we know from the FDA's own people, they have allowed importation of drugs from facilities that are non-compliant simply because of the potential for shortage, which we should be making these drugs here in this country in the first place. In our previous two hearings on this topic, witnesses have highlighted the ways that we can bring back domestic production in an affordable, market-driven way. Today, nearly 80 percent of the active ingredients in our prescription drugs come from foreign sources. That's foolish. That means we depend on our adversaries for the very medicines our families and seniors need to survive. It's not England. It's not Germany. It's not Japan. It's our adversaries. Consumers, pharmacies, and big buyers like hospitals don't even know the full extent of where those drugs are made or what's happening inside the plants that make them because we don't have country of origin labeling requirements. We've seen the results of that dependence, contaminated drugs, dangerous recalls, and shortages that force doctors and patients to ration care. It is unacceptable that the most advanced country in the world can't ensure a steady, safe supply of basic medicines for its own citizens. The solution for this is very simple. We must make drugs in America again. The health and safety of Americans is too important to leave in the hands of other nations, especially our adversaries like communist China. When we manufacture here at home, we can control quality, strengthen oversight, and protect patients. We also get the benefit of creating good-paying jobs and growing our economy. Today's witnesses are proof that American manufacturing works. These companies show that it's possible and profitable to make safe, affordable medicines in the U.S. However, they also face challenges that Washington has helped create.

Rick Scott

Red tape at the FDA delays approvals and drives up costs, something I and many of our colleagues are interested in fixing. By the way, I want to thank the ranking member, Gillibrand, because she has been a complete partner in the report we put out and these hearings to make sure we get change. The current procurement rules for government agencies, large purchasers of generic drugs reward the cheapest overseas bidder rather than the safest or the most reliable product to the detriment of American manufacturing. The difference in cost is often negligible, and foreign governments manipulate their pricing to undercut American manufacturers. The result, a broken system that leaves our patients vulnerable and our businesses at a disadvantage. The federal government should lead by example. The VA, Medicare, and our military health programs should prioritize American-made medicines. Unfortunately, they don't. Taxpayer dollars should support our American workers, not fund companies in China with ties to forced labor and that don't meet our safety standards. This isn't just an economic issue. It's a matter of national security. Americans should never have to wonder whether their blood pressure medication, their insulin, or antibiotic was made safely. We can do better. We must do better. Together, we can build a stronger, safer, more self-reliant medicine system here in America. And now I'd like to recognize Ranking Member Gillibrand for her opening statement. And again, I want to thank her for being a complete partner in getting this report out and these hearings.

Kirsten E. Gillibrand

Thank you, Mr. Chairman. Thanks for calling the hearing, and thank you to our witnesses for testifying today. We're very grateful for your contribution. I look forward to continuing our conversation about how we can improve the quality and reliability of our generic drug supply. This is an essential issue for our committee to examine as many aging Americans, including over 53 million Medicare Part D enrollees, rely on at least one generic drug to treat a wide range of medical conditions. Unfortunately, the supply chain for these crucial drugs remains vulnerable to disruption, and we consistently witness issues with the quality of foreign drug products causing key medicines to go into shortage. It's unacceptable. Every American should have access to safe and affordable generic drugs. Particularly as older adults navigate the complex, difficult health conditions that they face, they shouldn't have to cope with worsening symptoms, skipping doses, or trying to stretch medicines further because they can't afford them. This is an existential issue for a lot of older Americans and for New Yorkers.

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