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Critical Supply Chains and the FDA

March 6, 2021

FDA has a portfolio of responsibilities that relate to our nation’s supply chain for food and medical products, as well as OTC, cosmetics, and dietary supplements. Some of that work focuses on quality and security, other parts on intentional and unintentional adulteration. Addressing drug shortages is yet another way FDA is involved because the supply chain is often a critical part of the problem. FDA was also given monies in FY 19 to encourage innovative advanced manufacturing, part of which was justified by how such approaches could be used to shorten supply chains and encourage more manufacturing in the US.

The pandemic has underscored the degree to which the United States is dependent on foreign manufacturers and suppliers and the resulting vulnerability (real and potential). To address this, President Biden issued an Executive Order (EO) (here and an accompanying fact sheet here) on February 24 that focuses on critical supply chains in four areas: Active Pharmaceutical Ingredients (API); critical minerals (such as rare earth and carbon fiber); semiconductors and advanced packaging; and large capacity electric batteries. Those four areas will be subject to a 100-day review across federal agencies to address vulnerabilities in the supply chain.

Another set of key supply chains will undergo a one-year review. These are: the defense industrial base; the public health and biological preparedness industrial base; the information and communications technology (ICT) industrial base; the energy sector industrial base; the transportation industrial base; and supply chains for agricultural commodities and food production.

The EO identifies a set of risks that should be considered in their assessment of supply chain vulnerabilities including identifying critical goods and materials within supply chains, manufacturing or other capabilities needed to produce those materials, as well as a variety of vulnerabilities created by failure to develop domestic capabilities. As part of the assessment, lead agencies will identify locations of key manufacturing and production assets, the availability of substitutes or alternative sources for critical goods, the state of workforce skills and identified gaps for all sectors, and the role of transportation systems in supporting supply chains and industrial bases.

The reports emerging from these efforts should contain specific policy recommendations to address risks, as well as proposals for new research and development activities. These efforts will be reviewed on at least a quadrennial basis in order to assure a sustained government commitment to supply chain resiliency. The EO envisions widespread consultation with external stakeholders.

Based on this description of the effort, FDA can be expected to have an unexpectedly large role as the EO is implemented. FDA oversees goods and services that represent more than 20% of all consumer spending — an often underappreciated statistic that points to the agency’s role in multiple critical supply chains. Much of the work that will be required will be new and FDA will need the personnel, expertise, and budget to contribute fully to strengthening and adding resilience to critical supply chains.

When the Alliance talks about why FDA’s budget needs to grow every year, we talk about the responsibilities added by legislation, regulation, and EOs, the impact of ever-more complex science in both medical products and food, and the expansion of the global marketplace in products the agency oversees. Strengthening critical supply chains reflect all three of these pathways. To protect Americans in the future, FDA’s mandates will continue to grow.

Editorial Note: The Analysis and Commentary section is written by Steven Grossman, Executive Director of the Alliance for a Stronger FDA.

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