Pharmaceuticals & Vaccines

Public Health Supply Chain and Industrial Base 
One-Year Report​

Pharmaceuticals and vaccines play key roles in protecting the U.S. public’s health. Disruptions to the pharmaceutical and vaccine supply chains can affect the​​ United States’ ability to reduce morbidity and mortality during public health emergencies by reducing access to critical drugs needed to treat patients and preventing effective partnerships with the private sector to develop and distribute vaccines. The United States must develop and implement strategies to mitigate risks and vulnerabilities in these supply chains and strengthen domestic manufacturing capabilities to ensure patients have access to lifesaving treatments, especially during public health emergencies.

Current Overview

A robust pharmaceutical supply chain should include

• the capability to domestically manufacture certain high-quality products for U.S. consumption;
• diversification of the drug supply chain;
• redundancy of the supply chain (e.g., having multiple manufacturers for each product and its precursors).^xxi​

At present, the U.S. Government has limited visibility into the supply chain for most pharmaceuticals. Locations of API manufacturers for FDA-approved or authorized prescription drugs are better known than those for over-the-counter products. Information about the volume of pharmaceuticals and APIs manufactured is hard to come by because not all approved sites are continuously active. Therefore, data is not collected in a way that clearly describes current end-to-end production.

Key Starting Materials (KSM): The U.S. Government has relatively limited information about KSM supply chains. Little KSM manufacturing takes place in the United States; in addition to wage differences, certain foreign suppliers are not subject to the same environmental and public health protections as manufacturers in the United States and can produce KSM at lower costs than U.S.-based manufacturers. Overall, insufficient data are available to the U.S. Government, due to confidentiality practices among API manufacturers and KSM suppliers, so it is difficult to properly understand and assess supply chain vulnerabilities.

Finished Dosage Form (FDF): Some FDF manufacturing occurs in the United States. HHS expanded industrial base capacities for many drugs facing bulk production and fill-finish bottlenecks by examining the market influences across pharmaceutical supply chains and initiating direct investments in platform technologies and additional fill-finish capacity. HHS established on-demand manufacturing capabilities for API and fixed-dose formulation drugs.

Therapeutic Development: During the COVID-19 response, new therapeutic development focused in part on mAb therapeutics. These require some of the same resources—such as glass vials—as vaccines to produce. Although there are currently no problems producing mAbs themselves, production is limited because of the difficulty in acquiring the glass vials required to deliver and administer these therapeutics to patients. This results in mAb shortages for the public.

In addition to mAbs, there are several other COVID-19 treatments being studied, including

• 50+ antivirals;
• 60+ cell and gene therapies;
• 130+ immunomodulators;
• 60+ neutralizing antibodies;
• 110+ other single agent treatments;
• 40+ combination agent treatments.

Vaccines: Although not unique to vaccines, building capacity to manufacture biologic products, including messenger RNA vaccines and mAbs, has led to the development of innovative manufacturing platform technologies that improve flexibility, mitigate cross-contamination risk, and reduce time and cost of cleaning between manufacturing campaigns.

FDA continues to use every tool available to help facilitate the development and availability of vaccines and other biological products to combat the COVID-19 pandemic expeditiously and safely. FDA is working on many efforts to address the COVID-19 pandemic, such as

• helping to expedite development programs for vaccines and certain therapeutic biological products that hold promise to prevent or treat COVID-19 by providing timely interactions, scientific advice, and recommendations for individual sponsors and through issuance of guidance documents;
• supporting product development and facilitating the scaling up of manufacturing capacity for high priority products to treat COVID-19 and conducting timely reviews;
• expediting the review of EUA requests and Biologics License applications for vaccines and other critical medical products to address COVID-19, including the evaluation of booster doses of COVID-19 vaccines and the use of COVID-19 vaccines in certain pediatric populations;
• helping to ensure an adequate and safe blood supply;
• providing information to healthcare providers and researchers to help them submit expanded access investigational new drug application requests to permit the use of the FDA-regulated investigational products for patients with COVID-19.^xxii

Current Actions to Address Supply Chain Vulnerabilities

Investments to address API and KSM supply chain vulnerabilities include domestic, direct production of APIs, including fine chemicals and catalysts, both more prevalent in U.S. pharmaceutical production, and biologically derived APIs produced for antibiotics. HHS investments to date stand at $105M resulting in prototypes for increased capacities for drug products at more than 600 million doses for six medicines in shortage. HHS is working to identify current product shortages, anticipate future shortages, and determine where and by whom the products are manufactured. HHS will then institute mitigation measures to ease or eliminate the shortages through investments to bolster domestic production.

Developing Essential Medicines List: In 2021, HHS assembled several consortia of public health experts and clinicians in the government, non-profit, and private sectors to review the FDA Essential Medicines List¹⁸ and recommend 50 to100 drugs that are most critical to have at all times due to clinical need and lack of therapeutic redundancy. An evaluation of the critical drugs list is underway to identify vulnerabilities for those items, which will define strategies to ensure domestic supply and production of essential medicines.

HHS is working with interagency partners, through industrial-based assessment and inquiries, to identify APIs that are at risk and critical to drug manufacturing. HHS is also investing in technology and infrastructure development to improve domestic capacity to produce APIs for a variety of essential medicines.

Partnering with the National Academies: Congress directed HHS to partner with the National Academies of Sciences, Engineering, and Medicine to assess the security and resilience of the U.S. medical products supply chain. The Committee on Security of America’s Medical Product Supply Chain was tasked with assessing U.S. reliance on critical drugs and devices sourced or manufactured outside the United States and making recommendations to strengthen the medical products supply chain by addressing these dependencies.^xxiii To examine critical dependencies within the supply chain, the committee held information-gathering sessions throughout 2021. The purpose of these sessions was to understand the end-users’ definitions of essential medical devices, the formula for creating essential medical devices lists, and the impact these lists have on decision-making in order to inform strategies to mitigate the impact of failures in the medical product supply chain.^xxiv Further exploration of this topic is now ongoing.

Partnering with the Interagency: In partnership with the Defense Advanced Research Projects Agency and the U.S. Air Force, two efforts are underway for drug substance and drug product production. The combined investments of approximately $105M are enabling advanced continuous synthesis of APIs, in support of cGMP-compliant manufacture of sterile injectable analgesics and sedative medications. The filing of an abbreviated new drug application with the FDA is planned during Q1 2022 for producing one of these drugs using these new methods.

Advancing Manufacturing Capabilities: HHS is investing in the development of advanced manufacturing capabilities to lower the cost of domestic manufacturing of critical supplies. Additional innovations will spur development and deployment of novel manufacturing platforms; the scale-up of these technologies will help develop the domestic pharmaceutical industry. This work will address the critical need to onshore the production of drug products and drug substances. Once established, it will be critical to sustain this new domestic pharmaceutical ecosystem. HHS will try to catalyze domestic pharmaceutical development by enabling factors to enhance competitiveness. These efforts include, but are not limited to, increasing technological efficiencies (e.g., automation) in pharmaceutical processes to decrease costs in production, enabling process intensification and scale-up, and improving data sharing and security to maximize collaboration and minimize redundancy in research and development efforts. To accomplish these goals, it is necessary to strengthen partnerships with private partners and within government, including those presently engaged in fostering development and deployment of advanced manufacturing platforms.

Gains in automation and improvements in efficiencies will not reduce the need for skilled labor, but instead will create employment opportunities throughout the supply chain. The gains and improvements will also enhance workers’ safety by reducing exposure to hazardous environments and ensuring an enterprise that is safe, highly productive, and sustainable. Although these activities will expand the ability to produce critical medicines domestically and increase competitiveness, without further effort vulnerabilities will persist.

In addition, ASPR¹⁹ has begun to establish a consortium with partners across the drug and vaccine manufacturing supply chain, including manufacturers of raw materials and consumables and suppliers of fill-finish services, to transform and build core capabilities for biodefense. The initial effort focuses on MCM manufacturing and the role that public-private partnerships can play in strengthening the Nation’s biomanufacturing infrastructure. It will support ongoing efforts to expand the industrial supply chain for MCM production, manufacturing, and implementation. The consortium’s goal is to establish the physical infrastructure, manufacturing platforms, and supply chains capable of producing enough vaccines for the entire U.S. population within 130 days and the global population within 200 days after recognition of a potential emerging pandemic threat. It expands the ability to domestically produce the therapeutics and vital supplies to halt future pandemics.^xxv

Creating a Rating System for Quality Management Maturity (QMM): HHS and FDA are constructing a program for a rating system to incentivize drug manufacturers to invest in achieving QMM and sustainable compliance.²⁰ The program’s purpose is to recognize manufacturers that develop mature quality management practices, which focus on continuous improvement, business continuity plans, and early detection of supply chain issues. To build this program, FDA has engaged with purchasers, pharmacies, and other federal agencies. FDA has executed two pilot programs, one for domestic manufacturers producing FDFs and one for foreign manufacturers producing API, to develop an assessment framework that can be used to rate the maturity of observed quality management practices at participating sites.

Detecting and Managing Supply Chain Disruptions: FDA continues to build on current drug shortage initiatives by leveraging available data, improving its visibility across business partners, and identifying data gaps needed to improve supply chain oversight. FDA’s Center for Drug Evaluation and Research (CDER) has recently established the Pharmaceutical Supply Chain Governance Board to facilitate and coordinate all supply chain initiatives across CDER and provide strategic guidance on major supply chain issues.

Allocating and Distributing Pharmaceuticals: HHS, through the HHS Coordination Operations and Response Element (H-CORE),²¹ is overseeing the allocation of mAbs on a state and territorial-level basis. Post allocation, HHS will continue to monitor therapeutic ordering and utilization at the facility and state levels to prevent excessive stockpiling and wastage of therapeutic inventory. HHS is planning for the distribution of molnupiravir^xxvi and is monitoring inventory levels, which will allow for earlier detection of supply disruptions and shortages.

Stopping Unlawful Products: FDA has issued more than 260 warning letters on the selling of unlawful, unproven products billing themselves as effective for the treatment, diagnosis, or prevention of COVID-19. In coordination with CBP, FDA has destroyed almost 85,500 violative products, totaling over 15,050,242 capsules, tablets, and other dosage forms of violative drugs.^xxvii​

Coordinating Vaccine Supply Chain with Industry: Currently, three COVID-19 vaccines have been authorized by FDA for emergency use under EUAs, and two of these three have been licensed for use in certain populations. These vaccines require similar resources needed to manufacture other vaccine candidates that are still completing clinical testing. Balancing these priorities across the supply chain requires successful coordination between the federal government and private industry. Much of this activity has been channeled through the H-CORE. The Federal COVID-19 Response Team and HHS have formulation and fill-finish manufacturing models for each vaccine candidate aligned to known final package format across a network of U.S.-based capacities. Vaccine capacity is primarily domestically based; however, HHS monitors the supply chain for critical components. Overall, vaccine demand will depend on a number of factors, including the impact of variants.

Planned Actions to Address Supply Chain Vulnerabilities

HHS will continue to invest in technology and infrastructure development to improve domestic capacity to produce APIs used for a variety of essential medicines. This includes technologies that will result in more sustainable production techniques, more efficient manufacturing systems, and burgeoning research such as the use of biosynthetic pathways to potentially reduce the supply chain footprint. The workforce at all levels of research and development as well as manufacturing is limited and requires additional personnel.

Work with Global Partners: The U.S. Government is proposing conversations with global partners to ensure cooperative agreements and near-shore capacities are available to diversify and sustain the supply chain, especially in times of crisis.

Expand Manufacturing Capacity: HHS plans to further invest in infrastructure to expand manufacturing capacity for single-use assemblies and the capacity expansion of domestic raw materials and special enzymes. It will invest $2.65B across three portfolio areas: vials,^22​ fill-finish,²³ consumables and raw materials. These investments will reduce risk to the vaccine supply chain and enable effective response to future public health emergencies without reverberation through existing biotherapeutic markets.

There is an opportunity to use end-to-end continuous manufacturing for both API and drug product manufacturing. Continuous manufacturing offers the potential to reduce drug shortages and increase or maintain quality standards, while keeping the industrial base globally competitive in this market. There are also a variety of novel analytical and drug production technologies that may be utilized in this area, including portable and modular manufacturing platforms (e.g., pharmaceuticals on demand), and using 3D-printing technologies for solid dosage forms.

Leverage Data: Provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act will allow FDA to gather data related to quantities of API and FDF released for commercial distribution. This data may improve future analyses by increasing transparency into the upstream supply chain and provide a more complete understanding of key manufacturers based on market share. Although reported annually, this will improve FDA’s awareness of potential issues before shortages arise, and domestic infrastructure investment could be prioritized based on criticality of an essential medicine as well as supply chain resiliency.

Although ongoing efforts address different parts of the vaccine supply chain, they do not address every tier of the component parts, such as suppliers of sand for glass and chemicals for lipids and nucleotide synthesis. In addition to stockpiling vaccine, there is opportunity to stockpile raw materials and other materials for vaccine development. Research is needed to determine feasibility of this approach, including additional factors that would need to be considered such as product expiration and usability of the stockpiled materials in different scenarios. Stockpiling consumables may prove more feasible than bioactive materials, although consumables have expiration dates. Vendor-managed inventory can also be considered, with vendors licensed to sell off supply at determined intervals. Consideration can also be given to alternatives to physical storage, including virtual stockpiles,^24​ whereby regular inventory buffer distributed across the supply network can by shifted as needed during a contingency response. ​​​​

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^18. FDA Publishes List of Essential Medicines, Medical Countermeasures, Critical Inputs, Required by Executive Order​​, accessed on January 24, 2022.

^19. BARDA’s Biopharmaceutical Manufacturing Consortium (BioMaC) Industry Day held on January 20, 2022.

^20. QMM and cGMP compliance are distinct concepts, although sometimes correlated. QMM approaches align with cGMP compliance, but QMM also incorporates additional distinct elements.

^21. Previously known as the Operation Warp Speed and the Countermeasures Acceleration Group.

^22. Biopharmaceutical surge capacity to enable production of 600 million vaccine doses within six to nine months requires a surge capacity of between 800 million and 1 billion vial containers.

^23. Seeks to expand existing domestic-based aseptic fill-finish manufacturing capacity for MCMs during a public health emergency. Expansion of fill-finish facilities enables development and scale-up of vaccine products during a public health emergency.

^24. “The idea of [virtual stockpile pooling] is to first integrate the stockpile into several locations’ regular inventory buffers and then dynamically reallocate the stockpile among these locations in reaction to the demand realizations to achieve a kind of virtual transshipment,” Fang Liu, Jing-Sheng Song, and Jordan D. Tong, “Building Supply Chain Resilience through Virtual Stockpile Pooling,” May 2, 2016, accessed January 25, 2022. ​​​​​​​