A Bold Goal: Reshoring 25% of Small Molecule API to the U.S. in 5 Years – APIIC’s Report to The White House

In September 2022, while the world was still in the midst of the COVID-19 epidemic and dealing with significant supply chain woes, President Biden issued an Executive Order—Executive Order 14081—titled “Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy.”  Section 1 of the Executive Order laid out the Biden Administration’s policy to, among other things, “coordinate a whole-of-government approach to advance biotechnology and biomanufacturing towards innovative solutions in health, climate change, energy, food security, agriculture, supply chain resilience, and national and economic security.”  To that end, the Executive Order provides that the Assistant to the President for National Security Affairs (“APNSA”), in consultation with the Assistant to the President for Economic Policy (“APEP”) and the Director of the Office of Science and Technology Policy (“OSTP”), shall coordinate the executive branch actions necessary to implement Executive Order 14081 through the interagency process; and that the APNSA and the APEP, in coordination with the Secretary of the Department of Health and Human Services, among other exectutive branch components, “shall develop a strategy that identifies policy recommendations to expand domestic biomanufacturing capacity for products spanning the health, energy, agriculture, and industrial sectors, with a focus on advancing equity, improving biomanufacturing processes, and connecting relevant infrastructure.”

Fast-forward to March 2023, when The White House OSTP issued a document per Executive Order 14081, titled “Bold Goals for U.S. Biotechnology and Biomanufacturing; Harnessing Research and Development to Further Societal Goals.”  One component of the OSTP report is “Biotechnology and Biomanufacturing R&D to Further Supply Chain Resilience,” and it includes nine goals in three themes “intended to provide a broad vision to build supply chain resilience for the U.S. bioeconomy.”  As the report explains:

This report provides a vision for harnessing research and development (R&D) advances in biotechnology and biomanufacturing to build supply chain resilience. This vision is comprised of nine near- and longterm bold goals, and associated R&D needs, within three major themes. If this vision is achieved, the United States can bring innovative biotechnologies and products to markets faster while building a more robust supply chain ecosystem.

In Theme 1, we provide bold goals for alternative supply chain pathways via biotechnologies and biomanufacturing to promote economic security. We identify R&D opportunities to promote the development of innovative biomanufacturing pathways that could address supply chain bottlenecks for critical drugs, chemicals, and other materials.

In Theme 2, we explore biomanufacturing innovation to enhance supply chain resilience. We identify R&D efforts required to advance flexible and adaptive biomanufacturing platforms to mitigate the effects of supply chain disruptions.

In Theme 3, we address standards and data infrastructure to support biotechnology and biomanufacturing commercialization and trade. We identify standards and data R&D needed to enable biotechnology and biomanufacturing scale-up and global competitiveness of U.S. companies.

Achieving these bold goals will require public-private partnerships, effective coordination with domestic and international partners, and integration of key biosafety and biosecurity considerations. Realization of these bold goals can also enable the United States to maintain its global leadership in the emerging bioeconomy and create quality jobs while addressing some of society’s greatest challenges.

The first goal under Theme 1—Goal 1.1—is identified as “Improving Supply Chains for Critical Drugs,” and states: “In 5 years, deploy broad synthetic biology and biomanufacturing capabilities to produce at least 25% of all active pharmaceutical ingredients (APIs) for small molecule drugs” (emphasis added).

That’s a pretty lofty API manufacturing goal, but one that the API Innovation Center (“APIIC”) was charged to take up, consider, and propose some possible solutions.  And so in November 2023 in St. Louis, Missouri, APIIC convened a working group of 15 experts in an event titled “Pathway to Build Supply Chain Resilience for Critical Drugs.”  This blogger was fortunate enough to have been invited to participate in the working group as a moderator of two of four panels.  The four panels of experts focused on: (1) Current U.S. capacity and technologies to support small molecule API production, including the impact of key starting material availability on U.S. API production; (2) Criteria for selection of essential medicine small molecule APIs for manufacture; (3) Barriers to reshoring small molecule API manufacturing; and (4) Ways to build a resilient drug supply chain.

The robust discussion that day in November 2023 is now captured in an APIIC report announced this week, titled “A Bold Goal: Reshoring 25% of Small Molecule API to the U.S. in 5 Years.”   As discussed in the new report, producing 25% of all APIs for small molecule drugs within 5 years is an achievable goal:

To achieve this goal, this white paper proposes API manufacturers adopt advanced manufacturing technologies provisioned through public incentives.  Industry should leverage existing technologies while furthering research and development of innovative and disruptive technologies, in partnership with academia and government.  A single public entity should coordinate the public-private partnerships established as part of this national strategy.  Identifying a subset of APIs for initial deployment would yield invaluable insights that further propel the nation towards achieving the 25% goal.

These concepts are further explored in the report.  For example:

To mitigate the risk of relying on China and India for small-molecule APIs, the panel determined advanced manufacturing biotechnologies and biomanufacturing processes must be implemented.  Advancements in synthetic biology realized through advanced technology can improve small molecule API manufacturing.  The cost of implementing these technologies must be addressed.  Price erosion and consolidation have had a major impact on the U.S. generic pharmaceutical industry, resulting in low profit-margins.  A public-private modernization model, together with federally committed contracts, will accelerate the implementation of advanced manufacturing technology. Regulatory barriers to implementation should also be addressed and “Made in America” incentives should be addressed to enhance market competitiveness.

Ultimately, APIIC identifies several immediate, short-term, and long-term steps to meet the “Bold Goal,” and concludes that “[a] comprehensive approach of the U.S. government, including the appointment of a coordinating entity, establishment of new funding lines, and rigorous review of regulatory authorities and policies, is imperative in implementing the incremental steps mentioned above.  Improving our national health security requires significant mitigation of risk by creating a diversified manufacturing base and distributed buffer inventories that will guarantee Americans reliable access to essential medications.”

We encourage folks to review the full report and to consider what additional actions can be done to onshore the U.S. drug supply chain.