WITA Panelists Say Government Intervention in Medical Supply Chains Needed, but Overreach a Danger
A former international trade commissioner warned that as government works to make supply chains more resilient, it's important that the private sector is listened to, and that the solution is passed in Congress, rather than through an executive order, which increases the chances of yo-yo'ing policy as administrations change.
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“New government mandates will be costly, and thus must be measured and carefully chosen,” said Meredith Broadbent, now a senior adviser at the Center for Strategic and International Studies. She spoke April 1 on a webinar about more secure medical supply chains, co-hosted by Women in International Trade and the Washington International Trade Association.
Broadbent and other panelists agreed that reshoring is not the answer, because that just concentrates risk at home instead of in China or Malaysia. She said a CSIS report she wrote recommended that the U.S. government coordinate with other countries to form a trusted supplier network, and that the countries pledge to prioritize the flow of goods during crises. They also should commit to enhanced supply chain visibility.
Jonathan Kimball, vice president for trade and international affairs at the Association for Accessible Medicines, the generic drug industry's trade group, said 52,000 people work in the generic drugs industry in the U.S., producing $60 billion worth of medicines annually. But bringing more essential medicine -- and its precursor ingredients -- to the U.S. requires tax incentives and regulatory reform, he said. “And where the U.S. is the direct purchaser of medicines, there should be long-term price and volume contracts,” he said. Kimball said 5% of the drugs purchased in the U.S. are under that direct government purchase rubric, through the Department of Defense or the Veterans Administration. He also said the strategic national stockpile's drug list should be expanded to all essential medicines. That predictable demand and price will allow U.S. generic manufacturers to compete against low-priced imports, he said.
Catherine Mellor, UPS vice president of international trade, said the COVID-19 pandemic showed we are overly reliant on one country for personal protective equipment. That meant customers were victim to regulatory delays, and also were vulnerable to buying counterfeits because such goods are easy to counterfeit. “We didn't have as many trusted manufacturers as needed,” she said. And Mellor said UPS was in a very difficult position: With reduced air cargo space, it had to decide which shipments got space as the most essential shipments. “From our perspective PPE does represent a problem to be solved,” she said.
But, she said, while importers and exporters have learned a lot in the past year about healthcare distribution, emergency response and vaccine development, companies like UPS need to be included in policymaking discussions. UPS executives want to make sure lawmakers or regulators don't leap to conclusions, such as that a complex supply chain means more difficulty obtaining a good in a crisis, Mellor said.
Moderator Maddison Abboud, with the U.S. Chamber of Commerce, asked Broadbent what would stop even trusted partners from implementing export restrictions in a future pandemic.
“I don't think anyone is saying there’s going to be a guarantee of no export restrictions ever,” Broadbent replied. Countries should agree that those restrictions are targeted, time-limited and used only in the most dire situations, she said. “There will be always political pressure for export restrictions, but to try to moderate that,” she said.
Mellor said as the U.S. shares its expertise in vaccine distribution and shares the vaccines it purchased beyond its own needs, “that will go a long way to facilitate some of these conversations” on forming a network of trusted trading partners.