Sean Fenske, Editor-in-Chief09.01.20
In the April issue of MPO, my Editor’s Letter centered around proposed legislation—Commission on America’s Medical Security—and the overall impact COVID-19 fallout would have on the U.S. medical products supply chain. That specific bill is still in the “introduction” phase and may not even make it out of that for a vote. But that hasn’t stopped people from talking about the current status of the supply chain that fulfills our healthcare needs, from pharmaceuticals to medical devices.
As I alluded to in that letter, I have a cynical aspect that doesn’t see changes remaining in place long-term. Certainly, revisions will occur in the near-term and many companies will investigate U.S. suppliers for their needs or, perhaps more likely, at least look to suppliers on the same continent (i.e., Mexico). But ultimately, as it typically does, the almighty dollar will win out. If companies see sourcing in the U.S. as too costly a measure for every component, ultimately, they will source from whatever region of the world is most economical.
As for the primary focus of this discussion, China’s role in sourcing has already changed, which was taking place well before the pandemic. More and more, the message I’ve been hearing from companies is they aren’t using China as a manufacturing or sourcing location for all of their facilities or products. Rather, they were using China to serve Chinese customers or Asia’s healthcare needs. More economical options had already emerged in place of China for lower cost labor and firms were exploring them.
The pandemic, however, has unearthed new concerns regarding any sourcing done overseas (especially in Asia), whether China, Malaysia, Vietnam, or elsewhere. With the threat of pharmaceutical and device shortages making headlines often in 2020, those outside the industry have been made aware of the potential problems. This means patients, healthcare professionals, politicians, and the media. As a result, it’s become a major talking point.
Arguably, no one is talking more about changing where medical products originate than President Trump. So much so, in fact, that on Aug. 6, he issued an Executive Order to ensure “Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States.” The order promotes use of advanced manufacturing technologies, regulatory process streamlining, supply chain vulnerability identification, and procuring locally (i.e., within the U.S.) manufactured medical products. The specific details of how this will be accomplished are lacking, but it does assign the task to appropriate heads of government departments and agencies.
There will certainly be challenges encountered with this effort. One such problem that comes to mind is many firms are facing workforce shortages and having difficulty filling available positions already. Can U.S.-based suppliers exclusively fulfill the needs of the U.S. healthcare system, even if we’re only talking about essential pharmaceuticals and devices?
Also, while we know ventilators and personal protection equipment are essential for this pandemic, will that be the same for a future event? How could we possibly know which medicines will be essential for a future pandemic? That isn’t to say if we are unsure we shouldn’t do anything at all—that’s a recipe for certain disaster. PPE will be essential regardless of the specifics of a future pandemic. Equipment to help keep patients alive, such as ventilators, will be important as well. But where will the line be drawn? Is monitoring equipment important enough to fall under this order? What about diagnostic supplies? What materials will be deemed essential to ensure we can fabricate necessary testing products? Again, I’m not saying inaction is the answer, but I do have questions about how this will be carried out.
Other measures are being put in place to help at least try to prevent future shortages. The FDA has established an e-mail notification system for companies to use when a firm expects there could be “an interruption or permanent discontinuance in manufacturing devices that are critical to public health during a public health emergency” and “devices for which FDA determines information on potential meaningful supply disruptions is needed during a public health emergency.” They also provide a list of devices deemed potentially necessary (which does address some of my questions mentioned previously, although it’s quite a list). The list includes the aforementioned PPE and ventilators, but also includes ICU/hospital products, hematology products, infusion pumps, needles and syringes, sterilization products, vital sign monitoring equipment, and more. Again, storing these for a future pandemic will be quite the task.
What do you think? Will we see a shift in how medical devices are manufactured for the U.S. healthcare industry long term or will we eventually see a return to the pre-pandemic status quo?
Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com
As I alluded to in that letter, I have a cynical aspect that doesn’t see changes remaining in place long-term. Certainly, revisions will occur in the near-term and many companies will investigate U.S. suppliers for their needs or, perhaps more likely, at least look to suppliers on the same continent (i.e., Mexico). But ultimately, as it typically does, the almighty dollar will win out. If companies see sourcing in the U.S. as too costly a measure for every component, ultimately, they will source from whatever region of the world is most economical.
As for the primary focus of this discussion, China’s role in sourcing has already changed, which was taking place well before the pandemic. More and more, the message I’ve been hearing from companies is they aren’t using China as a manufacturing or sourcing location for all of their facilities or products. Rather, they were using China to serve Chinese customers or Asia’s healthcare needs. More economical options had already emerged in place of China for lower cost labor and firms were exploring them.
The pandemic, however, has unearthed new concerns regarding any sourcing done overseas (especially in Asia), whether China, Malaysia, Vietnam, or elsewhere. With the threat of pharmaceutical and device shortages making headlines often in 2020, those outside the industry have been made aware of the potential problems. This means patients, healthcare professionals, politicians, and the media. As a result, it’s become a major talking point.
Arguably, no one is talking more about changing where medical products originate than President Trump. So much so, in fact, that on Aug. 6, he issued an Executive Order to ensure “Essential Medicines, Medical Countermeasures, and Critical Inputs Are Made in the United States.” The order promotes use of advanced manufacturing technologies, regulatory process streamlining, supply chain vulnerability identification, and procuring locally (i.e., within the U.S.) manufactured medical products. The specific details of how this will be accomplished are lacking, but it does assign the task to appropriate heads of government departments and agencies.
There will certainly be challenges encountered with this effort. One such problem that comes to mind is many firms are facing workforce shortages and having difficulty filling available positions already. Can U.S.-based suppliers exclusively fulfill the needs of the U.S. healthcare system, even if we’re only talking about essential pharmaceuticals and devices?
Also, while we know ventilators and personal protection equipment are essential for this pandemic, will that be the same for a future event? How could we possibly know which medicines will be essential for a future pandemic? That isn’t to say if we are unsure we shouldn’t do anything at all—that’s a recipe for certain disaster. PPE will be essential regardless of the specifics of a future pandemic. Equipment to help keep patients alive, such as ventilators, will be important as well. But where will the line be drawn? Is monitoring equipment important enough to fall under this order? What about diagnostic supplies? What materials will be deemed essential to ensure we can fabricate necessary testing products? Again, I’m not saying inaction is the answer, but I do have questions about how this will be carried out.
Other measures are being put in place to help at least try to prevent future shortages. The FDA has established an e-mail notification system for companies to use when a firm expects there could be “an interruption or permanent discontinuance in manufacturing devices that are critical to public health during a public health emergency” and “devices for which FDA determines information on potential meaningful supply disruptions is needed during a public health emergency.” They also provide a list of devices deemed potentially necessary (which does address some of my questions mentioned previously, although it’s quite a list). The list includes the aforementioned PPE and ventilators, but also includes ICU/hospital products, hematology products, infusion pumps, needles and syringes, sterilization products, vital sign monitoring equipment, and more. Again, storing these for a future pandemic will be quite the task.
What do you think? Will we see a shift in how medical devices are manufactured for the U.S. healthcare industry long term or will we eventually see a return to the pre-pandemic status quo?
Sean Fenske, Editor-in-Chief
sfenske@rodmanmedia.com
