Pending “Buy America” Executive Order Threatens Coronavirus Response

Pending “Buy America” Executive Order Threatens Coronavirus Response

This week, as the coronavirus pandemic surges, President Trump is considering an executive order that would result in obstructing the movement of critical medical supplies and treatments.

The new order aims to bring the pharmaceutical supply chain back to the United States by forcing federal agencies to “Buy America”—American medical equipment, American pharmaceutical ingredients, American drugs and vaccines, you name it.

Now is not the time to shutter our borders and prevent global cooperation. Americans already face massive shortages of diagnostic tests and vital supplies, like face masks and ventilators. And they’re waiting for researchers to develop a COVID-19 vaccine or treatment that will require collaborative sourcing from around the world.

By forsaking an all-hands-on-deck approach, the president would exacerbate the public health crisis at hand and put more American lives at risk.

The potential executive order, expected any day now, would impose “Buy America” provisions on the Department of Health and Human Services, Department of Defense, and Department of Veterans Affairs. Under the new rules, the agencies could only purchase American-made pharmaceutical ingredients, raw materials, medical equipment, and medical supplies.

Administration officials claim the order is necessary to prevent U.S. pharmaceutical supply chains from becoming too reliant on foreign countries—particularly China. But any discussions regarding repatriating supply chains can wait until the COVID-19 crisis has passed.

Right now, it’s far too risky to force a structural overhaul of this magnitude. The large-scale “Buy America” mandates would immediately disrupt the pharmaceutical industry’s ability to source, produce, and distribute critical supplies and therapeutics.

That’s because the industry depends on access to supply from a diversity of sources. This intricate value chain involves the raw materials, active pharmaceutical ingredients, analytic tools, medical equipment and specialized labor forces of countries across the world.

Suddenly forcing the industry to upend existing production chains and only use U.S. manufacturers and inputs would prove disastrous. It would make it nearly impossible to deliver medicines and medical products at the pace required during this emergency. Crippling shortages and delays would ensue.

This global supply chain exists for a reason—it’s the most efficient means of production. By eliminating all flexibility in sourcing, companies could no longer base their decisions on feasibility or cost-effectiveness. That could mean a slower supply chain at higher prices.

Already, it takes more than a decade and $2 billion to successfully bring one new product to market. The new mandate would make pharmaceutical production longer and costlier.

The “Buy America” requirements would also invite negative, international responses. Countries would likely pursue retaliatory action against the United States for violation of existing World Trade Organization obligations and U.S. free trade agreements with respect to essential medicines and emergency medical countermeasures. Meanwhile, our trading partners could limit exports of their own critical goods, supplies and compounds.

This wouldn’t just hurt long-term U.S. global competitiveness; it could also delay the availability of a COVID-19 vaccine or treatment. Mass producing any experimental vaccine or antiviral drug will require a concerted, multilateral effort from initial sourcing to final packaging. If the United States is deprived access to foreign markets—and their materials, services, and facilities—widely available treatments could prove evasive.

In confronting global pandemics—like COVID-19—it’s critical to lean on shared knowledge and resources. Closing the United States off from the rest of the world would needlessly constrain our emergency response efforts and jeopardize millions of Americans.

Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is False Premise, False Promise: The Disastrous Reality of Medicare for All, (Encounter 2020). Follow her on Twitter @sallypipes.

Read More

Subscribe to our newsletter:

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.