The following comment on my recent post “Remedy of US’s Drug Supply Chain Shortages and Domestic Production of Generic and Brand Drugs (1) has led to the development of this post.
"Excellent Article! I agree with every thought within it, and would add that once a firm is approved, Medicare, Medicaid and Veterans Administration should be obligated to buy from a domestic, US manufacturer. This would provide a ready market to tap into.
Your references too cover the other necessary incentives: 1) Tax free enterprise zones located throughout the US, 2) a preferential priority approval process for domestic Manufacturers of 90 days, and 3) a direct manufacturer to patient sale process without middle men and a transparent price and commission with and without insurance. ------ Dr. Albinus Marian D’Sa
For the last ten plus years most of the conversation has been about the brand drugs. There has been discussion about the nonavailability or high prices of the generic drugs due to tariffs and other political causes but no one has talked about or proposed any pathway to remediate the situation. I have outlined a US Government sponsored “Tender Program” that would make the basis to bring generic pharmaceutical manufacturing home. It is my belief is that its success will address drug cost and shortage issues and it could be expanded to other healthcare needs.
Most will without reviewing the plan will say that the title in itself is outlandish to say the least and non-achievable. However, the reality discussed can very different. Unless we review and discuss the objective along with the pathway of what we have to accomplish nothing will happen. We in USA have what it takes to get things done and lower generic drug prices by directly serving the needs of Medicaid, Medicare and Veterans Administration patients. Suggesting “it cannot be done” is not an option. It even could force patients to ration their necessary medicines over food (2). Anyone who thinks it cannot be done should not be reading any further. Perspective presented here is not influenced by any “for profit and/or nonprofit” organization.
I would call the task “ask not what your country can do for you - ask what you can do for your country-JFK” moment. A gemish of “can do” chemists, chemical engineers, logistics wizards along with participation of “can do” legislators, bureaucrats and technocrats would be needed. What is presented here has not been “thunked, thoughted out and discussed” in detail with masses but is based on our teachings, experiences, outlier thinking and accomplishments.
We have had number of Presidential Executive Orders, conversations and testimonies (too many to reference) to reduce/eliminate shortages but there has been no progress. Due to lack of any progress to produce most drugs in USA (3,4,5), a different “outlier” pathway is proposed. Many could say this proposal is ridiculous, not doable and fraught with pitfalls. May be it is, but in absence of any viable suggestion/attempt, this or something similar needs to be reviewed or considered. It will need every bit of help from the folks who are experts in walking through the regulatory, legislative and vested interest maze. “Can’t be done folks” are not needed. If the task was easy it would have been done long time ago. It might sound that I am repeating myself and I am, but the point is that in our NATIONAL INTEREST we need to do something that most outliers do. We have been challenged and succeeded to every contest if we want to.
Plan:
USA government will ask any global company or companies for tender bids (proposal) with experience in the manufacture of active pharmaceutical ingredients (API) and their formulations to start producing the top ten generic drugs, Table 1 (6) in ONE year using their manufacturing facility or facilities based in USA. Once approved they have to have operate the viable facility/is for the next five years. If for any reason a company decides to stop/withdraw during the term, they would be barred from the US market for the next five years. There will be no drug tiers for any the generic drugs (7).
These tender will have to meet requirements of the US Government processes. As I don’t know many of the US government tender process details, people familiar will have to participate and make sure things are organized for smooth execution.
Companies need to bid to supply the listed drugs (Table 1) to the Medicare, Medicaid and Veteran’s Administration of the United States of America. US Government will guarantee this patient base. Government will also facilitate establishment of the facilities. |
At least two companies will have to bid for each product. This will prevent price gouging. Qualification basis would be their product quality of the last two years. Company can bid for multiple drugs. Companies will have to follow US Federal Trade Commission guidelines. |
US Government will work with State governments and US Legislators for the establishment of such facilities (3, 4, 5). |
FDA has to make sure that it is asking every company necessary information so that their submission is complete and there is no missing information to assure approval. FDA will review and grant abbreviated new drug applications ANDAs in 90 days (8, 9, 10). In addition the produced products will be approved under FDA’s SLEP program (11). |
Table 1: Tender offering by US Government
1) Tender winning company/s will set up manufacturing facility in US to produce the active pharmaceutical ingredient (API) and its formulations. Companies and FDA will have to work hand and glove for all of the approvals. It is critical that companies start selling their approved products as soon as they have all of the necessary approvals and can produce the drug. Finished tablet sales produced in US have to be happen in the first year. For the success of tender based manufacturing it is critical that company start earning their desired return on their investment from the first year. They should be able to achieve higher margins than they are currently being achieved by all of the middle men involved in the distribution of generic drugs (12, 13, 14). US government has to assure that all of the necessary timelines to produce the drugs are met. FDA approvals on timely basis are critical (3, 4, 5). 2) Each tender company will have to become a US based entity governed by US Corporate Laws. 3) US Government will guarantee each company the necessary land, utilities, environmental permits. Each company working with US FDA will have to invest in US facility and demonstrate that all what is necessary to produce the designated/approved quality product is operational. Product quality will be randomly checked. Any non-compliance or deviation from the agreed/established standard would be a disqualification and could lead to closure of the manufacturing facility. All incurring losses will be companies responsibility. 4) Each tender will be valid for five years and depending on company’s product quality performance could be renewed for the next five years. If during the term of tender product quality does not meet the established standard, company would be barred to produce and sell any product in USA. |
1) Key raw materials needed for the API and their formulations will be sourced from the US based manufacturing companies. US government will have to support the involved infrastructure companies. Pharmaceutical manufacturing companies will have to develop, design and commercialize processes that would not live “square plug in a round hole” (1), a 60+ years old practice. There are manufacturing methods (12, 13, 14) they could consider. Chemists and chemical engineers are taught the fundamentals, may need to brush up and think differently. |
Table 2: Company Responsibilities
I am sure there are many other “i’s” that need to be dotted and many “t’s” that need to be crossed if such a route is endorsed by US Congress, population at large and different pharmaceutical vested interests. US Government will have to convince companies to venture out this “delicate” path and it is not going to be easy.
This route suggested here is and will be a major perturbation for US healthcare industry. Many with vested interests will make every effort through their legislators and influencers to make sure this pathway is obliterated before it sees light of the day. If any alternate path was easy it would have been adopted years ago. Let’s see who are the “brave hearts”.
Direct sales to Medicare, Medicaid and VA patients (estimated to be about 55 million) will be of great value to the tender wining company/s. My conjecture is that the manufacturing companies will have higher profits compared to their current selling prices to PBMs and their allies. This will be a big win for free competition.
Using the top 10 drugs (6) and their common dose one can calculate their annual API (active pharmaceutical ingredient) and the needed formulations. This is a good place to start.
Rank | Drug Name | Prescriptions (2022) | Total Patients (2022) | Prescriptions/ Patient/year | Milligram /Dose | Kilos /year (approx.) |
1 | Atorvastatin | 114,509,814 | 26,640,141 | 4.29 | 10 | 97,000 |
2 | Levothyroxine | 98,970640 | 20,225,373 | 4.89 | 0.1 | 738 |
3 | Metformin | 92,591,486 | 20,122,987 | 4.6 | 500 | 3,672,445 |
4 | Lisinopril | 88,597,361 | 19,816,361 | 4.47 | 10 | 72,300 |
5 | Amlodipine | 69,786,684 | 16,699,810 | 4.17 | 5 | 30,500 |
6 | Metoprolol | 66,413,692 | 15,007,908 | 4.42 | 25 | 137,000 |
7 | Albuterol | 61,948,347 | 17,902,020 | 3.46 | - | - |
8 | Omeprazole | 56,300,064 | 13,879,629 | 4.05 | 20 | 101,000 |
9 | Losartan | 54,815,411 | 12,690,563 | 4.31 | 50 | 231,600 |
10 | Gabapentin | 49,961,066 | 10,571,700 | 4.7 | 10 | 38,600 |
Table 3: Prescriptions and patients per year (6)
Manufacturing Technologies:
Numbers in Table 1 may not be of interest to many chemists and chemical engineers to determine the total active pharmaceutical ingredient (API) for each drug and number of finished tablets per drug. Village (12,13,14) has to decide on type of manufacturing process (batch or continuous) and the formulation facility needed for each product to satisfy US annual needs. It is expected that the “Village” has the expertise. Creativity and imagination can lead to very innovative manufacturing processes (12, 13, 14).
Based on the chemistry, a quick review of the kilos needed for each of the drug in Table 1, astute members of the village can decide on needed type of manufacturing facility. Based on my experience, some of the APIs can be produced using a continuous process (12, 13, 14, 15,16). It is my belief that the manufacturing processes for metoprolol and losartan can be simplified also. Albuterol is a liquid and not included. Levothyroxine dosage is in micro grams and can be campaigned in a properly designed equipment. Knowledge, experience, creativity and imagination of every village (12,13, 14) member will be put to test. All of the necessary manufacturing equipment is available in USA. Formulations would definitely need continuous processes. Technology and equipment exist but due to tradition has been used for batch processes. Value of continuous processes has been described and enumerated many time over in every chemical engineering books (12,13, 14). Chemists and chemical engineers have to lead the process development, design and commercialization effort. They can work with equipment vendors to select the process equipment, technology and methodology.
US Government (Legislators) along with Food and Drug Administration, Federal Trade Commission and local governments play an active role in my suggestion/proposal (3). Another piece of the puzzle that has to fit in hand and glove will be the manufacturing API methods and their formulations. We have to divide them in two paths. Each is easy if looked at separately. Sequential API manufacture and their formulation at single site once thought through works well.
Of the ten formulated drugs I have reviewed chemistry of four of the actives. Each can be commercially produced using continuous processes (12, 13, 14, 15,16). Their investment and environmental footprints will be smaller than the current methods. I have not reviewed their raw materials but should be readily available in USA. Other drugs can also be similarly produced continuously and their chemistries might need a review and some process development. Tender based manufacturing with improved FDA approval practices present a unique opportunity to produce the needed drugs at a breakneck speed if USA wants to produce the drugs and supply to the patients in the three groups mentioned above.
What has been suggested/proposed above is a herculean task and is not easy. Significant effort would be required from legislators, regulators, litigators and benefactors (pharmaceutical companies) and a unified effort would be needed. This would be a case of “do or do not and there is no try -- Yoda”. To protect health of USA population against political blackmail resulting in high drug costs, such an effort is necessary.
I believe that to produce and sell generic drugs under the US Government tender offer program is an excellent opportunity to revolutionize pharmaceutical manufacturing processes and technologies for ages to come.
Challenges:
We should not forget that the adoption of this and/or any proposed plan would be a challenge to many participants of the current system i.e. how they conduct their business. We all know that we are set in our ways and do not want to change. However, in US’s national interest the proposed change is necessary. There are “TORS” who stand out. They are LegislatORS, RegulatORS. LitigaTORS and “K StreetORS” who have led to the creation of the current system. Instead they would have to put national interest ahead of their personal interest.
Hurdles will also come pharmacy benefit managers and the supply chainers, I call them distribuTORS. US Congress will have prevent them so that they do not kill this effort. We have to remember their profits will be impacted. Every effort will be made to obliterate any thought of success of this effort.
US legislators most likely would have to change the current regulations that are in the books for the approval of abbreviated new drug applications (ANDA). Regulators will have to change the information that has to be submitted by the companies for the approval of the ANDA applications. Companies submitting ANDA applications would have to learn and submit the necessary information so that ANDA can be approved as quickly as possible in less that 90 days (1).
In summary for the winning tender system to work the and company to produce drugs in USA and success each of the following has to happen.
1. Every time line has to be met by the bid winning companies.
2. FDA has the systems in place to approve ANDAs in 90 days.
3. All of the necessary environmental , construction approvals, for the manufacturing site/s are met on a timely basis.
4. Legislators work in the interest of USA based patients rather than the current middle men (TORS).
5. Federal and state laws be in place to enable Medicare, Medicaid and Veterans Administration to purchase drugs for domestic supply in preference to foreign manufacturers.
6. Laws have to be in place to prevent middle men (like Pharmaceutical Business Managers), insurance companies and other “TORS” from gaming the current system and minimizing profits of the manufacturers.
Above is an attempt and I would request/suggest readers to chime in and take this or similar plan to their legislators for further consideration and approval. Unless we the people demand meaningful changes in the current ways, nothing is going to change.
Girish Malhotra, PE
EPCOT International
References:
1. Malhotra, Girish: Remedy of US’s Drug Supply Chain Shortages and Domestic Production of Generic and Brand Drugs, Profitability through Simplicity, April 15, 2025
2. Malhotra, Girish: Drug Prices: Food vs. Medicine - A Difficult Choice for Some, Profitability through Simplicity, June 16, 2011
3. Malhotra, Girish: US’s Self Sufficiency for Generic Drugs: A Supply Dilemma and Potential Solutions, Profitability through Simplicity, March 31, 2022
4. Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity December 6, 2019
5. Malhotra, Girish: Roadmap to Reduce Drug Shortages and Bring Pharma Manufacturing Home (US), Profitability through Simplicity, October 30, 2023
6. The Top 50 Drugs Prescribed in the United States
7. Understanding Drug Tiers October 22, 2023
8. Malhotra, Girish: What Is Needed for a Regulatory Approval of NDA/ANDA Filings in 90 Days? Profitability through Simplicity, October 24, 2018
9. Malhotra, Girish: ONE PAGE Road Map to Reduce Drug Shortages, Assure Quality and Improve Affordability, Profitability through Simplicity, December 6, 2019
10. Malhotra, Girish: Simplified Roadmap for ANDA/NDA Submission and Approval will change Pharma Landscape, Profitability through Simplicity, November 25, 2018
11. Expiration Dating Extension
12. Malhotra, Girish: Active Pharmaceutical Ingredient Manufacturing: Nondestructive Creation De Gruyter May 2022
13. Malhotra, Girish: Chemical Process Simplification: Improving Productivity and Sustainability John Wiley & Sons, February 2011
14. Malhotra, Girish: Chapter 4 “Simplified Process Development and Commercialization” in “ Quality by Design-Putting Theory into Practice” co-published by Parenteral Drug Association and DHI Publishing February 2011
- Malhotra, Girish: Considerations to Simplify Organic Molecule (API) Manufacturing Processes: My perspective, Profitability through Simplicity, April 20, 2019
- Malhotra, Girish: Alphabet Shuffle: Moving From QbA to QbD - An Example of Continuous Processing, Pharmaceutical Processing, February 2009 pg. 12-13
