Now is Not the Time to Disrupt Medical Supply Chains with Buy American Policies | Citizens Against Government Waste

Now is Not the Time to Disrupt Medical Supply Chains with Buy American Policies

The WasteWatcher

President Trump is expected to sign an Executive Order this week being pushed by Director of the Office of Trade and Manufacturing Policy Peter Navarro, that would require federal agencies to “Buy American.”  The ostensible purpose is to decrease the nation’s dependence on foreign-produced medical supplies, like active pharmaceutical ingredients (API) or components for medical devices.  If implemented, it will do the exact opposite by creating shortages of vitally needed medical equipment and pharmaceuticals, ultimately hurting patients at this obviously critical time.

Citizens Against Government Waste (CAGW) understands the concern the administration and members of Congress have with China and its recent actions concerning the coronavirus.  But, when the nation is in the middle of an unprecedented public health crisis, it is not the time to impose restrictions on federal agency purchases.  The U.S. is already having shortages with medical supplies like face masks and medical gloves without compounding the problem by imposing strict “Buy American” mandates on manufacturers.

Borders are closed to people not commerce.  There is still a global marketplace.  Many countries provide essential medical ingredients and lifesaving devices for companies across the world.  Restricting the manufacturing of pharmaceutical-related goods to the U.S. will interfere with supply chains and create even more shortages.

Medical supply companies cannot simply retool their production lines in a short period of time to meet the kind of requirements being proposed.  Many medical products are already manufactured in the Unites States, but if one component is made overseas and could no longer be used, that would cause a huge disruption to an entire production line.  Furthermore, buying 100 percent American is not always possible.  The U.S. has neither the raw materials nor the workforce to make a product entirely in the United States.  If this Executive Order was implemented, the cost of drugs and all medical supplies will increase, not decrease.

Implementing this policy would create severe problems far beyond disrupting supply chains.  There would be retaliation from U.S. trading partners, further hurting the economy.

Pharmaceutical and medical device companies understand that there are problems with other countries that supply material to the U.S.  Clearly China’s actions with respect to stealing intellectual property, problems with contaminated pharmaceutical ingredients, and making veiled threats about withholding raw materials for antibiotics have certainly caught their attention.  In February, the French multi-national pharmaceutical company Sanofi announced plans to open a new company in Europe that would manufacture active APIs that they would sell to other pharmaceutical companies to be less reliant on unstable and region-specific manufacturing problems.  Other companies may do the same, but those decisions should be based on their individual business needs, which takes time and cannot be done in a few weeks.

Forcing government agencies to buy only goods manufactured within a country’s borders is not consistent with American principles of capitalism and free markets.  It would also set a bad precedent for other industries and products.  While it is necessary to temporarily close our borders to people, it is unnecessary to permanently close our borders to goods and services that are beneficial to taxpayers and consumers.