    [House Hearing, 119 Congress]
    [From the U.S. Government Publishing Office]

                     MADE IN AMERICA: STRENGTHENING DOMESTIC
                      MANUFACTURING AND THE HEALTHCARE SUP-
                      PLY CHAIN
    =======================================================================

                                    HEARING

                                   BEFORE THE

                             SUBCOMMITTEE ON HEALTH

                                     OF THE

                        COMMITTEE ON ENERGY AND COMMERCE
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                 JUNE 11, 2025

                                   __________

                               Serial No. 119-25

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

         Published for the use of the Committee on Energy and Commerce

                       govinfo.gov/committee/house-energy
                            energycommerce.house.gov

                                 __________

                     U.S. GOVERNMENT PUBLISHING OFFICE
    60-898 PDF               WASHINGTON : 2026
    =======================================================================

                        COMMITTEE ON ENERGY AND COMMERCE

                            BRETT GUTHRIE, Kentucky
                                     Chairman
    ROBERT E. LATTA, Ohio                FRANK PALLONE, Jr., New Jersey
    H. MORGAN GRIFFITH, Virginia           Ranking Member
    GUS M. BILIRAKIS, Florida            DIANA DeGETTE, Colorado
    RICHARD HUDSON, North Carolina       JAN SCHAKOWSKY, Illinois
    EARL L. ``BUDDY'' CARTER, Georgia    DORIS O. MATSUI, California
    GARY J. PALMER, Alabama              KATHY CASTOR, Florida
    NEAL P. DUNN, Florida                PAUL TONKO, New York
    DAN CRENSHAW, Texas                  YVETTE D. CLARKE, New York
    JOHN JOYCE, Pennsylvania, Vice       RAUL RUIZ, California
        Chairman                         SCOTT H. PETERS, California
    RANDY K. WEBER, Sr., Texas           DEBBIE DINGELL, Michigan
    RICK W. ALLEN, Georgia               MARC A. VEASEY, Texas
    TROY BALDERSON, Ohio                 ROBIN L. KELLY, Illinois
    RUSS FULCHER, Idaho                  NANETTE DIAZ BARRAGAN, California
    AUGUST PFLUGER, Texas                DARREN SOTO, Florida
    DIANA HARSHBARGER, Tennessee         KIM SCHRIER, Washington
    MARIANNETTE MILLER-MEEKS, Iowa       LORI TRAHAN, Massachusetts
    KAT CAMMACK, Florida                 LIZZIE FLETCHER, Texas
    JAY OBERNOLTE, California            ALEXANDRIA OCASIO-CORTEZ, New York
    JOHN JAMES, Michigan                 JAKE AUCHINCLOSS, Massachusetts
    CLIFF BENTZ, Oregon                  TROY A. CARTER, Louisiana
    ERIN HOUCHIN, Indiana                ROBERT MENENDEZ, New Jersey
    RUSSELL FRY, South Carolina          KEVIN MULLIN, California
    LAUREL M. LEE, Florida               GREG LANDSMAN, Ohio
    NICHOLAS A. LANGWORTHY, New York     JENNIFER L. McCLELLAN, Virginia
    THOMAS H. KEAN, Jr., New Jersey
    MICHAEL A. RULLI, Ohio
    GABE EVANS, Colorado
    CRAIG A. GOLDMAN, Texas
    JULIE FEDORCHAK, North Dakota
                                     ------

                               Professional Staff

                         MEGAN JACKSON, Staff Director
                    SOPHIE KHANAHMADI, Deputy Staff Director
                   TIFFANY GUARASCIO, Minority Staff Director
                             Subcommittee on Health

                       EARL L. ``BUDDY'' CARTER, Georgia
                                     Chairman
    NEAL P. DUNN, Florida, Vice          DIANA DeGETTE, Colorado
        Chairman                           Ranking Member
    H. MORGAN GRIFFITH, Virginia         RAUL RUIZ, California
    GUS M. BILIRAKIS, Florida            DEBBIE DINGELL, Michigan
    DAN CRENSHAW, Texas                  ROBIN L. KELLY, Illinois
    JOHN JOYCE, Pennsylvania             NANETTE DIAZ BARRAGAN, California
    TROY BALDERSON, Ohio                 KIM SCHRIER, Washington
    DIANA HARSHBARGER, Tennessee         LORI TRAHAN, Massachusetts
    MARIANNETTE MILLER-MEEKS, Iowa       MARC A. VEASEY, Texas
    KAT CAMMACK, Florida                 LIZZIE FLETCHER, Texas
    JAY OBERNOLTE, California            ALEXANDRIA OCASIO-CORTEZ, New York
    JOHN JAMES, Michigan                 JAKE AUCHINCLOSS, Massachusetts
    CLIFF BENTZ, Oregon                  TROY A. CARTER, Louisiana
    ERIN HOUCHIN, Indiana                GREG LANDSMAN, Ohio
    NICHOLAS A. LANGWORTHY, New York     FRANK PALLONE, Jr., New Jersey (ex
    THOMAS H. KEAN, Jr., New Jersey          officio)
    MICHAEL A. RULLI, Ohio
    BRETT GUTHRIE, Kentucky (ex
        officio)
                                 C O N T E N T S

                                  ----------
                                                                       Page
    Hon. Earl L. ``Buddy'' Carter, a Representative in Congress from
      the State of Georgia, opening statement........................     1
        Prepared statement...........................................     4
    Hon. Diana DeGette, a Representative in Congress from the State
      of Colorado, opening statement.................................    10
        Prepared statement...........................................    12
    Hon. Brett Guthrie, a Representative in Congress from the
      Commonwealth of Kentucky, opening statement....................    14
        Prepared statement...........................................    16
    Hon. Frank Pallone, Jr., a Representative in Congress from the
      State of New Jersey, opening statement.........................    19
        Prepared statement...........................................    21

                                   Witnesses

    Patrick Cashman, President, USAntibiotics........................    23
        Prepared statement...........................................    26
        Answers to submitted questions...............................   207
    John Murphy III, President and Chief Executive Officer,
      Association for Accessible Medicines...........................    35
        Prepared statement...........................................    37
        Answers to submitted questions...............................   211
    Ronald T. Piervincenzi, Ph.D., Chief Executive Officer, United
      States Pharmacopeia............................................    45
        Prepared statement...........................................    47
        Answers to submitted questions...............................   215
    Dawn O'Connell, Former Assistant Secretary for Preparedness and
      Response, Administration for Strategic Preparedness and
      Response, Department of Health.................................    65
        Prepared statement...........................................    67
        Answers to submitted questions...............................   219
    Josh Bolin, Associate Executive Director, Government Affairs and
      Innovation, National Association of Boards of Pharmacy.........    72
        Prepared statement...........................................    74
        Answers to submitted questions...............................   221

                               Submitted Material

    Inclusion of the following was approved by unanimous consent.
    List of documents submitted for the record.......................   128
    Report by Cencora, ``Addressing generic drug shortages:
      Contributing factors and public policy recommendations'' \1\
    Letter of June 9, 2025, from Kathryn DiBitetto, Vice President,
      Government Affairs, Health Industry Distributors Association,
      to Mr. Guthrie, et al..........................................   129
    Statement of the Alliance for Home Dialysis, June 11, 2025.......   131
    Statement of StringKing by Jake McCampbell, Cofounder and Chief
      Executive Officer, June 11, 2025...............................   134

    ----------

    \1\ The report has been retained in committee files and is included in
    the Documents for the Record at https://docs.house.gov/meetings/IF/
    IF14/20250611/118366/HHRG-119-IF14-20250611-SD003.pdf.
    Article of April 30, 2025, ``No Respect: How Misrepresenting
      Compounded Drugs Hurts Patients,'' by Scott Brunner, Chief
      Executive Officer, Alliance for Pharmacy Compounding,
      InsideSources.com..............................................   137
    Report by the National Association of Boards of Pharmacy,
      ``Report of the DSCSA State Regulator & Dispenser Tracing Pilot
      With the United States Pharmaceutical Supply Chain''...........   141
    Report by the National Association of Boards of Pharmacy,
      ``Serial Number Decommissioning Pilot Report''.................   153
    Report by ASOP Global Foundation, ``Americans' Perception and Use
      of Online Pharmacies,'' 2023...................................   164
    Report by the National Association of Boards of Pharmacy,
      ``RogueRx Activity Report-Injectable Weight Loss Drugs: How
      Illegal Online Drug Sellers Are Taking Advantage of Patients''.   176
    Statement of Premier Inc., June 11, 2025.........................   188
    Letter of June 11, 2025, from Brian Lehman, Pharmacist, to Mr.
      Carter of Georgia, et al.......................................   195
    Letter from Eric Axel, Executive Director, American Medical
      Manufacturers Association, to Mr. Carter of Georgia and Ms.
      DeGette........................................................   198
    Statement of Lynn M. Schuchter, Chair of the Board, Association
      for Clinical Oncology, June 11, 2025...........................   200
    Statement of the Alliance for mRNA Medicines.....................   203

         MADE IN AMERICA: STRENGTHENING DOMESTIC MANUFACTURING AND THE
                            HEALTHCARE SUPPLY CHAIN

                                  ----------

                            WEDNESDAY, JUNE 11, 2025

                      House of Representatives,
                                Subcommittee on Health,
                              Committee on Energy and Commerce,
                                                        Washington, DC.
        The subcommittee met, pursuant to call, at 10:02 a.m., in
    the John D. Dingell Room 2123, Rayburn House Office Building,
    Hon. Earl L. ``Buddy'' Carter (chairman of the subcommittee)
    presiding.
        Members present: Representatives Carter of Georgia,
    Griffith, Bilirakis, Dunn, Crenshaw, Joyce, Balderson,
    Harshbarger, Miller-Meeks, Cammack, Obernolte, James, Bentz,
    Houchin, Langworthy, Kean, Guthrie (ex officio), DeGette
    (subcommittee ranking member), Ruiz, Dingell, Kelly, Barragan,
    Schrier, Veasey, Fletcher, Ocasio-Cortez, Auchincloss, Carter
    of Louisiana, Landsman, and Pallone (ex officio).
        Staff present: Jessica Donlon, General Counsel; Sydney
    Greene, Director of Finance and Logistics; Jay Gulshen, Chief
    Counsel, Health; Emily Hale, Staff Assistant; Annabelle
    Huffman, Clerk, Health; Megan Jackson, Staff Director; Sophie
    Khanahmadi, Deputy Staff Director; Brayden Lacefield, Special
    Assistant; Molly (Brimmer) Lolli , Counsel, Health; Sarah
    Meier, Counsel and Parliamentarian; Joel Miller, Chief Counsel;
    Jake Riith, Staff Assistant; Jackson Rudden, Staff Assistant;
    Chris Sarley, Member Services/Stakeholder Director; Emma
    Schultheis, Policy Analyst, Health; Matt VanHyfte,
    Communications Director; Katie West, Press Secretary; Lydia
    Abma, Minority Policy Analyst; Sam Avila, Minority Health
    Fellow; Jacquelyn Bolen, Minority Counsel; Keegan Cardman,
    Minority Staff Assistant; Waverly Gordon, Minority Deputy Staff
    Director and General Counsel; Tiffany Guarascio, Minority Staff
    Director; Una Lee, Minority Chief Counsel, Health; and Destiny
    Sheppard, Minority Intern.
        Mr. Carter of Georgia. The subcommittee will come to order.
    The Chair recognizes himself for 5 minutes for an opening
    statement.

         OPENING STATEMENT OF HON. EARL L. ``BUDDY'' CARTER, A
          REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

        Welcome, everyone.
        Today's hearing is critical in addressing our Nation's
    reliance on adversarial countries for essential medications and
    healthcare products. This dependence not only jeopardizes our
    national security and patient safety but also highlights the
    urgent need to increase domestic and friend-shored
    manufacturing.
        Let me be clear: The United States should never be
    dependent on the Chinese Communist Party for the antibiotics
    and essential medicines. But that is exactly the dangerous
    position we are in today.
        In 2002, the United States manufactured 72 percent of the
    pharmaceuticals it consumed. By 2023, that number had dropped
    to just 37.5 percent. We didn't just outsource manufacturing--
    we outsourced the sovereignty and safety of our healthcare
    system.
        We saw the impacts of this reliance firsthand during the
    COVID-19 pandemic. According to a conversation I had with the
    Administrator for Strategic Preparedness and Response, or ASPR,
    under the Trump administration, the United States saw a
    downtick in the amount of PPE and pharmaceuticals coming to our
    country from China in the fall of 2019--in the fall of 2019. We
    didn't learn about COVID until January of 2020. They knew what
    was going on. They started hoarding this stuff and not sending
    it to us.
        China knew there was an unidentified sickness in its own
    country. They concealed it, and then they withheld medical
    supplies so the United States was less prepared when COVID-19
    hit our shores.
        As both a pharmacist and a Member of Congress, I know how
    critical these medicines and supplies are, especially for our
    national security. Under the Biden-Harris administration, over
    323 drugs were in shortage during the first quarter of 2024, an
    all-time high, and cancer patients were often forced to switch
    treatments, adjust dosage regimens, or, in extreme cases,
    unable to receive their life-saving medications. There was no
    comprehensive effort to support American manufacturers or
    reduce our reliance on foreign supply chains.
        That is simply unacceptable.
        Thankfully, President Trump is taking meaningful action by
    demanding real investment in our domestic production base and
    putting it into decades of failed ``America Last'' policies
    that left our supply chains hollowed out and put our patients,
    constituents, and families at risk.
        Under the leadership of President Trump, we are bringing
    manufacturing back to America. Since the start of this year,
    the start of President Trump's second term, Johnson & Johnson
    broke ground on a new $2 billion facility in North Carolina,
    Amgen announced a $900 million manufacturing expansion in Ohio,
    AbbVie committed $10 billion to invest in the United States,
    and Sanofi announced plans to invest at least $20 billion.
        And these are just a few examples. This is just the start.
        I look forward to hearing from my other colleagues about
    the recent investments in their districts and States during
    this hearing today, and I am thrilled to see what additional
    investments continue to flow and thrive under an administration
    focused on unleashing innovation and bringing capacities back
    home.
        Along those lines, I commend recent efforts by this
    administration to bolster domestic production. But we must do
    our part in Congress as well.
        This hearing will make it clear that more can be done to
    eliminate burdensome regulatory barriers, streamline processes
    that impede our competitiveness on the global stage, and
    establish the proper incentives to ensure we are creating the
    environment to allow innovation to flourish.
        It is no coincidence that Georgia, my home State, the
    number-one State in the Nation to do business, is home to Manus
    Bio, which has invested nearly $60 million and created over 100
    jobs with the acquisition of a new manufacturing facility in
    Augusta. We need more policies at the Federal level that mirror
    the progrowth examples we have in the State of Georgia.
        That is why House Republicans passed the One Big Beautiful
    Bill Act, which incentivizes domestic medical supply production
    by rewarding companies that build their products in America,
    like USAntibiotics, who is the last remaining end-to-end
    domestic U.S. manufacturer of amoxicillin, the most prescribed
    antibiotic in the country.
        This is about protecting American lives, empowering
    American workers, restoring American sovereignty, and
    reenforcing U.S. leadership in medical innovation.
        China is not our friend. Ladies and gentlemen, China is not
    our friend. Every product component that then turns into a vial
    of medicine or a piece of medical equipment that is made in
    China is a missed opportunity to strengthen our economy and
    protect our people.
        It is time to act. We need to view pharmaceutical and
    healthcare supply chain independence just as we are viewing
    energy independence.
        I am proud to stand with President Trump and all those
    committed to putting America first in our healthcare system,
    starting with the medicines we rely on every day.
        [The prepared statement of Mr. Carter of Georgia follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Carter of Georgia. I now recognize the gentlelady from
    Colorado, Representative DeGette, for 5 minutes for an opening
    statement.

     OPENING STATEMENT OF HON. DIANA DeGETTE, A REPRESENTATIVE IN
                  CONGRESS FROM THE STATE OF COLORADO

        Ms. DeGette. Thank you so much, Mr. Chairman.
        I do agree with you that China is not our friend. But,
    however, it is hard to take this administration seriously on
    this issue when they are firing hard-working public servants
    who support generic drug approvals, facility inspections, and
    initiatives that help companies make products in America,
    because that will just cause a longer delay.
        I do want to say the COVID-19 pandemic laid bare the
    challenges of our medical supply chain, but, unfortunately, Mr.
    Chairman, as you mentioned, our reliance on foreign supply
    chains for critical medical products has been a problem for
    decades, as you said, much longer since 2020.
        We have a system that is great at producing cheap generic
    drugs and basic supplies, but we do not have a system that is
    great at encouraging a resilient supply chain that we can
    always count on.
        I believe everybody in this room wants to be serious and
    come up with serious solutions to ensure a secure, reliable
    medical supply chain.
        During the COVID pandemic, everybody in the world needed
    the same products at the same time, and manufacturing was
    severely disrupted. The problems with COVID put this problem
    into sharp relief because there were too many single points of
    failure, there was an inability to quickly shift manufacturing
    to critical products, and, as you said, there was an
    overreliance on unreliable foreign countries among them. That
    has all been long simmering.
        So I think it is past time we work together to stop the
    endless cycle of shortages of critical medicines and ensure
    that we will have a reliable supply of medical products.
        This committee considered legislation last Congress to
    address the supply chain and how it relates to drug shortages.
    This includes legislation from the former chairwoman of this
    subcommittee, my predecessor, Anna Eshoo, to ensure that we
    better understand where the active ingredients for these drugs
    are coming from.
        The bill, the Drug Origin Transparency Act, is so important
    because only 12 percent of active pharmaceutical ingredients
    globally are made in the United States.
        We also, of course, need to reauthorize the Pandemic and
    All-Hazards Preparedness Act, one of the major tools we have to
    invest domestically in medical countermeasures.
        Some PAHPA-authorized programs, like the Biomedical
    Advanced Research and Development Agency, have made it possible
    for innovative manufacturers to help the American people
    prepare for public health emergencies.
        And I know I have friends on the other side of the aisle
    who are working very closely to try to get this PAHPA
    reauthorization into this committee for hearing and markup and
    onto the floor.
        And the Strategic National Stockpile can be used to help
    support domestic manufacturers and secure the supply chain by
    focusing on resiliency.
        Our hospitals can also be part of the solution. Hospitals
    are major medical supply purchasers, and they need to be at the
    table to encourage and reward domestic production and secure
    supply chains.
        But, frankly, as I mentioned, I am troubled by the
    discordance between this committee's other work this Congress
    and our work today on supply chains. For example, the more we
    squeeze hospitals, particularly rural hospitals, the less they
    will be able to do to spend a few extra dollars on buy
    American.
        If we kick off millions of people from Medicaid under the
    Republicans' reconciliation bill, that will result in an
    additional $42.4 billion in hospital uncompensated care costs
    in 2034.
        Let me say that again: If this bill actually passed the way
    it passed from this committee in the House, there would be an
    additional $42.4 billion in hospital uncompensated care costs
    in 2034. That would translate into hundreds of billions of
    dollars of care hospitals will have to swallow in the next 10
    years.
        I don't think that that is going to make hospital
    procurement offices more able to consider the source of the
    antibiotics they are buying. Instead, what it does is it makes
    them even more likely to go with the cheapest option regardless
    of where it came from or any downstream consequences.
        So I implore my Republican colleagues to consider all of
    the consequences of their Medicaid cuts, not just throwing 16
    million, or however many, people off of healthcare.
        A resilient supply chain will become less popular as we
    squeeze care for hard-working Americans, and especially rural
    and otherwise underresourced hospitals that provide us with
    that care.
        So I want to thank you again, Mr. Chairman, for having this
    hearing. And I will yield back.
        [The prepared statement of Ms. DeGette follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Carter of Georgia. The gentlelady yields.
        The Chair now recognizes the chairman of the full
    committee, Chairman Guthrie, for 5 minutes for an opening
    statement.

     OPENING STATEMENT OF HON. BRETT GUTHRIE, A REPRESENTATIVE IN
               CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

        Mr. Guthrie. Thank you, Chairman Carter and Ranking Member
    DeGette, for this hearing.
        I appreciate all the witnesses for being here today.
        During this hearing we will be hearing from expert
    witnesses regarding the current state of our supply chain and
    opportunities and challenges to strengthen our domestic
    manufacturing capacities and infrastructure.
        Efforts to bring capacity back home to the United States
    are critical to protecting our national security as well as
    ensuring access to safe, secure, and reliable medicines and
    healthcare products for Americans.
        Over the years, countries like India and China have
    continued to grow more influential in research, development,
    and manufacturing of medical products. Globally, this has led
    many countries, including the United States, to be reliant on
    international sources for the production of certain medicines
    and other health products and supplies.
        The reasons for this evolution are incredibly complex,
    involving both workforce and development and manufacturing cost
    considerations, differing incentive structures, strategic
    location selections, operational risk, as well as associated
    regulatory burdens or corresponding flexibility, just to name a
    few.
        While the reasons are complex, the staggering reality that
    our current domestic supply chain is largely reliant on
    international forces is remarkably clear, and one that we must
    address.
        According to recent data, about half of all the APIs, or
    active pharmaceutical ingredients, for prescription medicines
    in the U.S. come from India and the European Union. In
    addition, India controls the majority of production volume for
    most oral tablets and capsules.
        Meanwhile, China is an exclusive manufacturer of certain
    APIs and essential medicines while remaining a dominant
    supplier of key starting materials, the pieces of the puzzle
    that often go to contribute to API.
        Thus, it is fair to say the U.S. remains reliant on several
    international partners for many varied pieces of the supply
    chain that eventually come together to produce the products
    that land in our medicine cabinets, our doctors' offices, and
    are used in our hospitals.
        Our healthcare supply chain involves many components and
    important players, from the groundbreaking research to the raw
    material suppliers, product manufacturers and distributors and
    purchasers, all the way to the patient.
        We look forward to hearing from the experts in front of us
    today to provide their perspective and shed light on the
    nuances of this supply chain and the role their entities play,
    shed light on vulnerabilities, and discuss possible
    opportunities and solutions.
        With decreased reliance on China and other nations, we can
    help to foster a more sustainable, resilient, and predictable
    healthcare supply chain, bolstering our domestic manufacturing
    and promoting the safety of our medicines and the security of
    our country.
        It is important to remember the national advancements in
    medicine already being made right here at home. For example,
    from 2018 to 2022, the biopharmaceutical industry increased
    capital investments in their facilities, equipment, and
    infrastructure by more than 72 percent, more than $126 billion
    towards U.S. advanced manufacturing.
        To put this into perspective, the only industry who
    exceeded this was motor vehicles.
        In terms of innovation, the biopharmaceutical industry
    increased their research and development by more than 58
    percent at the same time.
        In fact, 46 percent of the 643 novel drugs that have been
    approved globally over the last decade are as a result of
    American companies' involvement in the discovery, patent, or
    clinical research process. This is twice as much as Europe.
        I look forward to hopefully hearing more about some of
    these district stories from members of the committee as well as
    our witnesses, and I look forward to having our witnesses
    testify today.
        And I yield back.
        [The prepared statement of Mr. Guthrie follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Dunn [presiding]. Thank you.
        I now recognize the ranking member of the full committee,
    Mr. Pallone, for 5 minutes for an opening statement.

    OPENING STATEMENT OF HON. FRANK PALLONE, Jr., A REPRESENTATIVE
                IN CONGRESS FROM THE STATE OF NEW JERSEY

        Mr. Pallone. Thank you, Mr. Chairman.
        Today committee Republicans want to discuss healthcare
    supply chains while the Trump administration is unleashing
    chaos and harm on our public health infrastructure.
        The latest dangerous action by this administration came on
    Monday when Secretary Kennedy fired all 17 medical experts of
    the Advisory Committee for Immunization Practices, the
    committee that advises our Nation on immunization practices.
        This action puts the health and well-being of the American
    people, especially our Nation's children, at extreme risk. It
    undermines vaccine safety and politicizes research and also
    politicizes science. And it is all being done so RFK, Jr., can
    stack the panel with a bunch of antivaccine people.
        And also on Monday, 342 of the top scientists at the
    National Institutes of Health signed a letter to the NIH
    Director detailing unprecedented waste, abuse, and illegality
    at NIH under the Trump administration.
        The letter also addresses the harmful consequences of these
    actions on our Nation's ability to improve and save lives
    through scientific breakthroughs.
        This was really an unprecedented action by these employees
    who must feel they have no other options at this point than to
    go public.
        Now, each of these actions warrants a hearing here in this
    committee, and yet Republicans on the committee remain silent,
    blindly following the Trump administration as it decimates our
    public health infrastructure.
        This committee has yet to hear from the Secretary of HHS.
    We have yet to hear from the NIH Director. I know Republicans
    plan a budget hearing with Secretary Kennedy later this month,
    but he has caused so much destruction at HHS already that one
    hearing focused on the budget is not going to be sufficient. He
    must answer separately for the dangerous actions he has taken
    to undermine vaccines.
        And rather than demanding answers of this administration,
    congressional Republicans are plowing ahead with their Big Ugly
    Bill that rips healthcare away from 16 million people so they
    can give giant tax breaks to billionaires.
        Committee Republicans want to talk about strengthening
    domestic manufacturing and the healthcare supply chain.
    However, it is difficult to have a discussion about the supply
    chain without acknowledging the disruption, confusion, and
    uncertainty that the Trump tariff policies have caused, as well
    as the deep budget cuts the administration has proposed to the
    FDA.
        I don't understand how congressional Republicans intend to
    square their desire to onshore manufacturing and bolster the
    domestic supply chain while eliminating nearly 2,000 jobs at
    FDA and proposing an 11 percent budget cut.
        FDA employees are the ones who inspect foreign and domestic
    manufacturing facilities, approve branded and generic drugs,
    and ensure that medical products are safe and accessible for
    the people who rely on them. FDA staff have said the layoffs
    have resulted in drug safety work being stalled and inspections
    falling behind.
        And that is the hearing we should be having. We should be
    conducting robust oversight on the implications of these
    actions, what it means in the short term for preparedness and
    response, what it means in the long term for American
    innovation and our ability to lead on a global scale. Both are
    threatened under the Trump administration's policies.
        And if Republicans are really interested in strengthening
    domestic manufacturing and the healthcare supply chain, they
    would work with Democrats to ensure FDA has the resources and
    authorities it needs to ensure the medical products Americans
    rely on are safe, effective, and available.
        FDA needs additional tools, resources, and authorities, not
    less, to address drug shortages and strengthen the supply
    chain.
        Now, last Congress, Democrats put forward several bills
    that would bring greater transparency and resiliency to the
    supply chain, but Republicans refused to act on them. They also
    walked away from a bipartisan reauthorization of the Pandemic
    and All-Hazards Preparedness Act after Elon Musk blasted the
    overall package it was included in.
        There is a lot of work to be done here, Mr. Chairman, to
    protect our supply chain, mitigate drug shortages, and ensure
    we are better prepared for the next pandemic.
        However, unless and until the Trump administration chooses
    to end its dangerous crusade against public health, against
    biomedical research and vaccines, it is not possible to do the
    things that supposedly this hearing is about with the supply
    chain.
        It is time that the administration and Republicans
    understand that these policies and solutions are all
    intertwined. You can't separate them. You can't talk about the
    supply chain and mitigating drug shortages and at the same time
    fire people at FDA, limit the resources that go to FDA, and all
    the other chaos that this administration is creating.
        And with that, I yield back the balance of my time, Mr.
    Chairman.
        [The prepared statement of Mr. Pallone follows:]
        [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

        Mr. Dunn. This concludes Member opening statements. The
    Chair would like to remind Members that, pursuant to committee
    rules, all Members' opening statements will be made part of the
    record.
        We want to thank all of our witnesses for being here today
    and taking time to testify before the subcommittee.
        Our witnesses today are Mr. Patrick Cashman, president,
    USAntibiotics; Mr. John Murphy, president and chief executive
    officer of the Association for Accessible Medicines; Dr. Ronald
    T. Piervincenzi, chief executive officer, United States
    Pharmacopeia; Ms. Dawn O'Connell, former Assistant Secretary
    for Preparedness and Response; and Mr. Josh Bolin, associate
    executive director, Government Affairs and Innovation, of the
    National Association of Boards of Pharmacy.
        Per committee custom, each witness will have the
    opportunity for a 5-minute opening statement, followed by a
    round of questions from Members. The light on the timer in
    front of you will turn from green to yellow when you have 1
    minute left.
        I now recognize Mr. Patrick Cashman for 5 minutes to give
    an opening statement.

     STATEMENTS OF PATRICK CASHMAN, PRESIDENT, USANTIBIOTICS; JOHN
    MURPHY III, PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION
    FOR ACCESSIBLE MEDICINES; RONALD T. PIERVINCENZI, Ph.D., CHIEF
    EXECUTIVE OFFICER, UNITED STATES PHARAMACOPEIA; DAWN O'CONNELL,
     FORMER ASSISTANT SECRETARY FOR PREPAREDNESS AND RESPONSE; AND
     JOSH BOLIN, ASSOCIATE EXECUTIVE DIRECTOR, GOVERNMENT AFFAIRS
       AND INNOVATION, NATIONAL ASSOCIATION OF BOARDS OF PHARMACY

                      STATEMENT OF PATRICK CASHMAN

        Mr. Cashman. Chairman Carter, Ranking Member DeGette,
    distinguished members of the subcommittee, thank you for the
    opportunity to speak today. My name is Patrick Cashman. I serve
    as president of Bristol, Tennessee-based USAntibiotics, which
    is the last remaining end-to-end U.S. manufacturer of
    amoxicillin.
        The facility I lead has supplied life-saving medicine to
    American patients for more than 40 years. Until 2008, every
    U.S. prescription of amoxicillin was produced at our Bristol
    plant. But after years of escalating subsidized competition
    from Indian and Chinese generic drugmakers, the facility's
    previous owners filed for bankruptcy in 2020. By the time our
    production lines went dark that year, the U.S. had become
    entirely reliant on foreign-origin amoxicillin.
        In 2021, USAntibiotics was rescued from bankruptcy by
    private American investors who recognized the national security
    imperative of antibiotic production. Since then, we have
    created new jobs, invested tens of millions of private capital
    into reactivating production lines, and reentered the
    commercial market.
        I feel privileged to play a role in this important story,
    and I look forward to sharing more with you about our
    experience.
        Without antibiotics, routine surgeries and common
    infections can become fatal. Our Nation's health security,
    military readiness, and emergency preparedness all hinge on
    reliable antibiotic access.
        Amoxicillin alone accounts for approximately 50 million
    U.S. prescriptions annually, making it the most prescribed
    antibiotic. After dropping to zero in market share in 2020,
    USAntibiotics now has about 5 percent market share.
        If our facility were to shut down permanently, it would
    take no less than 5 years and hundreds of millions of dollars
    to construct a new facility capable of producing amoxicillin.
    That would be at least half a decade in which the U.S. would be
    entirely reliant on other countries for the most commonly
    prescribed antibiotic.
        Our company and other U.S. generic drugmakers like us face
    three primary challenges:
        One, unfair foreign subsidies, labor practices, and lax
    regulatory oversight. One 2022 study found that a lack of
    Chinese and Indian regulatory enforcement allows their
    drugmakers to cut as much as 25 percent off their cost.
        Two, a lack of long-term government purchasing commitment.
    Most buyers prioritize cost over reliability or origin. Unlike
    defense contractors, which often operate under multiyear
    contracts, U.S. drugmakers of critical generic medicines are
    vulnerable to market fluctuations.
        Three, a lack of recognition for critical drugs' national
    security relevance. Generic antibiotics are not treated as
    strategic assets like weapon systems or critical minerals. This
    means manufacturers cannot access all of the same financing
    tools, tax incentives, or industrial base support programs
    available to other domestic producers of critical goods.
        Today, my colleagues in Bristol will manufacture
    approximately 700,000 doses of amoxicillin before their shift
    ends, but we operate on razor-thin margins. Despite our
    strategic importance, we receive no Federal subsidies, Federal
    prime contracts, or protection from predatory pricing.
        Since January 2023, the U.S. Government has spent $900,000
    on USAntibiotics products through the Federal Supply Schedule
    system. However, during roughly the same period, HHS spent
    approximately $40 million to purchase foreign-origin
    amoxicillin for the Strategic National Stockpile.
        To ensure the U.S. is never again dependent on China and
    India for amoxicillin, I humbly submit four policy
    recommendations for your consideration:
        One, incentivize long-term purchasing agreements. To
    establish predictable demand companies like USAntibiotics
    require to scale and grow, encourage Federal agencies to enter
    a multiyear contract with domestic producers of essential
    medicines.
        Two, implement domestic preference policies. The U.S.
    Government should establish a buy-American requirement for
    antibiotics purchased with Federal funds when a U.S.
    manufacturer exists.
        Three, create a strategic antibiotic manufacturing fund.
    Provide targeted grants, low-interest loans, and tax incentives
    to companies investing in domestic production.
        Four, enforce trade rules to counter predatory pricing. The
    Department of Commerce and USTR should leverage existing
    authorities to penalize unfair trade practices in the
    antibiotic sector.
        We support the ongoing Section 232 investigation regarding
    national security effects of imports of pharmaceuticals and
    pharmaceutical ingredients.
        USAntibiotics stands ready to play its part to secure the
    U.S. antibiotic supply chain for the 21st century. We have the
    infrastructure and we have the expertise. But we need this
    Congress to act.
        Thank you for the opportunity to testify. I look forward to
    your questions.
        [The prepared statement of Mr. Cashman follows:]
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        Mr. Carter of Georgia [presiding]. Thank you, Mr. Cashman.
        The Chair now recognizes Mr. John Murphy III for 5 minutes
    to give an opening statement.

                      STATEMENT OF JOHN MURPHY III

        Mr. Murphy. Chairman Carter, Ranking Member DeGette,
    members of the subcommittee, thank you for inviting me to
    discuss how we can strengthen domestic pharmaceutical
    manufacturing and secure our supply chain.
        My name is John Murphy, president and CEO of the
    Association for Accessible Medicines. We represent the
    companies that supply more than 90 percent of U.S.
    prescriptions to American patients while accounting for just
    over 13 percent of total U.S. drug spending.
        American families depend on affordable generic and
    biosimilar medicines. Yet the supply chain that delivers these
    medicines is under increasing pressure and in some parts is
    already fracturing.
        The total value of sales of generic and biosimilar
    medicines has stagnated for more than a decade, and the
    economic footprint of U.S. generics has shrunk by $6.5 billion
    over the past 5 years despite growth in volume and the
    availability of many new medicines.
        Production has increasingly evolved globally due to the
    competing economies seeking to bolster their own health
    security and access and the declining incentive structures and
    reimbursement potential here in the United States.
        To be more specific, four key challenges face our industry
    and its growth in the United States:
        We have no comprehensive national strategy or real
    incentives for production. The CHIPS Act, as an example,
    incentivized domestic manufacturing of semiconductors and
    showed what a bold industrial policy looks like.
        Reimbursement policies continue to underprice essential
    drugs. For sterile injectables in particular, a race-to-the-
    bottom competitive environment drives prices for indispensable
    medicines below sustainable levels and often rewards higher-
    price brands over generics.
        We have labor shortages. According to a recent HHS-
    sponsored report, the U.S. faces a shortage of workers with the
    requisite expertise to work in our sector, and more than half
    of specialized manufacturing jobs go unfilled.
        Slow permitting and regulatory barriers also add. It can
    take 5 to 7 years to build a new plant and 3 to 5 years to add
    a single production line.
        That is the bad news.
        The good news is that Congress can help. Congress can
    reverse these trends with commitments built on nine pragmatic
    steps:
        First, we should create guaranteed purchase contracts for
    essential medicines. Fixed-volume, fixed-price agreements,
    structured to encourage multiple suppliers, would give
    manufacturers the revenue certainty to build or reopen capacity
    here in the United States.
        Second, we should expand the Strategic National Stockpile
    to include finished drugs and other active ingredients.
        Third, fund grants to defray relocation and retrofitting
    costs of existing dormant capacity.
        We should provide targeted tax incentives. A 50 percent
    credit on capital costs for domestically producing essential
    medicines, a simplified 20 percent R&D tax credit, relief for
    bioequivalent studies and FDA user fees, and wage credits for
    U.S. production would narrow the cost gap with overseas labor
    and energy.
        We should streamline FDA regulatory review of new complex
    generics and biosimilars.
        We should look to invest in domestic API capacity. Many
    other countries, like Austria and South Korea, have invested
    heavily to support their own API production. The U.S. can and
    should pursue similar strategies that cluster suppliers and
    reduce barriers to scale.
        We should appropriate multiyear funding equal to the
    strategic value of medicines to the United States, comparable
    to commitments made in the CHIPS Act.
        We should look to curb anticompetitive brand patent tactics
    that delay generic entry by limiting serial patents and
    preserving the ability to reach procompetitive settlements.
        And last, we should reform Medicare and PBM practices that
    steer patients to higher price brands and protect prolonged
    brand monopolies.
        These measures are not theoretical. They mirror the tools
    that secured domestic production of semiconductors and personal
    protective equipment. Applying them to medicines will expand
    U.S. manufacturing, enhance national security, and preserve
    access to affordable treatments for every patient.
        Let me close with two realities.
        First, the United States has dormant capacity. With the
    right incentives, existing facilities can restart lines faster
    than we can build new plants.
        Second, rebuilding resilience will require some patience.
    Capital investments, ingredient qualification, validation, and
    FDA inspections take time. But the sooner we begin, the sooner
    patients, hospitals, and our military will benefit.
        Generic and biosimilar medicines are not just cost savers,
    they are lifelines. With strategic, sustained support, we can
    reenforce that lifeline at home, reduce reliance on any single
    foreign source, and create skilled jobs across our communities.
        I appreciate the subcommittee's attention to this urgent
    issue and look forward to working with you to turn these
    proposals into law.
        Thank you.
        [The prepared statement of Mr. Murphy follows:]
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        Mr. Carter of Georgia. Thank you, Mr. Murphy.
        The Chair now recognizes Dr. Ronald Piervincenzi. Is that
    pretty good?
        Dr. Piervincenzi. That is pretty good. Thank you.
        Mr. Carter of Georgia. You know, I try to get staff to get
    Smith and Jones, but they get all these other people here. So I
    have directed them, ``Don't have any witnesses unless it is a
    Smith or a Jones.''
        [Laughter.]

               STATEMENT OF RONALD T. PIERVINCENZI, Ph.D.

        Dr. Piervincenzi. Thank you, Chairman Carter, and thank
    you, Ranking Member DeGette, members of the committee, for this
    opportunity to provide testimony on strengthening the domestic
    manufacturing and the healthcare supply chain.
        I am Ron Piervincenzi, chief executive officer of the
    United States Pharmacopeia, better known as USP.
        USP is an independent scientific global nonprofit
    organization founded on January 1 of 1820 when 11 physicians
    concerned about patient safety and poor-quality imported
    medicines from England came together to create the first
    national pharmacopeia in the world.
        Today, USP works with hundreds of independent experts to
    set 6,000--over 6,000 quality standards for the entire medicine
    supply, including dietary supplements--and also their
    ingredients, importantly. In addition, we have developed
    verification services to ensure the quality of ingredients, a
    program to test the quality of pharmaceutical products from the
    marketplace, and initiatives to accelerate adoption of advanced
    pharmaceutical manufacturing technologies.
        All of this work is in service of USP's mission to help
    strengthen the global supply chain so that medicines people
    rely on are available when needed and meet quality standards as
    expected and required.
        USP launched an ambitious initiative in 2019 to map and
    analyze the global medicine supply chain. The resulting data
    platform, known as the Medicine Supply Map, now tracks 94
    percent of U.S. drug products and ingredients wherever they are
    manufactured in the world. It identifies vulnerabilities in our
    supply chain and helps guide smarter investments by both the
    private sector and, hopefully, targeted interventions by
    policymakers.
        So what have we learned from this extensive mapping?
    Globalization has indeed enabled the manufacture of generic
    medicines at lower cost, but it has clearly made our supply
    chains longer, more fragmented, and more opaque.
        So a few facts:
        Over 80 percent of key ingredients and raw materials used
    in U.S. medicines are manufactured abroad today, and many in
    just a handful of locations. India supplies more than a third
    of all U.S. prescription drug APIs. But China's API filings
    have risen 63 percent just over a 2-year period from 2021 to
    2023, now comprising a third of new global filings on a go-
    forward basis.
        This geographic concentration is one key driver of
    vulnerability.
        Using our data, USP has identified 100 vulnerable medicines
    that are both at high risk for disruption and difficult to
    substitute therapeutically. Pharmacists will understand that
    one.
        Right now, the supply of our most essential medicines,
    nearly all of which are generics, remain highly sensitive to
    geopolitical tensions, disasters, pandemics, and, importantly,
    market dynamics that drive often the most reliable
    manufacturers to exit the market for individual drugs.
        The result is an increasingly fragile supply chain that
    jeopardizes not just patient care but national security.
        To reduce these risks and improve resiliency, we have
    identified four key recommendations which can also serve as
    pillars to guide Congress' support for domestic manufacturing:
        The first is to continuously identify the Nation's most
    vulnerable medicines, to leverage that data to pinpoint the
    factors most responsible for supply risk, and target
    interventions where the data shows the risk is most imminent.
        The second is supporting the innovation in U.S.
    manufacturing technologies, reducing the barriers for new novel
    methods for producing pharmaceutical ingredients, including key
    starting materials as well as APIs.
        The U.S. is actually quite well positioned to lead on
    breakthrough technologies, including advanced manufacturing,
    and to find alternative synthesis pathways for those APIs. That
    can help reduce our reliance on overseas suppliers and enable
    us to domestically manufacture medicines and their ingredients
    more efficiently and more competitively.
        A third is to establish a resiliency benchmark for the
    purchase of vulnerable medicines. We must rethink how we value
    essential generic drugs, which account for more than 90 percent
    of medicines that Americans rely on but represent less than 20
    percent of our spending on medicines.
        USP and other stakeholders have proposed establishing a
    resilience benchmark to help shift the paradigm to empower and
    incentivize public- and private-sector purchasers to value
    resiliency and predictability.
        Fourth, expand the supply chain visibility by leveraging
    tools like the USP Medicine Supply Map. Expertise like this is
    essential to unravel complicated supply chains and provide the
    risk management intelligence. We can pinpoint vulnerabilities
    so that we can also pinpoint solutions.
        The fragile supply chain is a problem we can and should
    solve, and with confidence. In fact, we must work to forge a
    more resilient, adaptable, and secure future for America's
    medicine supply because the well-being of millions of people
    and our Nation's security does depend on it.
        USP thanks the committee for convening this discussion on
    this urgent issue that affects so many of my fellow Americans
    and their healthcare providers.
        I look forward to answering your questions. Thank you.
        [The prepared statement of Dr. Piervincenzi follows:]
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        Mr. Carter of Georgia. Thank you, sir.
        The Chair now recognizes Ms. Dawn O'Connell for 5 minutes
    for an opening statement.

                      STATEMENT OF DAWN O'CONNELL

        Ms. O'Connell. Thank you, Chairman Carter and Ranking
    Member DeGette. I am pleased to have this opportunity to
    testify before you today on the need to strengthen domestic
    manufacturing and the public health and medical supply chain.
        I served in the previous administration as the Assistant
    Secretary for Preparedness and Response. My job was to help the
    country prepare for, respond to, and recover from public health
    emergencies and disasters.
        Much of this work was focused on making sure the country
    had the tools it needed to respond to whatever emergency was at
    hand. As a result, having a resilient public health and medical
    supply chain was always a concern of mine, but over the last 4
    years it became a mission.
        We must never forget what Ranking Member DeGette mentioned,
    those early days of COVID when the whole world needed the exact
    same medical supplies at the exact same time, and most of them
    were manufactured somewhere else.
        The Strategic National Stockpile had limited stores of
    usable PPE, the last pieces purchased 10 years prior during the
    H1N1 outbreak. Also, the amount of PPE manufactured in the
    United States was limited, and much of it was manufactured just
    in time with little surge capacity.
        As a result, our frontline healthcare workers were forced
    to wear garbage bags and used empty soda bottles for PPE.
        When I began my work at ASPR in 2021, two things were clear
    to me.
        First, we needed enough supplies in the Strategic National
    Stockpile to get the country through the first 90 days of an
    emergency.
        And second, we needed a manufacturing base in the United
    States with enough capacity that could quickly ramp up to meet
    demand after those first 90 days.
        And so we got to work.
        The first Trump administration began the work of investing
    in domestic manufacturing of critical PPE and medical supplies.
    We continued that work when we came in.
        And over the course of the COVID response across both
    administrations, ASPR invested in the domestic manufacture of
    masks, gloves, gowns, tests, as well as ancillary equipment,
    such as swabs and vials.
        Under my leadership, I established ASPR's supply chain
    office to manage our domestic manufacturing efforts. I elevated
    the Strategic National Stockpile to direct report to me, and I
    restocked its depleted shelves with domestically manufactured
    supplies whenever possible.
        As the country emerged from the acute COVID PPE and medical
    supply shortages, our team expanded its efforts to invest in
    the domestic manufacturing of active pharmaceutical ingredients
    and key starting materials for the medicines that are most
    needed in public health emergencies.
        Expanding the healthcare manufacturing base in the United
    States takes time, attention, and a coordinated effort across
    the Government. We ran into several challenges that ASPR and
    HHS alone could not solve but required the support and
    engagement of other parts of government.
        And despite our efforts, some of the companies we invested
    in were unable to survive the waning demand for PPE that
    quickly followed the ending of the acute phase of the COVID
    response.
        But despite these challenges, I think we have an
    opportunity. The previous two administrations initiated much of
    their supply chain work during times of emergency and acute
    shortage. There is an opportunity now that we are not in a
    crisis to take a look at what has worked and what has not and
    consider a comprehensive framework for securing our public
    health and medical supply chain.
        This framework should first clearly identify: What is the
    public health and medical supply chain? What is in it that
    needs to be available and ready to use on day one of an
    emergency?
        It should promote investment in the domestic manufacture or
    near-shoring of whatever those products are.
        It should have a strategy to ensure there is a market for
    those products in both peacetime and times of emergency.
        And the strategy should take into account government
    incentives, thoughtfully applied tariffs, and stockpiles of
    vendor-managed inventory, and it should build enough domestic
    manufacturing that manufacturers can surge production quickly
    in times of emergency.
        Ensuring a resilient and secure domestic supply chain is a
    nonpartisan issue. In fact, it is a place, despite deep
    partisan divisions around public health, where both the Biden
    and first Trump administrations found agreement.
        We owe it to our frontline healthcare workers to make
    progress on this important issue before the next public health
    emergency so they never have to wear garbage bags for PPE
    again.
        Thank you, and I look forward to your questions.
        [The prepared statement of Ms. O'Connell follows:]
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        Mr. Carter of Georgia. Thank you, Ms. O'Connell.
        The Chair now recognizes Mr. Josh Bolin for 5 minutes to
    give an opening statement.

                        STATEMENT OF JOSH BOLIN

        Mr. Bolin. Health Subcommittee Chairman Carter, Ranking
    Member DeGette, members of the subcommittee, thank you for the
    opportunity to testify today about the state of the U.S. drug
    supply chain.
        NABP is a 501(c)(3) nonprofit association that for over 120
    years has protected public health by assisting our member
    boards of pharmacy in all 50 States that have the
    responsibility for regulating the practice of pharmacy as well
    as the prescription drug supply chains within their States.
        With my testimony today, I will highlight some of the
    emerging safety threats to both the regulated and unregulated
    supply chains for products as they move closer to patients.
        As the subcommittee is aware, the Drug Supply Chain
    Security Act passed into law in 2013 and provided a phased
    window of implementation for the pharmaceutical supply chain to
    achieve interoperable data sharing and electronic tracing of
    products to prevent dangerous products from reaching patients.
        The DSCSA provides essential tools that trading partners in
    the supply chain and State and Federal regulators can utilize
    to detect unsafe medications.
        First, products now have to be serialized down to the
    individual saleable unit, meaning that there is a unique
    identifier for each product, and product packaging contains a
    2D barcode that can be scanned.
        Once the product is scanned, trading partners and
    regulators can ask about the legitimacy of that product's
    identifiers or who owned that product previously.
        The U.S. supply chain now generates 16 to 20 billion
    transactions per year, and given this massive amount of data,
    NABP started working with our member boards of pharmacy and all
    sectors of the supply chain to conduct pilots that led to the
    development of Pulse by NABP, which is NABP's digital platform
    for DSCSA that we launched in January.
        The best way to think about Pulse is that it is a directory
    for all the manufacturers, distributors, and pharmacies in the
    supply chain as well as all the products that move through the
    supply chain.
        Utilizing Pulse, regulators and trading partners can scan
    the 2D barcode of a product and ask questions of trading
    partners about that product.
        NABP is providing the tools to our members and to every
    pharmacy in the supply chain at no cost. We are doing so
    because the tools of DSCSA only work if they are accessible and
    easy to use.
        We rolled out Pulse to our member boards in mid-January,
    and as it happens, the very first scans that were conducted out
    in the field utilizing Pulse helped the Arkansas and
    Mississippi Boards of Pharmacy in identifying illegitimate and
    counterfeit GLP-1 medications that had actually made their way
    into our legitimate supply chain.
        From a congressional perspective, DSCSA worked, but it
    illustrated that our supply chain is still susceptible to
    illegal actors.
        Since January, we have nearly 30 States utilizing the tool,
    and not just boards of pharmacy but other regulatory
    authorities, such as attorneys general and Drug Enforcement
    Administration field offices.
        While we have made progress, and implementation of DSCSA
    helps, we still face challenges and threats to supply chain
    security.
        First, regarding medications offered over the internet.
    NABP has a host of resources we can share about the dangers of
    purchased medications over the internet.
        But our primary highlight is that in that work we estimate
    that 96 percent of online pharmacies in operation at any given
    time are illegal and in violation of State and Federal law. And
    research shows that the majority of Americans falsely believe
    that websites offering prescription medications have been
    approved by the FDA or by the boards of pharmacy. People
    increasingly trust that medications on the internet are safe
    and regulated, but, unfortunately, that is not always the case.
        Second. NABP's members have flagged a disturbing trend in
    the loosely regulated space of med spas. For example, one State
    board uncovered an operation where a med spa had been set up in
    an individual's home where compounding--and I use that
    loosely--or mixing of purported GLP-1 medications with vitamin
    B12 in their bedroom, hardly a sterile environment.
        The med spa was compounding, using active pharmaceutical
    ingredient that was obtained not from an FDA-registered API
    manufacturer but from an international online source
    advertising cheap weight loss APIs. The med spa simply mixed
    these ingredients, drew it up in syringes, and then mailed them
    to individuals in plastic bags.
        This is just one example from a State that actually has
    authority to regulate these types of entities. And,
    unfortunately, we know activities like this are going on in
    every State, but most State boards lack the authority to
    actually do anything about it.
        So while there are absolutely legitimate sources for
    obtaining medications over the internet, unfortunately, bad
    actors are using internet platforms to peddle medications,
    putting profits over safety. And to be clear, legitimate
    compounding plays an essential role in our supply chain to
    ensure patients have access to medications they need that
    aren't commercially available.
        But those that are simply mixing medications in their
    bedroom or in their bathroom in nonsterile environments and
    calling it "compounding" are a threat to legitimate practice.
        Given the popularity of certain medications, those who
    believe they can make a dollar over demand for a popular
    medication will do so irrespective of the harm it causes to
    patients.
        I would like to once again thank the committee for their
    time and attention. I will look forward to your questions.
        [The prepared statement of Mr. Bolin follows:]
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        Mr. Carter of Georgia. Thank you, Mr. Bolin.
        And thank all of you for your testimony.
        We will now begin questioning, and I will recognize myself
    for 5 minutes of questioning.
        As has been established here already, America has found
    itself entrenched in an issue that poses a threat to our safety
    and our national security. China has become our pharmacist. I
    practiced pharmacy for almost 40 years. Now I have been
    replaced by China.
        Seriously. China has become our pharmacist. China decides
    whether Americans have the prescription and over-the-counter
    drugs we need to get and stay healthy.
        That is why we are having this hearing today, so that we
    can examine the policies that bolster our domestic
    pharmaceutical supply chain.
        Before our committee today is USAntibiotics, who is the
    only--the only--U.S. manufacturer of amoxicillin and Augmentin.
        Based in Bristol, Tennessee, USAntibiotics operates a
    world-class antibiotic production facility with the sole focus
    of affording patient access to quality life-saving medications
    and antibiotics, securing critical domestic supply chains, and
    creating good-paying jobs.
        Despite USAntibiotics' critical importance to our supply
    chain and national security, previous administrations didn't
    prioritize these American-made products. In fact, previous
    administrations prioritized foreign-sourced amoxicillin over
    American-made amoxicillin.
        Thankfully, President Trump has prioritized American-made
    medicines and issued an Executive order promoting American-made
    pharmaceutical manufacturing to reduce our reliance on
    adversarial countries.
        Mr. Cashman, in your testimony you mentioned that we should
    treat generic drugs the same way as we treat military weapons
    systems or critical minerals. Can you explain the rationale for
    that?
        Mr. Cashman. Thank you, Chairman Carter.
        Yes, absolutely. Approximately 45 percent of the global
    amoxicillin API production----
        Mr. Carter of Georgia. Can you bring that microphone closer
    to you?
        Mr. Cashman. Excuse me.
        Approximately 45 percent of the global amoxicillin API
    production capacity is concentrated in China. Even though China
    isn't the leading global exporter of our finished form of
    amoxicillin, they supply upwards of 70 percent of the
    amoxicillin API that Indian drugmakers use.
        In addition, one should note that 80 percent of the key
    starting materials used for the production of API, amoxicillin
    API, is also produced in China.
        So China has a stranglehold on amoxicillin production
    globally.
        Mr. Carter of Georgia. Let me ask you something. There was
    a study done in 2025 that found that Indian-made generics were
    54 percent more likely to cause severe adverse effects than
    made-in-America drugs.
        Can you describe any documented quality differences between
    domestic- and foreign-manufactured antibiotics?
        Mr. Cashman. Yes. In this study that was done by Ohio State
    that you mentioned, Chairman Carter, 54 percent effect was--
    there were 54 percent more severe adverse events in medications
    from China than medications--the same--very same medications
    produced in the United States.
        In addition, there have been cases of contamination with
    carcinogens. In 2019, there was a case of carcinogens being in
    blood pressure medications. And there have been numerous other
    situations like this.
        Mr. Carter of Georgia. And this is one thing we want to
    look at in the future on this committee as well--on this
    subcommittee and this committee--and that is the FDA
    investigating and looking at these foreign manufacturers.
        If Congress would act on the recommendations today, how
    quickly could we--could our domestic capacity expand? If we
    were to act on this, how quickly could we get this up and
    running?
        Mr. Cashman. With the right policy framework, we could
    significantly expand production within 18 to 24 months. And let
    me explain that a little bit.
        We are currently running three active production lines. We
    have two crews on first shift and another crew on second shift.
    By simply adding new crews, adding shifts, so we can have three
    shifts per day on each line, we could dramatically increase our
    production.
        In addition, we have over 11 production lines--or excuse
    me--nine production lines. So we can add additional new
    production lines as well.
        So in a time period of 18 to 24 months, we could increase
    our production significantly.
        Mr. Carter of Georgia. So can we work with our allies to
    reduce dependence on China without going totally domestic? I
    mean, friend-shoring, offshoring, that would help as well,
    correct?
        Mr. Cashman. Absolutely that would help. But we have to
    keep in mind here that in working with our allies, that many of
    them have supply chain vulnerabilities as well. They don't have
    the capacities to supply all of the U.S. market as well as the
    European market, for example.
        Mr. Carter of Georgia. Right.
        Mr. Cashman. So those are situations we have to look at
    each specific case.
        Mr. Carter of Georgia. OK.
        I am out of time. Thank you very much for that, Mr.
    Cashman.
        I now recognize the ranking member of the subcommittee,
    Representative DeGette, for 5 minutes of questioning.
        Ms. DeGette. Thank you so much, Mr. Chairman.
        Well, I have got to say, we are all alarmed about this
    issue. I was alarmed to find out that my local hospitals didn't
    have IV fluids and other essential medications. And we can
    easily see how tenuous this makes our whole healthcare system.
        So I want to start with you, Dr. Piervincenzi.
        In the 2025 Annual Drug Shortages Report, the USP
    identified four factors that contribute to and drive medication
    shortage. Can you briefly restate what those risk factors are?
        Dr. Piervincenzi. Thank you, Ms. DeGette. I appreciate that
    question.
        So the report did a retrospective analysis of that broad--
        Ms. DeGette. And what the four--briefly--what were those
    four areas?
        Dr. Piervincenzi. Yes. So first was price. And by first, I
    mean the thing that was most highly correlated to supply
    disruptions. In this case, of course, low price for generic
    drugs, too low of a price.
        The second was quality. In this case, it was quality
    disruptions. Bad inspections, poor quality medicines that
    resulted in discontinuities.
        Third was geographic colocation. So this has different
    factors, including geopolitical, but also, of course, weather,
    weather events. We are familiar with many examples.
        And the--excuse me--on the fourth--oh, and of course
    complexity. You were mentioning the IV bags. The higher the
    complexity, the more things that can go wrong. So,
    unsurprisingly, that becomes also highly correlated.
        Ms. DeGette. Right.
        Dr. Piervincenzi. Now, the last thing I will say is that
    the four factors aren't independent, meaning any one of those
    perhaps might be OK, but it is when they come together is when
    you have really serious risk.
        Ms. DeGette. When they all work together.
        So does USP call for deregulating domestic pharmaceutical
    manufacturing as a solution?
        Dr. Piervincenzi. Deregulating?
        Ms. DeGette. Deregulating as a solution. That is not in the
    four factors you talked about.
        Dr. Piervincenzi. Oh. I am sorry. Yes.
        So the U.S. FDA's inspections are critical. And we talked
    about a couple of the factors, including quality. The assurance
    of quality is one of those factors. So deregulating the quality
    would, I think, work against the----
        Ms. DeGette. So that is not one of your recommendations.
        And what about reducing inspections domestically? Would
    that help, if we reduce domestic inspections?
        Dr. Piervincenzi. Would it help resilience?
        Ms. DeGette. Yes. Would it help solve these problems?
        Dr. Piervincenzi. So the FDA's role--and this is, we know,
    from working with our partners in industry--that strong
    inspections result in higher resilience.
        Ms. DeGette. Thank you.
        Now, so the reason I am asking you these questions, the
    Trump Executive order pretty much tells companies they can
    avoid inspections if they manufacture in the United States. But
    as you said, the FDA's involvement assures quality and safety,
    and thereby it averts drug shortages caused by subpar drugs.
        I want to move quickly to you, Ms. O'Connell.
        You are so right about replenishing the stockpile now
    instead of waiting, like we always do, until a crisis. And the
    chairman is nodding because he agrees with me.
        So I want to ask you, HHS recently canceled $766 million in
    contracts with Moderna to develop vaccines against influenza
    strains with pandemic potential, including the H5N1 avian flu.
        Moderna utilizes mRNA technology that has important
    advantages over older methods of vaccine development. This
    technology was developed over three decades with $337 million
    of Federal Government investment prepandemic. It saved millions
    of lives when Operation Warp Speed resulted in multiple safe
    and effective vaccines for COVID-19 in less than a year.
        So I want to ask you: Can you explain why the strengths of
    mRNA technology matter in a pandemic context?
        Ms. O'Connell. Absolutely. At this point, the mRNA platform
    is the only vaccine that we can use to meet our 100-day
    mission. Our biosecurity strategy requires that we are able to,
    at the first identification of an outbreak, have a vaccine
    ready to go.
        The mRNA platform, because it is very flexible and quick to
    manufacture, is the only platform at this point that will
    provide the country that protection within the first 3 months
    of an outbreak.
        Ms. DeGette. What would happen if we had a massive bird flu
    outbreak or other strain of influenza if we didn't have the
    mRNA platform?
        Ms. O'Connell. Well, at this point, we do have other
    vaccines--egg-based, cell-based--but they take 6 months to
    manufacture.
        Ms. DeGette. OK. And does Moderna have manufacturing
    capacity in the U.S.?
        Ms. O'Connell. They do.
        Ms. DeGette. OK. And does cancelling this contract help
    offshore the medical supply chain?
        Ms. O'Connell. No.
        Ms. DeGette. The Moderna contract? No.
        So I just want to say, is this platform, the mRNA platform,
    safe, and is it reviewed?
        Ms. O'Connell. Absolutely. It has been studied, as you
    mentioned, over 30 years, and it was licensed by FDA and been
    through several clinical trials in the process.
        Ms. DeGette. Under both----
        Ms. O'Connell. Absolutely.
        Ms. DeGette [continuing]. Under Republican and Democratic
    administrations?
        Thank you. I yield back.
        Mr. Carter of Georgia. The gentlelady yields.
        The Chair now recognizes the chairman of the full
    committee, Chairman Guthrie, for 5 minutes of questioning.
        Mr. Guthrie. Thank you. Thank you, Mr. Chairman. Thank you
    for yielding the time.
        And I just want to talk about advanced manufacturing
    technologies. Actually, I want to go back. I want to talk about
    H.R. 1 for a couple minutes.
        So, Mr. Cashman, H.R. 1 has several tax credits involved.
    Can you speak to the benefit of the provisions of the
    USAntibiotics specifically, and if the Senate were to pass the
    bill with these incentives in tax, how quickly could
    USAntibiotics expand production to serve more of the American
    market?
        Mr. Cashman. Thank you, Chairman Guthrie. Great question.
        I can only speak to the impact of specific limited
    provisions of the legislation on companies like ours.
        As stated, we serve only 5 percent of the U.S. amoxicillin
    market despite having capacity to scale to serve 100 percent.
    The immediate expensing of new product production equipment and
    facility improvements, as well as domestic R&D expensing
    provisions, could better position us to make capital
    investments. So it would help us.
        Mr. Guthrie. Thank you.
        And so, Mr. Murphy, would you explain how your member
    companies could use the provisions in H.R. 1 to move production
    back domestically?
        Mr. Murphy. Yes. Mr. Chairman, thank you for that question.
        We have often talked about the need to have tax credits and
    the ability to have flexibility in the tax code to make the
    investments necessary in the United States.
        I would say we have a significant amount of dormant
    capacity in the United States too that could be turned back on,
    which would require some capital investments to get things
    online. And our members have been very, you know, pleased to
    hear that there is more attention being paid to this sector of
    the market from a tax perspective that could help the industry.
        Mr. Guthrie. If you have open capacity, what is preventing
    the price, obviously--what is preventing you from expanding
    your capacity?
        Mr. Murphy. Yes. So I would say predominantly--and Dr.
    Piervincenzi said this as well--price in the generic market is
    the primary driver to make more investments. And we have a long
    history of working with this committee on solutions to that.
    But, ultimately, tax provisions help as well.
        Mr. Guthrie. But you have open domestic capacity.
        Mr. Murphy. We do. We do.
        Mr. Guthrie. Because there is a--I used to do supply chain,
    so it is not pharmaceutical but automotive, but--so you have a
    couple of things. One, if you are going to try to bring it
    back, you got to build a new plant.
        You are saying you can bring this back if the--without big
    capital investments. You don't have capacity--you have to do
    some, I get it, but you just need the right price signal to do
    it, which the tax code can help you get there.
        Mr. Murphy. The tax code can help, and then the price
    signal that, you know, we could work on with PBM reform and
    other areas that this committee has worked on could certainly
    help.
        But, yes, there is finish-fill capacity in the United
    States that could be turned on, and as Mr. Cashman said, would
    take, you know, far less than the 5 years that it would take to
    build a new facility.
        Mr. Guthrie. So, Mr. Cashman, you have the capacity as well
    or you would have to build new facilities to bring production
    back?
        Mr. Cashman. Yes, we have significant capacity. We have
    over 390,000 square feet, and we are using a fraction of that
    at this point.
        Mr. Guthrie. So being a supply chain person, as I just
    said, if somebody says, ``Hey, we are going to bring this back,
    it can be short term or long,'' you said you can do it pretty
    quickly if the right pricing or the right investment
    opportunity was there, right? Which the tax code gives you
    that.
        Mr. Cashman. Yes, Chairman Guthrie, with the right pricing
    and the right economic incentives, we can bring this production
    capacity back online.
        Mr. Guthrie. In your testimony, is the current--what we
    passed out of the House is sufficient for you to start making
    those decisions?
        Mr. Cashman. Well, Chairman Guthrie, I am an expert on
    production. I live and breathe producing amoxicillin. I believe
    it is going to be helpful to us to allow us to deduct these
    investments more quickly, yes.
        Mr. Guthrie. OK. Thank you. Yes, then if you--yes, the
    investment--and some of you just have capacity you have already
    invested, so that is a different animal. OK. I understand.
        So, Dr. Piervincenzi, I am looking at advanced
    manufacturing technologies. Could you provide some examples of
    how AMTs, or advanced manufacturing technologies, have been or
    could be utilized successfully to modernize and localize and
    stabilize your domestic production and, therefore, reduce our
    overseas dependence?
        Dr. Piervincenzi. Thank you, Chairman Guthrie. And I think
    this is a question that maybe goes to the second half, the
    first half being dormant capacity. But at some point that runs
    out.
        The next step is, how do we build new capacity? And I think
    that is where the advanced manufacturing comes into play, to
    create a system that produces even better, higher-quality
    medicines with a lower labor rate and a lower footprint, which
    gives it an advantage, especially in countries with higher
    income levels.
        The second piece to that is that where the U.S. lags the
    furthest behind is in API and then even more so in the key
    starting materials. And in those spaces, it is probably the
    only solution that would be able to domestically increase the
    production is through these advanced techniques. And they are
    advanced for pharmaceutical industry. They are not really
    advanced in the world. The automotive industry has been doing
    it for many decades now.
        And the last thing I would say is, where is it happening?
    It is happening with innovator medicines that have higher
    margins and able to make the capital investments. Where it is
    not happening is for generic drugs where we see the shortages.
        Mr. Guthrie. Right. Thank you.
        And my time has expired, and I yield back.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the ranking member of the full
    committee, Representative Pallone, for 5 minutes of
    questioning.
        Mr. Pallone. Thank you, Mr. Chairman.
        It is difficult for me to have a discussion about the
    medical supply chain in the midst of the chaos and destruction
    that the Trump administration and the Republican Big Ugly Bill
    is causing to our public health infrastructure.
        I mean, the chairman talks about how, you know, the Big
    Ugly Bill is going to help manufacturing more drugs, but the
    CBO says 16 million--more than 16 million Americans aren't even
    going to have health insurance. How are they going to buy any?
    How are they going to, you know, get any drugs or get any
    healthcare if they have no health insurance? So I don't
    understand--you know, these things are intertwined, and you
    can't talk about them separately.
        I wanted to ask the Former Assistant Secretary O'Connell,
    you noted in your testimony that bolstering domestic
    manufacturing requires highly competent Federal employees who
    understand both economics and healthcare.
        I had two questions. Why are highly skilled and trained
    Federal workers so critical to this mission, and impact--what
    impact does it have when that expertise and experience are
    lost? And, second, do the Federal layoffs make us more
    vulnerable to shortages or supply chain challenges?
        I have more questions, so briefly, if you will.
        Ms. O'Connell. Absolutely. Just to say that that is a
    highly specialized skill that we had within HHS to be able to
    understand market dynamics, economics, push/pull incentives
    across the health supply chain, and to have staff that
    understood both and are able to work across both and pick the
    right investments has been really important and a unique skill
    set that we were pleased to have in ASPR and is necessary.
        Mr. Pallone. Well, thank you, Ms. O'Connell.
        I would also like to briefly touch on the Hospital
    Preparedness Program, which is operated by ASPR and is one of
    the key preparedness programs typically reauthorized as part of
    the Pandemic and All-Hazards Preparedness Act. However, as I
    noted earlier, congressional Republicans walked away from an
    agreement to reauthorize PAHPA last year.
        Hospitals, obviously, play a key role in securing the
    supplies, medicines, and equipment necessary to care for
    patients--I guess that is pretty obvious--and they are
    important actors in the supply chain. However, in just another
    example of how the Trump administration is decimating public
    health, the fiscal year 2026 budget proposed to eliminate
    funding for the Hospital Preparedness Program.
        So, again, Ms. O'Connell, can you provide some examples for
    how HPP has been utilized in response to past public health
    emergencies and disasters, and what would be the impact of
    eliminating the Hospital Preparedness Program?
        Ms. O'Connell. Well, HPP is the only source of Federal
    funding that hospitals and healthcare coalitions have to be
    prepared, and they have used that funding to run exercises and
    to be prepared for hurricanes, for cyber attacks.
        We saw recently in October there was a case of Lassa fever
    that was imported to Iowa. The hospital, because it had its
    preparedness mechanisms in place, was able to contain the Lassa
    to the one patient, and it didn't spread throughout the
    hospital or into the community.
        So having hospitals that can identify challenging pathogens
    is critically important and to know how to respond in those
    times. And this healthcare funding, the HPP funding, is the
    only source of Federal funds that allows them to do that.
        Mr. Pallone. And, of course, I saw this vividly during the
    COVID epidemic, right. I mean, I literally--I am sure most
    members of this committee on both sides of the aisle spent so
    much time trying to, you know, get our hospitals so that they
    had the equipment, they had the, you know, supplies that were
    necessary which were in such shortage during COVID.
        And so, you know, this idea of having no Hospital
    Preparedness Program, to me, I can't imagine anything that is
    as destructive in the event of a natural disaster or another
    epidemic. I mean, to me, it makes absolutely no sense to have a
    level of preparedness.
        But, again, I go back to the same thing again. We are
    talking about the tax implications of this Big Ugly Bill and
    how they are going to provide more domestic manufacturing, but
    at the same time we are firing people who are going to run the
    programs. We are saying that we don't need our hospitals to be
    prepared.
        You know, what I don't understand--and I know I keep saying
    it over and over again--is these hearings--not that there is
    anything wrong with the hearing, but you have to recognize that
    these things are all intertwined, right. You can't say we are
    going to increase supply chains and domestic manufacturing when
    you don't have the people available to actually do the work,
    you know, to make sure that we are prepared.
        And I just--I just--I don't expect you to respond because I
    think you already have, but I just--I have to say, Mr.
    Chairman, I just don't understand how there is so much silence
    on the Republican side to all these concerns about people
    losing their health insurance and not being--hospitals not
    being prepared. Cuts that come from the Medicaid, Medicare, ACA
    cuts that are going to occur with this Big Ugly Bill.
        I yield back the balance of my time, Mr. Chairman.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the vice chair of the
    subcommittee, Dr. Dunn, for 5 minutes of questioning.
        Mr. Dunn. Thank you very much, Mr. Chair, and thank you to
    our witnesses for being here today.
        Over a 30-year career of medicine, I have become familiar
    with the complex healthcare supply chain that produces our
    essential drugs and products that Americans rely on. A reliable
    domestic supply chain not only serves to ensure the health of
    American people, it is a national security priority.
        As a member of the House Select Committee on China, I am
    very aware of the extent to which Americans become reliant on
    foreign entities to supply our country's medical needs. The
    Chinese Communist Party has made an intentional and coordinated
    effort to become a force in the biomedical production world.
        The United States has been a longstanding leader on
    research and development, and that did not happen by accident.
    It was driven by policy choices that reflect our values, that
    promote continued discovery. It is clear to me that those
    values also mean that the United States should be a leader in
    the production of those critical medicines. We must ensure that
    America remains at the forefront in biopharmaceutical
    manufacturing to protect our supply chain and bring American
    innovative cures to our patients in a safe and reliable manner,
    especially at a time when China is fast on our heels.
        Mr. Cashman, it seems to me that domestic antibiotic
    manufacturing should be a fundamental priority for this
    committee. I also believe that the Federal Government can play
    a role in ensuring a domestic supply of other critical
    products. I find it troubling that under the former
    administration the HHS made a $40 million award to a foreign
    amoxicillin producer when there was a domestic manufacturer
    available.
        In your experience, do Federal contractors appropriately
    take into account made in America when determining Federal
    awards?
        Mr. Cashman. Thank you, Vice Chairman Dunn. That is an
    excellent question. Let me respond to that.
        The focus is primarily on pricing by the Federal
    Government, but I think it is something that the Federal
    Government has to take a much broader view and look at security
    of supply, national security issues, and to ensure America has
    access to quality medicines made in the United States.
        So I think it is something that needs to be reevaluated,
    and perhaps put more emphasis on the sourcing of medications
    from manufacturers within this country.
        Mr. Dunn. By the way, I want to make a side comment here. I
    think the source is important, the supply chain is important,
    the control of it, but also the quality is. And I don't think
    we do enough independent--and I mean independent, third-party
    testing on all these products.
        I have seen reports on this--DoD is doing a study on it--
    that actually is pretty clever in showing some very wide
    disparities in quality, both quantitatively and qualitatively,
    in generic drugs that are produced by different manufacturers
    and are being sold legally--legally--in this country. So that
    is just a side comment.
        I also want to make a final comment, if I may, to Ms.
    O'Connell. Having previously served as the ASPR, the Assistant
    Secretary for Preparedness and Response, and the person in
    comment--rather, in charge of the Strategic National Stockpile,
    I am troubled, but it was your team in the Biden administration
    who chose not to support the last remaining end-to-end domestic
    manufacturer of amoxicillin.
        It is a story that I heard too many times during the last 4
    years in which it looks like we mismanaged the Strategic
    National Stockpile, repeatedly misaligned our contract
    decisions. And, honestly, I think the Office of ASPR repeatedly
    was slow in awarding Federal contracts to delays--you know,
    which leads to delays, unreliable supply chains for the
    manufacturers.
        And I believe our Federal agencies can play a critical role
    in ensuring that markets for the key medical products remain
    viable. I also believe it is necessary for our safety and our
    national security.
        I see my time is up. Mr. Chairman, I yield back.
        Mr. Carter of Georgia. The gentleman yields.
        The Chair now recognizes the gentleman from California, Dr.
    Ruiz, for 5 minutes of questioning.
        Mr. Ruiz. Thank you, Mr. Chairman.
        As an emergency medicine physician, it has always been my
    top priority in Congress to improve patient access to high-
    quality and affordable healthcare. We have made great strides
    towards this goal, but these efforts are moot if we cannot
    ensure a readily available supply of medications patients
    desperately need.
        In the emergency room, I have witnessed firsthand the dire
    implications that shortages of key medications have on the
    lives of my patients. For patients suffering from infections or
    trauma or fighting against cancer, this can be a matter of life
    and death.
        In fact, I remember times where we have a patient with
    respiratory distress after a trauma and we didn't have
    succinylcholine, a paralytic that we use to intubate a patient.
    And when you are used to using succinylcholine and have to use
    another drug that has a higher side-effect profile and more
    contraindications, then you have to think for a moment and take
    time to assess what you are doing. And in the emergency
    department, time is of the essence, as you all know. So it
    definitely creates complications.
        And even if medications are not in short supply,
    affordability remains a significant barrier to care, and safety
    is paramount. So that is why we need to act in order to
    strengthen the supply chain for critical medications. This
    includes bolstering domestic production, but it is crucial that
    we do so in a way that will not raise costs for patients and
    will not jeopardize the safety of these medications.
        It is important to think about geographic diversity in
    manufacturing. Let's remember the alarming impact on the
    availability of IV fluids back in late 2024 due to the critical
    damage the Baxter facility in North Carolina sustained during
    Hurricane Helene. Baxter supplies roughly 60 percent of the IV
    fluids used in North America. When just one manufacturing
    facility was damaged, supply was restricted and hospitals
    across the country faced shortages. And I remember speaking to
    desperate CEOs of the hospitals in my district very concerned
    about patient quality care during that shortage.
        Ms. O'Connell, can you share some lessons learned from your
    experience as Assistant Secretary for Preparedness and Response
    during the aftermath of Hurricane Helene, particularly with
    respect to the importance of geographic diversity and
    manufacturing critical medical supplies?
        Ms. O'Connell. Absolutely. Thank you, Congressman.
        So, of course, we were not invested in Baxter. Baxter was a
    private company. But when we were making investments in
    domestic manufacturing, we made sure that we had regional
    diversity in the investments that we made so we weren't putting
    the manufacturers of similar products in the same regions that
    could potentially be impacted by either a hurricane down South,
    ice storm up North, wildfires out West. It was critical that we
    had our investments spread out across the country. That was one
    of the things that we tried to do.
        When it came to Baxter, we did a couple of things. We
    helped them import their IV solutions that were manufactured in
    other parts of the world. We----
        Mr. Ruiz. So what can we do as legislatures to help----
        Ms. O'Connell. Right.
        Mr. Ruiz [continuing]. With the geographic diversity?
        Ms. O'Connell. So I think it would be important to
    encourage the private industry, those that we don't have levers
    with but that act on their own, to seek geographic diversity.
        I think Baxter would absolutely agree--I know they are not
    here today--that it would be important moving forward that they
    don't have just one plant manufacturing 60 percent.
        Mr. Ruiz. OK. So we have talked about the importance of
    geographic diversity and safeguarding medical supply chains,
    but how do we do that on American soil while also ensuring the
    safety and affordability of medications?
        So the answer is certainly not dismantling FDA and firing
    thousands of Federal workers that support key roles and
    responsibilities in ensuring the safety and efficacy of
    medications Americans rely on, like the Trump administration
    has done. The answer is not slashing protections and
    inspections to ensure the safety. And tariffs will raise prices
    on the components of the supply chain, vials and tubings, et
    cetera, which will raise prices.
        So the Trump administration is calling for looser
    regulations or weaker protections that are in place to keep
    patients safe within that executive order. Inspections and
    safety standards are vital to ensuring the safety of medicines
    we rely on.
        Mr. Murphy, do you believe that we should have fewer
    inspections of manufacturing facilities, and how does that lead
    to better quality? And does the Association for Accessible
    Medicines and your member companies want clear regulatory
    guidance from Federal regulators?
        Mr. Murphy. Thank you, Dr. Ruiz.
        We support a strong FDA with a strong inspections division.
    It provides certainty to the marketplace that there is quality
    built into the overall inspection process. And so we support
    FDA having more resources in the inspection space to do their
    work.
        Mr. Ruiz. And you do not support reducing the inspections?
        Mr. Murphy. Certainly, we--certainly, we understand that
    there are different priorities across the agency, but from an
    inspections standpoint, that is a very critical component of
    our work.
        Mr. Ruiz. Thank you. I yield back.
        Mr. Dunn [presiding]. The gentleman yields back.
        I now recognize the gentleman from Virginia, Mr. Griffith.
        Mr. Griffith. Thank you very much, Mr. Chair.
        Ms. O'Connell, a nitrile glove manufacturer in my district
    is aiming to create the first domestic facility to create both
    the base nitrile glove ingredients and production of the final
    nitrile glove.
        Their initial application was just for glove production,
    but it is my understanding from them that HHS and DoD
    encouraged them to expand their production capabilities to do
    both the final production of gloves and base ingredients for
    the glove manufacturer, which they did. However, HHS only
    provided a grant for a period of the expanded capabilities cost
    and has not provided additional assistance to help with the
    completion of the dual project, which is necessary for them in
    order to begin production.
        Does HHS not view it as their responsibility to see this
    project fully through?
        Ms. O'Connell. Thank you, Mr. Griffith.
        The investments in glove manufacturing were extraordinarily
    challenging. The grant that you mentioned was made by the first
    Trump administration, and they did it in accordance with an
    assisted acquisitions relationship they had with DoD.
        So DoD competed and then managed that contract. They set it
    up as a firm-fixed-price contract, which means as there were
    cost overruns in the development of the manufacturing site, no
    additional money could be added to that contract. DoD decided
    at the completion of the contract that it was done and
    complete, and if we were going to add additional money, we
    would have to recompete in an entirely new contract.
        We--and I think everybody is aware of this. I have come to
    Congress many times to talk about the funding that was needed
    in order to make those additional investments.
        At this point, the office that is managing our supply chain
    has $10 million identified in the next budget. That is not
    enough to be able to bring that glove manufacturing on board.
        Mr. Griffith. So you will work with me to figure out ways
    that we can get that plant finished? Because we have got this
    beautiful facility that is not finished, and therefore no jobs
    and no real asset for the community.
        All right. Thank you.
        I truly believe that having a real buy-American policy for
    government agencies on masks, gowns, and other PPE will
    stimulate American manufacturing and decrease the likelihood of
    shortages if we have another situation similar to COVID.
        Does any witness disagree with me on that? Raise your hand
    if you disagree. I will give you a minute.
        All right. I didn't think you would, and I do appreciate
    that.
        Again, Ms. O'Connell, as we have heard today, the U.S. is
    incredibly too reliant for active pharmaceutical ingredients
    from foreign countries, specifically China and India. This is a
    serious national security threat.
        One solution is from a company in the Richmond area named
    Phlow--P-H-L-O-W--who is in partnership with the Federal
    Government to bring the U.S. to a competitive advantage with
    foreign countries to produce fully domestic essential
    medicines.
        What other incentives and policies can be implemented to
    not only support these efforts but also encourage other
    companies to follow suit?
        Ms. O'Connell. Thank you, Congressman.
        So the Phlow contract is one that we spent a lot of time
    with and were very pleased with the outcome of what they have
    been able to do. I think that is a perfect example of some of
    the ways we need to work moving forward.
        Bringing the incentives there to Richmond was critical, and
    the proposal to have some sort of stockpile of those active
    pharmaceutical ingredients, I think, is something that the U.S.
    Government should pursue moving forward.
        Mr. Griffith. I appreciate that. I am going to switch gears
    a little bit on you. Has HHS considered starting a pilot
    program where they would ship close to expiring PPE, et cetera,
    in the national--in the Strategic National Stockpile to a rural
    hospital, so instead of throwing them away, we can actually get
    some benefit out of it?
        Ms. O'Connell. Well, we looked at that, and I think that is
    absolutely right. We are trying to encourage the SNS to think
    in innovative ways. Some of what we found was not everybody was
    interested in just-about-to-be-expired PPE. They wanted new
    PPE. But we continue to push on that.
        Of course, I am not in a position to make those decisions
    now but would, you know, encourage my former colleagues to
    consider it.
        Mr. Griffith. I appreciate that greatly.
        Mr. Cashman, it is great to see you again. While your
    operation is technically in Mrs. Harshbarger's district, I
    would suspect that at least 40 percent of your employees are
    probably living in my district since you are so close to the
    line that you could probably walk from your facility to my
    district without any great difficulty.
        At the meeting that we had previously, you mentioned how
    HHS awarded a company a contract that might not have been a
    fully domestic manufacturer. Can you explain that briefly,
    because my time is about up?
        Mr. Cashman. Congressman Griffith, effectively, yes, you
    could walk from our plant to Virginia.
        Yes--regarding that contract, yes, the best of our
    knowledge, we understand that that company imported API, active
    pharmaceutical ingredient, from China, and we don't know where
    it was manufactured, but it was effectively the only company
    that was awarded a contract for the SNS.
        Mr. Griffith. And you don't do that, is that correct? You
    don't import your API from China?
        Mr. Cashman. No, sir. We import our API from Europe. Thank
    you.
        Mr. Griffith. All right. I appreciate it. My time is up. I
    must yield back.
        Mr. Dunn. The gentleman's time has expired.
        And I now recognize the gentlelady from California, Ms.
    Kelly.
        Ms. Kelly. I am from Illinois, but thank you. I am
    Illinois.
        Thank you, Mr. Chair and Ranking Member DeGette, for
    holding today's hearing.
        The stability of our healthcare supply chain is not only an
    economic issue but one deeply tied to national security and
    public health. Health systems, providers, and patients alike
    have all felt the strain caused by the waves of drug shortages.
        Over the past decade, we have witnessed chronic
    underinvestment in public health infrastructure, notably during
    both of the Trump administrations. In 2019, the Strategic
    National Stockpile faced budget constraints even as warnings
    mounted about supply vulnerabilities.
        Now, in his second term, under his bill is an attempt to
    reduce Food and Drug Administration funding by $200 million.
    The Trump administration and RFK are actively undermining our
    ability to support supply chain resiliency by gutting the
    Federal workforce and dismantling key responsibilities within
    the FDA. This uncertainty poses a significant risk to the FDA's
    ability to effectively oversee critical functions and threatens
    the integrity of our healthcare supply chain.
        Ms. O'Connell, thank you for your work on equity and access
    to care during your time under the Biden-Harris administration.
        Apart from the devastating impact to America's R&D and
    innovation, how will cuts to our public health agencies impact
    our ability to strengthen our domestic supply chain and reduce
    our dependence on China, who is actively supporting R&D and
    innovation?
        Ms. O'Connell. Well, as we have talked about today,
    Congresswoman, the innovation is going to be critical to us
    being able to afford to reshore some of the production that has
    left our shores over the last 50 years. And in order to invest
    in that innovation, we need to have the research and
    development in place.
        Cuts to the administration--you know, to what we are seeing
    in HHS are impactful in a lot of ways in our preparedness and
    response efforts. You know, in order for us to have the tools
    we need ready to go, we need to be able to invest both in the
    advanced research and development of those tools as well as the
    stockpile and procurement of those tools. And with limited
    funds, we are unable to do what we were able to do before.
        I continue to say ``we.'' Of course, it is not ``we''
    anymore, it is ``they.'' But just a reflection on what the U.S.
    Government is going through right now.
        Ms. Kelly. Thank you so much.
        A recent Brookings report titled ``The Wild East of
    semaglutide'' raised concerns about the safety of compounded
    GLP-1 products, particularly those sourced from overseas
    manufacturers that have not been inspected by the FDA. Some of
    these products were found to contain unidentified impurities
    with limited regulatory oversight in place.
        Given these findings, can you also speak to the risks those
    pose to patient safety and whether stronger safeguards are
    needed in the supply chain? Ms. O'Connell.
        Ms. O'Connell. I am sorry. Can you please----
        Ms. Kelly. What I was asking about is, there was a question
    about the safety of compounded GLP-1 products, particularly
    those sourced from overseas. How safe are those? Because
    there's questions around FDA and their ability to inspect.
        Ms. O'Connell. Absolutely. So seeing these FDA cuts is--you
    know, one of the impacts of that is that we are not able to
    secure and make sure that our products are as safe as they
    should be. And I think that is extraordinarily impactful for
    the country.
        Ms. Kelly. It is very scary. Thank you.
        According to the DOGE Terminated Contracts Dashboard, on
    April 25, DOGE canceled four major contracts with U.S.-
    headquartered genomic sequencing companies who are responsible
    for tracking coronavirus variants in the United States and from
    25 other nations around the world.
        Ms. O'Connell, do you believe that cutting the laboratories
    that provide over 80 percent of the CDC's critical data for
    public health response enhances our safety and preparedness?
    Excuse my voice.
        Ms. O'Connell. Making those cuts does not enhance our
    safety and preparedness. We need that surveillance to know what
    is coming next, and it is critical that we are able to do the
    genomic sequencing in order to see what is coming.
        Ms. Kelly. Thank you very much. Thanks to the witnesses.
        And I yield back.
        Mr. Dunn. The gentlelady yields back.
        And I recognize the gentleman from the great State of
    Florida, Mr. Bilirakis.
        Mr. Bilirakis. Thank you very much. Appreciate that, Mr.
    Chairman. Thank you again for holding this hearing on this very
    critical issue.
        The healthcare supply chain is incredibly complex, and we
    need to do more to protect our supply chains from
    vulnerabilities. This is not only a health issue but a national
    security issue. Public health and wellness should not depend on
    foreign adversaries, plain and simple.
        I am proud to be a founding member of the American-Made
    Medicines Caucus with my good friend Chairman Buddy Carter, and
    look forward to advancing key policies on this particular
    issue.
        I am also encouraged to hear that we are already making
    progress to invest in domestic manufacturing. Last year, I had
    the privilege to visit Med-Nap, a company in my district that
    specializes in saline and medical-grade wipes. This company has
    recently expanded and has significant plans to expand further
    but struggles to compete with China, unfortunately.
        We must protect American leadership and innovation with
    regulatory and market certainty. I look forward to learning
    from you today, the witnesses, and already have.
        But the first question is for Dr. Piervincenzi. Your
    organization has unique visibility into the domestic
    pharmaceutical supply chain. Your testimony mentions, and I
    quote, ``a fundamental shift in the market is needed to align
    supply and demand forces.''
        Can you provide more detail on the types of incentives
    needed to make this shift, please?
        Dr. Piervincenzi. Thank you, Congressman. I appreciate that
    opportunity.
        Mr. Bilirakis. Of course.
        Dr. Piervincenzi. USP is working in a public-private
    partnership to address two sides of this: the incentives that
    you describe on the one hand, and then the capacity on the
    other.
        On the incentives side, the incentives really come back to
    the buyers. We need--the buyers need to be incentivized to make
    the investments in resilience, which means to purchase
    medicines where they can rely on the quality, where they can
    have a higher expectation of consistency and not only purchase
    on price. However, those buyers today don't have the data that
    they need to make that choice, and simply paying more for the
    same medicine achieves nothing except wasting patients' money.
        And, therefore, what we also need--the second part of
    this--are a set of benchmarks that can describe what does
    consistent quality look like. How do we consider things
    upstream? For example, a manufacturer who buys their API from
    trusted sources in Europe or from two locations rather than
    from an adversary. These become factors. And a variety of those
    factors can result in something that would be rewarded through
    a better contract.
        So these are the two pieces that we are putting forward
    when we talk about our supply chain resilience initiative--
    benchmarking initiative, sorry.
        Mr. Bilirakis. Thank you. Again, sir, would it be helpful
    for the Federal Government to conduct a national security
    assessment on the location and volume of APIs and key starting
    materials in countries of concern that are used to make drugs
    for the U.S. market?
        Dr. Piervincenzi. Absolutely. Yes. And, fortunately, we are
    in a position to be able to do that now. We wouldn't have been
    able to 5 years ago.
        USP has already completed mapping nearly all locations for
    APIs for 94 percent of U.S. medicine. We are in the process and
    only need a few more months to complete the KSM analysis, which
    is essentially where are the current key starting materials
    coming from for those APIs.
        The typical medicine today, if you randomly pick something
    off a shelf in a pharmacy, would probably be a solid oral
    dosage, a pill, made in India with an API or at least a key
    starting material coming from China.
        And so this mapping has to go upstream to that last step.
    And then--then we are not done. Then we have assessed risk.
    Next step, we begin the process of fixing the problem, which
    partly could be figuring out different ways to make those APIs.
        And so perhaps the only key starting material in the world
    for a certain antibiotic is from China. Well, let's make it a
    different way. Chemistry will allow different pathways, and new
    technologies for manufacturing allow us to use those new
    pathways.
        And then the final thing is that the benefit of chemistry
    is it doesn't change. So we only have to do that work once, and
    then we have a permanent database that we can use for the
    entire medicine supply to find alternative routes. And this is
    within our reach, in a couple of years, for fractions of a
    billion, less than 100 million. It is right here, and it is
    available today.
        Mr. Bilirakis. Very good. Thank you.
        I yield back, Mr. Chairman.
        Mr. Dunn. The gentleman yields back.
        I now recognize the gentlelady from Washington State, Dr.
    Schrier.
        Ms. Schrier. Thank you, Mr. Chairman. Thank you to all of
    our witnesses. This has been such an interesting discussion.
        Before I start, I just need to make a couple comments. I
    want to open today just about recent news and to voice my deep
    frustration with HHS Secretary RFK, Jr., for unilaterally and
    just unjustifiably firing all 17 members of the Advisory
    Committee on Immunization Practices. And, Mr. Chairman, I would
    like to know if you will commit to having a hearing on this
    issue.
        Mr. Dunn. I will take that up with the chairman.
        Ms. Schrier. Thank you. In addition, on the same topic, as
    a pediatrician I cannot help to mention that these policies of
    RFK, Jr., to discourage vaccinations may well decrease or
    eliminate the U.S. production of vaccinations, which I would
    consider just as, if not in some cases more, important than
    having all medications developed and manufactured here in the
    United States. And I just shudder to think about this in the
    context of a future pandemic, which will probably not take too
    long to arrive on our shores.
        And then I also want to mention--because we have been
    talking a lot about antibiotic shortages in particular, and I
    wanted to tie vaccines to that. Because although there are some
    diseases that just cannot be treated--I mean, we are talking
    about measles and polio and others--they can't be treated with
    medications.
        Like, I personally have seen what the Hib, Haemophilus
    influenzae B, vaccine has done in terms of preventing not just
    ear infections but meningitis and something called
    epiglottitis, where the epiglottis swells so much that kids
    cannot breathe until they get intubated. That is virtually gone
    now. I have never seen a case of that. And that would have
    required the antibiotics we are talking about today.
        I think about the pneumococcal vaccine and what that has
    done. Also for sepsis, meningitis, pneumonia, ear infections,
    and how that has not only decreased deaths but has also
    decreased our reliance on some of these medications.
        So I just had to close that loop and make it clear that
    vaccinations also need to be part of our healthcare strategy
    and domestic manufacturing.
        OK. On the topic that we are talking about today about
    having domestic manufacturing and also, you know, we don't want
    to depend on our adversaries, I would say nearshoring is
    another important strategy when we are talking about this.
        And I love the concept of the buy-American incentive. I
    think that will work well, especially because Medicaid,
    Medicare, VA, TRICARE make up such a big part of our healthcare
    system that, if we only did that on the governmental level and
    dealt with PBM reform, I think that would go a long way to
    achieving what we are all hoping for today.
        I also like that you talked about the other incentives, and
    I think Operation Warp Speed is really a perfect example of how
    government incentivized manufa--research, development,
    manufacturing of vaccines that have saved millions of lives. I
    think that has been forgotten in this country, but that that
    was incredible.
        I also will mention that ACIP also vetted those vaccines
    and is directly tied to saving millions of lives.
        Ms. O'Connell, it is great to see you again. I was
    wondering if you could first just discuss how Federal research
    over decades led to development of the COVID vaccines in less
    than a year, record time?
        Ms. O'Connell. Well, that is exactly right. And one of the
    things I think people forget is that, when the Trump
    administration first started Operation Warp Speed, they
    invested in several--an entire suite of candidates of various
    platforms, and each of those platforms came through some early
    research work that NIH did and some advanced research and
    development that BARDA did.
        So the Government was critical in helping to see the
    success of each of those platforms come through. It turned out
    that the mRNA platform was the one that moved us quickly. You
    know, you mentioned the one that was done within 11 months.
    That was--we were able to--the Trump administration at that
    time was able to push that research through and develop that
    vaccine, and it did provide significant protection for millions
    of Americans.
        Ms. Schrier. Thank you. And just to double-click on that,
    NIH research over 10 years led to that, and China is currently
    seeking access to that technology.
        OK. Last, government strategy in terms of having
    manufacturing facilities. I found it so interesting that
    there's all these retired manufacturing facilities out there
    that aren't being used that could be rehabilitated that could
    speed this path. And I just wanted to just drill down a little.
        Is it possible for, like, a given manufacturing facility to
    kind of shift lines to produce different kinds of medications,
    and has there been a strategy developed about which facility
    could manufacture--what car facility produced ventilators?
        Go ahead and answer. Anyone.
        Dr. Piervincenzi. Sorry about that, Dr. Schrier.
        So to some degree, within a type of medicine--so
    physically, rather than how it treats--so solid oral dosage
    form, a sterile injectable, saline--these will be quite
    different. However, switching from one type of--within a
    similar bucket becomes much more feasible and faster.
        Ms. Schrier. That is great. I have to yield back, but I
    like that reassuring answer. Thank you.
        I yield back.
        Mr. Dunn. The gentlelady yields back.
        I now recognize the gentleman from Pennsylvania, Dr. Joyce.
        Mr. Joyce. Thank you, Mr. Chairman. And thank you to our
    panel for appearing here today on such an incredibly important
    topic.
        With President Trump's Executive orders aimed at increasing
    domestic manufacturing and more resilient supply chains, we
    have seen a multitude of new investment announcements in the
    U.S., specifically in the pharmaceutical space. It is for this
    reason that I am glad this subcommittee is reviewing the issue
    today.
        Access to generic drugs is critical to American patients,
    as generic medications make up 90 percent of the prescriptions
    filled in the U.S. And they are essential to keeping costs down
    across the healthcare system.
        During the 118th Congress, this committee put forward a
    number of ideas to strengthen the supply chain and address drug
    shortages. One core provision in that legislation was to
    finally fix the Medicaid generic drug inflation penalty. The
    incorrect application of an inflation penalty to the generic
    drug market has resulted in drug discontinuations, shortages,
    and further instability in the generic drug supply chain. This
    financial penalty can drive low-margin, essential medicines
    into negative territory, forcing manufacturers to leave
    markets, which ultimately leaves the patient without the
    medicines that they need.
        Mr. Murphy, you mentioned this penalty in your testimony.
    Can you elaborate on how it creates uncertainty for generic
    manufacturers and why reform is necessary in this specific
    area?
        Mr. Murphy. Well, Dr. Joyce, thank you for the question.
        And as, you know, we have said across our testimony, the
    generic marketplace has a number of critical factors facing it
    that are negative. I would think from a--at a broader level,
    though, when we talk about domestic manufacturing, one of the
    things we really want to talk more about is how we can move the
    markets to more appropriately treat generic medicines in the
    reimbursement system.
        So we talk about PBM reform, we talk about domestic
    manufacturing incentives, because it is really--it is a
    critical component of the U.S. market that we don't do enough
    for. And so we would love to follow up with your office and
    talk more about concrete steps we can take, but I think we look
    at the overall picture of this hearing to say there are lots of
    structural problems in the market that we need to address, and
    we hope to work with Congress collaboratively on a suite of
    reforms that we can get to to ultimately make this market a
    more predominant force in the U.S. manufacturing base.
        Mr. Joyce. And I would welcome that, to open that dialogue,
    so we can make those concrete steps forward.
        So as we talk about strengthening our pharmaceutical supply
    chain, I urge my colleagues to also consider reforms that
    address the market challenges in the generic drug supply chain.
    We need policies that reflect the realities of the market and
    support, not to stifle, access to affordable medications. It is
    also important to acknowledge existing barriers that exist to
    reshoring manufacturing in this space.
        Mr. Murphy, can you walk me through the average timeline
    and process to establish and construct a facility in the U.S.,
    starting from the initial decision to invest, permitting,
    inspection, to fully opening and operating? How long does that
    generally take?
        Mr. Murphy. So based on our conversations with our
    manufacturing members, once you have raised the capital, which
    is in and of itself a barrier in the generic market, you are
    looking at close to 5 to 7 years if you are going to build a
    new facility. And there are State laws that actually come into
    play too that we really think we should talk about.
        Mr. Joyce. And do you have any estimate on the costs that
    are associated with these processes, as well as the
    corresponding delays which occur because so many inputs have to
    be taken into consideration?
        Mr. Murphy. Yes. So what we understand, in new facilities,
    right, a new API facility, you are talking a couple hundred
    million dollars. And that is, you know, at a small scale. If we
    wanted to start really scaling up, you know, it is a
    significant investment for our manufacturers.
        Mr. Joyce. That is a significant cost, and that is a long
    time. I must imagine that these burdens play a role in making
    decisions about where companies should invest, especially when
    facing those daunting costs.
        With my remaining time, Mr. Murphy, what are the top three
    regulatory burdens that we in Congress could change to improve
    this process?
        Mr. Murphy. Yes. Thank you for that question, Dr. Joyce.
        So, one, I think we need to streamline the regulatory
    review process both on the environmental, the water quality, as
    well as the FDA inspections process. It doesn't mean limiting
    the safety and effectiveness of FDA but figuring out ways for
    more complex generic development to be streamlined and
    prioritized at the agency.
        I think PBM reform, to try and take the stranglehold over
    pricing that is occurring in this country back and put it back
    in the driver's seat for generic manufacturers is another.
        And then I think also prioritizing generic access once they
    become available on the market. Too often products remain in a
    predominant position to provide access to patients over top of
    generic approvals.
        And we could fix all three of those with this committee's
    help.
        Mr. Joyce. I look forward to beginning this process and to
    work with you. This committee is dedicated to making sure our
    patients have access to affordable, efficient medications. I
    thank the entire panel for presenting here today.
        Mr. Chairman, I yield back.
        Mr. Dunn. The gentleman yields back.
        I now recognize the gentlelady from Michigan, Mrs. Dingell.
        Mrs. Dingell. Thank you, Mr. Chair. Thank you for holding
    this important hearing.
        We have really realized--the COVID-19 pandemic really
    showed the world how our supply chains were disrupted
    significantly and how we must focus on bringing production
    home. It is a public health safety issue and it is a national
    security issue, which too many people do not realize.
        Congress needs to ensure that we are prepared for what is
    to come, increase our ability to onshore healthcare
    manufacturing, as we have very clear bipartisan agreement on,
    and respond effectively to disruptions.
        It is critical to ensure healthcare providers have access
    to the medical supplies and the prescription drugs that their
    patients rely on. And I think too many people do not understand
    how drug shortages in this country are leaving thousands of
    patients in distress. No one should have to panic and fight to
    find the medications their doctors know are necessary for their
    treatment.
        We must work, as everybody is talking about, to onshore
    pharmaceutical supply chains, incentivize the production of
    generics, find ways to ensure we understand why shortages are
    happening, getting earlier alerts, helping with broad
    distribution and many other issues.
        I am going to--so I actually have more questions from some
    of your answers, but I will go to my first one that I do want
    to say because one of our concerns--my concern is the ability
    to achieve these solutions is extremely difficult, if not
    impossible, as a result of the drastic reductions in force of
    $400 million in budget cuts at the FDA proposed by the Trump
    administration. Without a strong FDA workforce, we can't ensure
    we are safely and effectively doing the critical work needed to
    maintain the safety of our drug supply chain.
        So, Mr. Murphy, the Trump administration has made these
    drastic reductions in the FDA workforce. How have large-scale
    staff reductions affected the ability of the FDA to maintain
    this prescription drug supply chain, and what long-term effects
    can we anticipate on our drug supply and resulting costs for
    American patients?
        Mr. Murphy. Thank you for that question, Mrs. Dingell.
        We have seen delays already this year in the release of
    what are called product-specific guidances, which are the
    critical components that generic manufacturers need to develop
    the products to get them approved by FDA. And so that was, I
    think, the first backlog we saw at a very material level. I
    will say, just last week, the FDA did start releasing those
    product-specific guidances again, and so we are hopeful that we
    will continue to see that backlog eaten away at.
        But, you know, I will say as a representative of the
    generic industry, every month's delay of a generic drug getting
    to market is a month that patients are paying more for branded
    drugs than they should be for generic drugs.
        Ms. Dingell. I do have a question. And I am probably going
    to have to do a lot more questions for the record. I am mainly
    concerned about the drug shortages that patients are currently
    facing, and some just don't make sense to me.
        An example: An asthma drug that many pulmonologists now
    want to use has gone to generic, but the generic is taking
    months. And you have got--the supply chain is so complicated.
    But pulmonologists are talking to me about how their patients
    can't get the generic, and the generic is more--I wish I could
    remember the name of it. And it doesn't make sense. And yet it
    is a real problem. And that is just one. There are about 20
    other drugs I could name off the top of my head.
        Can you speak to how these cuts to our supply chain
    infrastructure will specifically impact the ability to address
    existing and prevent future drug shortages?
        Mr. Murphy. Yes. So certainly, FDA's inspection capacity is
    critical to ensuring that products can get to market. And, you
    know, we hope to see, as staff are added back to FDA--which we
    understand is occurring--that those inspections will pick up.
        But I don't want to discount the fact that, in the drug
    shortages space, just for purposes of clarity, that, you know,
    price in the generic market is a huge driver of drug shortages,
    and that is something we would love to work with the committee
    to address.
        Ms. Dingell. We would love to get some specific
    recommendations on that.
        You know, Mr. Chairman, I am down to 29 seconds, so I guess
    what I am going to do--I have a lot of questions for the
    record, and we will--and this is my partner in PBM reform, so
    we both totally agree in a bipartisan way.
        Mr. Carter of Georgia [presiding]. Absolutely.
        Mrs. Dingell. I will yield back.
        Mr. Carter of Georgia. Thank you. The gentlelady yields.
        The Chair now recognizes the gentleman from Ohio,
    Representative Balderson, for 5 minutes of questioning.
        Mr. Balderson. Thank you, Mr. Chairman.
        Thank you all for being here today. I am looking forward to
    hearing some responses for my questions, and I appreciate the
    innovation of quality care that is available to all Americans.
        I am proud to represent Ohio. Mr. Bolin talked about Ohio,
    a State that continues to support innovation, investment, and
    domestic development, clearly impacting the patient community.
        Recently I had the privilege of attending a groundbreaking
    in my district for Amgen's new advanced manufacturing facility
    in New Albany, Ohio. And with Central Ohio being home to
    McKesson's largest and most advanced pharmaceutical
    distribution center as well, I can proudly say that the world's
    leaders in medicine are investing right here at home.
        The policies we work on should continue to support
    companies we choose to do business here in the United States,
    allowing for innovations to be accessible to all Americans.
        Mr. Bolin, my first question is for you, and thank you for
    being here. And I apologize for running back and forth between
    meetings.
        I have led bipartisan letters to the FDA twice, raising
    question about the industry's ability to comply with the Drug
    Chain Supply Security Act and warning of possible drug
    shortages and supply chain disruptions if the FDA fails to act
    ahead of the enforcement deadline of the DSCSA. I know progress
    has been made since the implementation process began, and as of
    2024 the FDA announced a set of phased exemption periods that
    will expire on different dates this year.
        Given your background, I am curious to hear from you about
    the importance of this process as well as the importance of
    ensuring the supply chain remains uninterrupted as the
    exemption periods come to an end.
        Mr. Bolin. Sure. Thank you, Congressman.
        So as you mentioned, last year FDA has implemented this
    more of a phased implementation process for full implementation
    of drug traceability throughout the supply chain. The
    manufacturer exemption actually just expired less than a month
    ago, and so manufacturers now have to fully comply with the
    law.
        The next expiration period comes up for both distributors
    and for pharmacies later this summer. And FDA has been holding
    a number of townhall meetings and listening sessions from each
    of the sectors to try to understand where each of the sectors
    stand moving toward implementation.
        The manufacturing community, I think, by and large is and
    was ready. Major distributors are well on their way. And there
    are going to be some questions about where the pharmacy
    community is when it comes to compliance. Many of the larger
    chain pharmacies have already, you know, come into compliance,
    by and large. The smaller independent community pharmacies are
    likely going to be leaning on their small dispensary exemption
    that they have, which gives them until next year.
        Of course, the concern with that is that the longer it is
    for the supply chain to come into full compliance, the more
    susceptible it is for illicit products making their way into
    the legitimate supply chain, as we have seen with the GLP-1
    medications in Arkansas and in Mississippi. And we have seen
    more recently HIV--counterfeit HIV medications making their way
    into pharmacies in New York.
        So the longer the implementation takes, the more concern
    there certainly is.
        Mr. Balderson. OK. Thank you. Appreciate that.
        Dr. Piervincenzi--I hope I said that correctly, sir, I mean
    no disrespect--thank you for being here today also.
        We know that a recent analysis showed that around half of
    the active pharmaceutical ingredients, APIs, for prescription
    medications in the U.S. come from India and the EU, with around
    12 percent being manufactured domestically here in the U.S.
        From your perspective and with your great experience, how
    do you believe we can increase this share in a sustainable way?
        Dr. Piervincenzi. Thank you, Congressman Balderson, for
    that question.
        It is two layers to it. I think the first layer is to
    increase production of API will require new facilities and
    substantial new investments and time. There are shorter-term
    ways to bridge the gap and to create a more secure supply
    chain, including through friendshoring and other purchasing
    opportunities.
        And, finally, also considering the potentially even higher
    vulnerability to the starting materials upstream of the API,
    which may be even more highly concentrated in adversary
    countries and coming to us through India and Europe.
        So we talked earlier about the good news being there is new
    return opportunity and some untapped potential for some
    production. But for API production, unfortunately, we are going
    to have to do this from--mostly from scratch. And that is why
    USP is talking about creating easier access to the advanced
    manufacturing technologies, especially for generic companies,
    who today are struggling to be able to make any capital
    investments like that in the U.S.
        Mr. Balderson. OK. Thank you very much.
        Mr. Bolin, you got--I had another question. We are out of
    time.
        Mr. Chairman, I yield back.
        Mr. Carter of Georgia. The gentleman yields.
        The Chair now recognizes the gentleman from Texas,
    Representative Veasey, for 5 minutes of questioning.
        Mr. Veasey. Mr. Chairman, thank you very much.
        And I am glad that we are here having this conversation
    today about this supply chain of drug supplies. I think it is
    very important, and I too am worried about the U.S. losing
    ground to this area. I don't want to cede anything, whether it
    is solar, pharmaceutical drugs, whatever, to the Chinese. I
    think that is bad.
        And one of the things that worries me and we will fall even
    further behind in the race is the fact that the Trump
    administration has laid off more than 3,500 FDA employees, and
    many of them performed very essential functions, like drug
    inspections, generic drug reviews, oversight roles funded
    directly through user fees.
        And at the same time, the administration is imposing these
    sweeping tariffs on these pharmaceutical ingredients and
    manufacturing equipment, and we don't even make that
    manufacturing equipment, for the most part, here in America. A
    lot of this manufacturing equipment, if you have visited any of
    these facilities, they come from places like Germany. And it
    is--all of these things are going to mean that the American
    consumer could end up paying more for these tariff taxes.
        And so I wanted to ask Ms. O'Connell, we have seen
    firsthand how fragile this pharmaceutical supply chain can be.
    How do the current administration's actions, including
    unleashing these tariff taxes, serve to further undermine our
    pharmaceutical supply chain, and what are some specific
    effective ways the Federal Government can strengthen supply
    chain resiliency?
        Ms. O'Connell. Thank you, Congressman.
        I think one of the challenges with, you know, a policy
    initiative like the tariffs we have seen is it should be
    accompanied by investments in domestic manufacturing. Just
    putting tariffs on various products increases the price and
    likely decreases access for the American people to those
    products.
        What is important is that any tariff actions--and, you
    know, they are a really good tool to be able to use
    thoughtfully. Any tariff action should be accompanied by
    investments to make sure that there is adequate domestic
    manufacturing so the American people continue to have access to
    the products that they need.
        Mr. Veasey. Yes. No, absolutely.
        Mr. Murphy, you noted in your testimony that there is a
    structural challenge that generic manufactures face, including
    a lack of significant U.S. Government financial incentives to
    encourage domestic production of generic drugs.
        Can you expand on how this strategic stockpiling, either at
    the national or State level, can help encourage manufacturers
    to invest in U.S.-based production even when there are high
    costs and market uncertainties that are involved?
        Mr. Murphy. Yes. Mr. Veasey, thank you for your question.
    Thanks for your support on the stockpiling act that you are
    working on.
        One of the things we talk with our manufacturers about is
    what are creative ways to sustain supply commitments across the
    U.S. as we work on market challenges, like PBM reform and
    reimbursement. And one of those areas we talked about is, can
    the government provide a more stable supply market at a fixed
    price for a period of time that gives some certainty to
    producers who may be looking to invest in the United States and
    could get preference in that regard while we work across the
    market to sustain, you know, the overall generic supply chain
    in a more holistic way?
        So, you know, we view that as a critical interim gap that
    both secures the supply chain for American patients by having
    some supply at the ready, given pandemic or other challenges,
    but also helps bridge the market and gives some certainty to
    manufacturers who are producing either, you know, in the U.S.
    or friendshore countries while we work on other structural
    reforms to the marketplace.
        Mr. Veasey. Yeah. No, absolutely. And I really appreciate
    you mentioning the bill that I have, the State Strategic
    Stockpile Act, which will provide States with financial
    assistance to establish, expand, or maintain their own
    strategic stockpiles. I think that that would really help in
    raising some of the concerns that you have. So I really
    appreciate that.
        Mr. Chairman, with that, I yield back the remainder of my
    time.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the youngest pharmacist in
    Congress, Representative Harshbarger, from Tennessee.
        Mrs. Harshbarger. Yes. Thanks for that, Mr. Chairman. I
    appreciate that. Thank you.
        And thank you to the witnesses for being here today.
        And I am especially pleased to see you, Mr. Cashman.
        He is president of USAntibiotics, and his facility is a
    magnificent facility in my district of east Tennessee. And if
    you don't know the story of how USAntibiotics was resurrected,
    you need to read it--talk to me or talk to Mr. Cashman--because
    it is a remarkable story. It is a critical infrastructure
    facility.
        So thank you for being here.
        But before I get to questions, I do want to--I think I need
    to talk about--I am a compounding pharmacist, so I want to talk
    about strengthening the safety and security and quality of our
    healthcare product supply chains.
        Talking about compounding, there is an indispensable role
    for pharmacy compounding. And for 25 years--I came to the Hill
    to beat that drum about my profession and the overburdensome
    regulations to where we couldn't get patients the medications
    they needed.
        And compounding starts with a problem. For whatever reason,
    there are a lot of people that can't take mass-produced
    medications, and these compounding medications will provide a
    solution.
        And not all compounders are the same. Let me make that
    perfectly clear. But there have been recent reports--wrong
    reports, basically--that have referred to compounded drugs as
    counterfeit or knockoffs or copycats.
        And let me assure you, they are produced legally, they are
    regulated, and they serve as a critical lifeline for millions
    of patients. And many times have we stepped in when there are
    drug shortages and we have to provide that to patients to save
    their lives.
        So you are going to have bad actors, and you are going to
    have those compounders that are lifesavers.
        So, Mr. Chairman, for the record, I would like to submit an
    article that corrects the record and discusses how
    misrepresenting compounded medications hurts patients,
    undermines trust, and are a vital part of modern healthcare.
        Mr. Carter of Georgia. Without objection.
        [The information appears at the conclusion of the hearing.]
        Mrs. Harshbarger. Thank you, sir.
        Now I will get to the questions, the good stuff.
        Mr. Cashman, you said that the U.S. Government needs to
    prioritize made-in-America medication acquisitions over and
    beyond price comparisons. Do you think this approach will lead
    to higher drug prices for American patients and taxpayers?
        Mr. Cashman. Thank you, Congresswoman Harshbarger. And good
    to see you as well.
        It is a valid concern. But I think it is something we
    really need to look at more broadly.
        When shortages occur, as they did in 2022 and 2023,
    physicians are forced to use less effective alternatives--you
    know that very well as a pharmacist--leading to longer hospital
    stays, the potential for antimicrobial resistance in the case
    of antibiotics, treatment failures, and eventually higher
    overall healthcare costs.
        The economic disruption from supply chain failures far
    exceeds any premium for domestic production. More importantly,
    we are not asking for subsidies or price guarantees. We are
    asking for purchasing policies that factor in more than just
    price, things like supply chain security, national security,
    public health, and welfare, alongside costs.
        A slightly higher upfront price is a small insurance
    premium against catastrophic costs of shortages or supply
    disruptions.
        Mrs. Harshbarger. Yes. To me, it is a national security
    issue. When you know that it is really closer to 90 percent of
    your APIs come from an adversarial nation and 70 percent of
    India's APIs come from China, there is a problem, and there has
    been. And that is why I am here.
        So you mentioned that USAntibiotics serves about 5 percent
    of the market despite having capacity to serve 100 percent of
    the market. You got 390,000 square feet. I have been there. And
    it is not just your amoxicillin you could do. You could venture
    into cephalosporins or other drug therapies within that plant.
        So what prevents you from scaling up, sir?
        Mr. Cashman. Our plant can produce any beta-lactam
    antibiotic, Congresswoman. And what prevents us from scaling up
    is really long-term agreements with both commercial and
    government buyers.
        That would really help our business. It would allow us to
    make appropriate business decisions and make investments and
    scale up when it is appropriate.
        Mrs. Harshbarger. Yes. Because we are hearing from
    physicians and healthcare providers all over the country about
    antibiotic resistance and things of that nature, and you want
    to make sure that those antibiotics you are receiving--in a
    finished product, even--is exactly what it says it is. And when
    you have healthcare facilities testing their finished product,
    that shows you that not everything that says it is, is really
    what it says it is.
        You mentioned the Government spent 40 million on foreign-
    origin amoxicillin while buying less than $1 million from
    USAntibiotics. Isn't the Government supposed to take the lowest
    bids?
        We need those origins of what they are buying. Aren't they
    supposed to take the lowest bid? You are only getting a million
    dollars worth of a $40 million business, and you are a domestic
    manufacturer.
        Mr. Cashman. So, Congresswoman, let me understand your
    question. Please, can you rephrase the question so I better
    understand?
        Mrs. Harshbarger. Well, you are a domestic supplier. The
    Government spent 40 million on foreign-origin amoxicillin. And
    they only--you only--I guess, you have less than a million
    dollars spent on your market of amoxicillin.
        Is it because of the price? Or why would you be excluded
    from that contract?
        Mr. Cashman. Thank you, Congresswoman. Now I understand.
        Mrs. Harshbarger. OK.
        Mr. Cashman. The contract for the SNS was focused on small
    businesses. We are not considered a small business because of
    our ownership structure. So we weren't allowed to compete for
    that contract, that specific contract.
        Mrs. Harshbarger. OK. Got you.
        Mr. Cashman. Yes, price is part of the Government's
    decision, but we would ask that they take a broader view and
    look at other factors as well.
        Mrs. Harshbarger. Yes.
        Mr. Carter of Georgia. The gentlelady's time has expired.
        Mrs. Harshbarger. Thank you. I yield back.
        Mr. Carter of Georgia. The gentlelady yields back.
        The Chair now recognizes the gentlelady from Texas,
    Representative Fletcher, for 5 minutes of questioning.
        Mrs. Fletcher. Well, thank you, Mr. Chairman.
        And thank you to all of our witnesses today for your
    testimony. I have appreciated it. And I think that your
    prepared testimony and answers to the questions today have been
    really helpful on this important topic.
        This has long been an area of bipartisan agreement, and I
    do hope we can move forward on some of the thoughtful
    recommendations and ideas that we have heard, not only today
    but over the last several years, about this issue.
        But once again, I caution everyone on this committee and
    everyone participating that these are not normal times. And we
    can't pretend that they are. To the extent that holding this
    hearing suggests that they are, we have to acknowledge that
    they are not.
        Like my colleagues who have spoken before me, I can think
    of more than a dozen topics that this subcommittee should be
    holding a hearing on about unprecedented and tremendously
    damaging recent actions in the Trump administration, like the
    announcement that the Secretary of Health and Human Services
    just fired all of the members of the Advisory Committee on
    Immunization Policies; or the staff reductions and delayed and
    canceled research at the National Institutes of Health; or
    pauses in funding for grants at institutions that do critical
    medical research, undoing decades and decades of work that this
    country has invested in to lead the world in medical research
    and in scientific research more broadly.
        These are just not normal times. And these are huge issues
    in my district, where so many people work at the Texas Medical
    Center, the largest medical complex in the world, doing the
    groundbreaking research that we are talking about in this
    country, including development for new vaccines for diseases
    threatening people here at home and around the world.
        So I appreciate the importance of making our healthcare
    supply chains more resilient, but we cannot have this
    conversation without acknowledging that the Trump
    administration is today taking steps to gut our Federal
    agencies that are directly responsible for making these supply
    chains function properly and result in safe and effective
    medical products for Americans.
        It was only 2 months ago that HHS fired 10,000 workers
    across the agency, including 3,500 at the FDA. The mass layoffs
    were done so haphazardly, as many of us in the room know, that
    the FDA had to hire some of those people back because they were
    critical to food and drug safety and work at the agency.
        Another example: firing all 13 of the Division of Policy
    Development staffers in the Office of Generic Drug Policy at
    FDA. This team drafts, reviews, approves the policy guidance
    that we are talking about, gives instructions on how generic
    versions of branded medicines can be developed and brought to
    the market, the kinds of things we are talking about today. The
    administration is gutting these agencies that do absolutely
    critical work.
        And so I am glad that the administration realized its
    mistake and that some of these FDA employees have been rehired.
    But it is another example of a shoot-first-and-ask-questions-
    later approach that is a huge threat to our healthcare supply
    chain.
        So for months, guidance documents outlining the approval of
    pathways for generic drugs were put on pause. Mr. Murphy, I
    know that your agency--or your organization--put out a press
    release expressing concern about this in early April, about the
    staffing cuts at FDA.
        Can you share with us, how has the confusion from the
    firing and rehiring of this team and the subsequent delays in
    issuing new guidance impacted generic drug development and
    approvals?
        Mr. Murphy. Yes. Thank you, Mrs. Fletcher, for the
    question.
        As you noted, obviously, we view FDA as a very critical
    component of the drug supply chain both in ensuring safety and
    making sure patients understand what they are getting, it is
    effective.
        We did see a number of delays this year that thwarted the
    ability of manufacturers to request product-specific guidance.
    It does appear that that is starting to come back online. And I
    think we were very heartened to hear that the agency is
    starting to look at the Office of Generic Drugs to rehire
    individuals, because it is a component of the agency that I
    think could benefit from more capacity versus less capacity.
        And so we were glad to see Commissioner Makary announce
    they were going to bring those folks back to the Office of
    Generic Drug Policy. But we now have a backlog that we have to
    work through. And from a generic drug standpoint, that inhibits
    the ability to bring more affordable medicines to patients
    sooner.
        So we hope and we look forward to working with the agency
    to try and address that backlog.
        Mrs. Fletcher. Well, thank you, Mr. Murphy.
        And I just want to reiterate, it doesn't have to be this
    way. It doesn't have to work this way. This is an approach the
    administration has chosen, and there are other things the
    administration has chosen to do.
        I am going to submit a question for the record to you, Mr.
    Bolin, because another thing that this administration has
    chosen to do is impose tariffs on all kinds of imports. We
    talked about it a little bit earlier. But I want to ask you and
    will submit for the record a question about how those tariffs
    are impacting pharmacies.
        I am hearing and seeing reports particularly that tariffs
    on pharmaceuticals might impact pharmacies, and I know that
    that is a concern certainly for our chairman and for all of us
    for access to drugs for our constituents.
        So I thank you all very much for your work and for your
    time today.
        And I thank you, Mr. Chairman, for letting me go over just
    a minute. And I will yield back.
        Mr. Carter of Georgia. The gentlelady yields back.
        The Chair now recognizes the gentlelady from Iowa, Dr.
    Miller-Meeks, for 5 minutes of questioning.
        Mrs. Miller-Meeks. Thank you, Mr. Chair. I will try to stay
    on time.
        Let me just say that nothing could be more important than
    this hearing today. I recall last term that the now-minority
    party held up the reauthorization of PAHPA because we didn't
    address drug shortages with more regulation on the FDA, which
    is certainly not the answer.
        This is a pressing issue that impacts all Americans
    regardless of demographic and geographic location, which is our
    healthcare supply chain. It includes pharmaceuticals, medical
    device components, bandages, and other lifesaving products
    which everyone in this room has either used, currently uses, or
    will use at some point.
        And I applaud recent efforts by the Trump administration to
    boost American supply chain production, such as the recent
    announcement of the opening of a facility in North Carolina to
    produce carbon black well ahead of schedule.
        Examining our supply chain is essential not just to ensure
    patients have the resources they need but also to ensure we are
    not too reliant on other countries like China for supplies.
        As has already been addressed, only 19 percent of active
    pharmaceutical ingredients, for example, are produced in the
    United States, 13 percent from China, and 21 percent from
    India.
        The reliance on other countries for generic drugs, which
    comprise the majority of prescriptions filled in the United
    States, is even higher, presenting additional and concerning
    challenges.
        Having robust U.S.-based manufacturing is also essential to
    combating drug shortages, which a number of our health systems
    in my district are currently facing.
        In addition to boosting manufacturing capabilities, there
    need to be appropriate incentives to support innovation, which
    is why I am concerned about the damage that government price
    controls from the Democrats' Inflation Reduction Act has done
    to U.S. biopharmaceutical research and development, especially
    in areas like orphan drugs and small molecule medicines, and I
    have even heard this from pharmaceutical manufacturers abroad.
        And, Mr. Murphy, thank you for mentioning PBM reform. My
    first PBM reform bill was in 2019 as an Iowa State senator. It
    has been a long time coming for PBM reform.
        Since 2021, small molecule development has decreased by 70
    percent, which led to fewer cures coming to the market, meaning
    less new drugs being manufactured and fewer options for
    patients who depend on innovation. It is why I also support
    fixing the pill penalty, which will support domestic
    manufacturing of new and advanced drugs.
        Mr. Piervincenzi, do you agree that creating new government
    price controls could worsen the harm being done by the IRA in
    terms of discouraging more R&D, and if so, by how much?
        Dr. Piervincenzi. Thank you, Congresswoman, for the
    question.
        The important distinction, I think, in the supply chain
    resiliency is that between the branded medicines and the
    generics. And we are getting a really much better understanding
    now. It has been known, I think, to some degree.
        On the branded side, what we have is a much higher
    production of medicines in the U.S. We also have more onshoring
    going on right now, as we have discussed during this hearing.
    And this is quite encouraging, and I think this is even more
    opportunity.
        Unfortunately, on the generic side, just the economics and
    the incentives are just not there. And it is solvable. And, in
    fact, because the prices are so low, the cost of solving it is
    actually reasonable. But we don't have any mechanisms to make
    sure that when people maybe pay more or have a better contract
    that they are rewarded with something more resilient and they
    are not just paying for the same thing with more money.
        Mrs. Miller-Meeks. And this question is for you again, or
    for Mr. Murphy.
        There has been a lot of talk already about active
    pharmaceutical ingredients, or APIs, key starting materials, or
    KSMs, finished dosage forms, and the like.
        I want to make sure we are all on the same page. But
    instead of going through what the ingredients are, let me just
    say, understanding that there is more to learn based on what we
    currently know, where are most KSMs extracted and/or produced?
    Either of you.
        Dr. Piervincenzi. Yes. I am happy to take that, Mr. Murphy.
        So we are very close to being able to actually answer that
    question. The worry has been, as we have gone upstream, we have
    discussed quite a bit about APIs because we kind of knew that,
    and that gave us, I think, some concern. But we had a lot more
    concern in discussions with industry in India, in particular,
    when we said: Where are you getting your KSMs from for your API
    production? And the answer was: mostly from China.
        This was a concern even in India, where there are
    policies--government policies to incentivize production of KSMs
    in office parks in India. And this is one piece of the
    solution. But USP believes we should be looking at that in the
    U.S. as well to create our own resilience, especially for KSMs.
        Mrs. Miller-Meeks. And quickly, where do finished doses
    come from, both injectables and solid oral doses?
        Dr. Piervincenzi. Yes. So injectable doses we produce much
    more as a percentage in the U.S., over 50 percent are U.S.
        Mrs. Miller-Meeks. OK. And then, as a whole, what country
    or countries are we most reliant on, and which products are
    particularly vulnerable?
        Dr. Piervincenzi. Yes, the simplest answer to that is that
    most medicines for the U.S. come from India.
        Mrs. Miller-Meeks. Thank you. I yield back.
        Mr. Carter of Georgia. The gentlelady yields back.
        The Chair now recognizes the gentlelady from New York,
    Representative Ocasio-Cortez, for 5 minutes of questioning.
        Ms. Ocasio-Cortez. Thank you so much, Mr. Chair.
        And thank you to all of our witnesses for offering your
    testimony here today.
        I would love to spend some of this time honing in on the
    issue of drug shortages. Drug shortages, of course, are more
    than just an inconvenience for a lot of people, but they can
    have deadly consequences for people in urgent medical
    situations.
        And one of the most common drugs in the United States right
    now facing a shortage is the liquid form of Albuterol, which is
    used by hospitals to treat asthma.
        Albuterol has been in short supply since 2022, and this is
    an issue that hits particularly close to home in my community.
    In the South Bronx in particular, we face one of the highest
    childhood asthma rates in the United States. And when these
    kids and their parents show up at a hospital and they are
    unable to breathe, they may not be able to access the medicine
    that they need if there is a shortage.
        Ms. O'Connell, can you help the general public understand
    why is it that in such a common condition such as asthma, and
    with such a broadly available drug like Albuterol, how can we
    get to a place--and how do we get to a place--where there is a
    shortage of it in the United States?
        Ms. O'Connell. Thank you so much, Congresswoman.
        Albuterol wasn't one of the issues that we dealt with
    directly in ASPR, but observationally, I think it is a perfect
    example, as you have laid out, of the fragility of the generics
    market.
        Albuterol is a generic drug, had two manufacturers in the
    United States. One of them declared bankruptcy and left the
    market. That left a shortage. And there have been very few
    incentives, as has been discussed already at the table, to
    encourage generic manufacturing of Albuterol in the country.
        Ms. Ocasio-Cortez. Thank you.
        And I think to kind of disentangle this a little bit more,
    there is a lot of talk about incentives. But at the end of the
    day, the United States healthcare system is a for-profit
    system. And largely, an incentive is about if making it is
    profitable.
        And in the for-profit system, manufacturers need to know
    that their drugs will be profitable. If it is not profitable,
    the incentive doesn't exist, it becomes difficult to
    manufacture.
        But if manufacturers can't afford to operate, they will
    leave the market altogether, as you noted, or move their
    operations abroad.
        Meanwhile, drug shortages are costing hospitals at least
    $360 million annually in labor costs alone for making up for
    some of these shortages.
        And so what all of these pieces put together are pointing
    to is a market failure. And, ironically, this market failure is
    emerging because the drug is affordable, because the price is
    very low.
        My understanding is that the Federal Government has
    effectively acted in the past to address drug shortages. And in
    particular, both Republican and Democratic administrations have
    used the Defense Production Act to address past drug shortages.
    There has been some discussion today about almost, like, a
    strategic reserve of sorts but for medicine.
        Ms. O'Connell, what is the Defense Production Act, and has
    the Federal Government used it in the past--how has the Federal
    Government used it in the past to address drug shortages?
        Ms. O'Connell. Absolutely. Thank you so much for the
    question.
        So the Defense Production Act is an authority that allows
    the Government in times to secure the defense of the Nation or
    in times of emergency to priority rate contracts to ensure that
    the supplies that are in the supply chain go to whatever is
    needed to secure the country.
        So in a case of shortages, it would go to the manufacturing
    of the particular item that is in shortage, to be able to
    provide that item to the American people.
        We used it multiple times, dozens of times throughout the
    COVID response, both the Trump and Biden administrations. And
    then outside of the COVID response, we also used it for the
    infant formula shortage. And we used it most recently for the
    Baxter IV shortage.
        Ms. Ocasio-Cortez. Thank you. Yes. And those are all
    excellent points because we are hearing talk today of moving
    manufacturing to the United States, and it is not to give short
    shrift to that point, but some of those examples that you
    named--well, Albuterol is manufactured in the United States. IV
    fluid, manufactured in the United States. Even a couple of
    years ago, baby formula also produced in the United States. All
    three of those things are produced in the United States. All
    three have had chronic shortages.
        Ms. O'Connell, could the Federal Government play a role in
    manufacturing some of these drugs where we are seeing
    persistent market failures? I am interested in some of your
    thoughts to that point.
        Ms. O'Connell. Well, this is a question that we always come
    back to. Should the Government be responsible for the
    manufacture of, say, vaccines? That was a question we asked
    ourselves during COVID.
        And what it comes down to is a commitment from the
    Government to fund both the capacity for the Government to do
    the manufacturing as well as the capability for the Government
    to do that manufacturing.
        And over the course of our analysis in looking into this,
    and over many generations of others in similar situations
    needing to answer that question, what is needed most is a
    sustained commitment in funding. And that has not been
    something that has been demonstrated from previous Congresses.
        And so we always went to the public-private partnership,
    which is a perfect thing that BARDA does, which is invest in
    the capacity that the private companies have, reserve that
    capacity for the United States, but the United States doesn't
    own the actual physical structure and do the manufacturing
    itself.
        Ms. Ocasio-Cortez. Thank you.
        Mr. Carter of Georgia. The gentlelady yields back.
        The Chair now recognizes the gentleman from Michigan,
    Representative James, for 5 minutes of questioning.
        Mr. James. Thank you, Mr. Chairman.
        COVID was a clear wake-up call that our Nation for far too
    long has been reliant on unstable and adversarial supply chains
    for our critical medicine and healthcare supplies. When we are
    relying on China for lifesaving supplies to defend against a
    Chinese-made virus, something is horribly wrong.
        Only 12 percent of active pharmaceutical ingredients, APIs,
    for prescription medicines in America are manufactured
    domestically. Half our APIs come from India and the European
    Union. While China only contributes around 8 percent of APIs,
    they are a dominant supplier of the key starting materials
    utilized to produce APIs. They are also the exclusive
    manufacturer of APIs in essential medicines controlling much of
    the antibiotic API production.
        While we have been asleep at the wheel, the CCP has engaged
    in a concentrated and strategic effort to become the global
    leader in biomedicine development and production. I am gravely
    concerned over the growing role of the Chinese industry in our
    medicinal supply chains. Even India, which has made significant
    investments in carving out a major role in the medical supply
    chain, is dependent on China, an estimated 70 percent of their
    APIs.
        The warning lights are flashing red, and it is time for
    Congress to take action. The health of our citizens is a
    national security imperative, and too many lives are at stake.
    We must take action, and we must do it now.
        So I appreciate you all being here today. And we are trying
    to look at things different. It is a bipartisan issue to
    address our medical supply chain, but I believe that Michigan
    and the Great Lakes region is in a specific and very special
    position to be able to contribute in new and innovative ways.
        Given the push for reshoring and diversifying supply
    chains, should Congress direct HHS, DOT, and Commerce to study
    the feasibility of routing APIs and KSMs through U.S. ports in
    the Great Lakes to reduce reliance on congested coastal ports?
    Any of you have an opinion?
        Yes, sir.
        Dr. Piervincenzi. Thank you, Congressman.
        It is true we haven't discussed this piece of the supply
    chain in particular. And in the USP's Medicine Supply Map, most
    of the U.S.' imported medicines come through the East Coast.
    And it is something to be considered because that is a
    vulnerability itself through weather conditions and others.
        And so it is something that, if it is of interest, we could
    utilize the data to try to get you some more information about
    that.
        Mr. James. I would like to follow up with you on that, to
    at least have a feasibility study. Coming in through St.
    Lawrence and through the Great Lakes, the ports in Ohio and in
    Michigan and in Illinois could provide us a very good
    opportunity to diversify our risk levels in, say, New York, New
    Jersey, with that port, or maybe even further south in
    Jacksonville or Atlanta--I am sorry--or Savannah and Charleston
    and the like.
        Mr. Cashman, as the head of the only U.S.-based
    manufacturer of certain critical antibiotics, you understand
    logistical hurdles in sourcing both active ingredients and
    distributing finished drugs.
        This is the time to start considering regional shipping
    infrastructure, again, like Port of Detroit. Is there any
    targeted investment in port distribution infrastructure that
    can help firms like USAntibiotics scale domestic manufacturing
    and create a new route to distribute drugs and ingredients to
    drug-short areas?
        Mr. Cashman. Thank you, Congressman.
        I am not an expert on that subject. We route all our
    ingredients coming from Europe through an East Coast port as
    well. It is something to take a look at. And, again, I am not
    an expert on that particular topic, so I will pass.
        Mr. James. But additional routes might help with resilience
    and potentially lower cost?
        Mr. Cashman. Yes, it would help. Definitely.
        Mr. James. Perfect.
        Dr. Piervincenzi, USP has done a lot of work mapping supply
    chain vulnerabilities and drug shortage risks. Has your
    analysis explored the concentration of pharmaceutical
    transportation channels? And do you see value in restructuring
    transport sourcing routes? For example, APIs or KSMs, as we
    mentioned.
        Could USP's Medicine Supply Map incorporate port of entry
    and regional manufacturing hub data to help us understand how
    we could mitigate shortages and work through the Midwest?
        Dr. Piervincenzi. Thank you, Congressman.
        We actually do incorporate, for most products, the port of
    entry. But your question opens up something that we would be
    very interested to explore, which is that is only one step in
    that process.
        How else--what are the other links between that the map
    does not currently contain? But it is an answerable question.
    So I would be interested to follow up on that.
        Mr. James. Thank you for your feedback and advice. I look
    forward to following up with you.
        Mr. Chairman, that is all I have. I yield.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the gentleman from Massachusetts,
    Mr. Auchincloss, for 5 minutes of questioning.
        Mr. Auchincloss. Thank you, Mr. Chairman. I am going to
    change my name to Mr. Jones for you.
        I appreciate the expert testimony this afternoon.
        Mr. Murphy, I want to engage with you, please, and first
    just by stating there is so much debate in Congress--rightfully
    so--on expanding access to prescription drugs. And one of the
    best answers is staring us right in the face, which is
    genericization of drugs. It is the most effective way to ensure
    that people have affordable access to medications.
        And if I am correct, actually, Americans--unlike with brand
    prices--Americans actually pay less for generic drugs than
    people overseas.
        So it is a real success story. There is debate in this
    committee, of course, about maybe the right amount of time
    before drugs go generic. But they should go generic without
    undue delay. And we want to see a successful generics and
    biosimilars sector.
        I appreciated the commentary you provided at the front end
    of this about maybe an industrial policy surrounding generics
    manufacturing.
        I will be candid. I am not sure I agreed with the middle
    parts of your recommendations, which sound more like subsidies
    and tax breaks. But the first and last thing you said I really
    liked, and I want to dig into those a little bit.
        The first was basically demand signal for enhanced
    production of generic drugs, particularly sterile injectables.
        Can you talk about proposals that have been made around
    having DSH hospitals aggregate as group purchasing
    organizations and providing a premium for those sterile
    injectables for a sustainable supply chain? What is your view
    on those?
        Mr. Murphy. Yes, Mr. Auchincloss. Thank you for the
    question.
        I think the current state of the market demands any
    creative solution that will help provide certainty to
    manufacturers that there is going to be a market at a
    sustainable price for them to invest in the kind of domestic
    manufacturing we would like to see.
        Mr. Auchincloss. Is that sort of DSH premium approach
    something that you would be amenable to?
        Mr. Murphy. So I would have to talk with our manufacturer.
    I would love to follow up with your office. I haven't explored
    that in depth, though.
        Mr. Auchincloss. Great. It would build on some examples
    that we have already seen with hospitals grouping together in
    group purchasing organizations for a sustainable supply chain.
        The last thing you talked about was PBMs and, basically,
    the role of these intermediaries, these drug-pricing middlemen
    in distorting healthy incentives. And I want to dig into that,
    particularly on biosimilars, because the biosimilar market has
    been working better but not working well enough.
        I believe 86 percent of brand biologics that are eligible
    for biosimilar competition still don't have a biosimilar under
    development. And there are a lot of reasons for that. But that
    is a big opportunity cost. That is probably about $100 billion
    of spending that could have been genericized.
        Talk a little bit about how PBMs are playing the rebate
    game to try to keep biosimilars out of the market.
        Mr. Murphy. Yes, this is an issue we have studied
    extensively because we are missing a lot of opportunity, and we
    are ceding ground to Europe, candidly.
        The PBM environment has favored those manufacturers that
    can afford to pay very large rebates or have a large product
    portfolio that is rebatable that can prevent generic access. In
    one of the most famous examples of a product right now that has
    multiple biosimilar competitors, the brand manufacturer retains
    over 80 percent market share multiple years after. And it is
    infecting investment in the future.
        Mr. Auchincloss. Right. Providing the safe harbor to the
    anti-kickback provision does not seem like it was great policy
    from the 1990s. Maybe we should rethink that.
        Mr. Murphy. We would love to work with the committee on a
    number of areas to get that out of the way.
        Mr. Auchincloss. Now, the PBMs are also starting to do
    their own biosimilar manufacturing. Give us, like, 30 seconds
    on that and whether that is a good idea.
        Mr. Murphy. So it is challenging because, in the one hand,
    we want to promote biosimilar adoption, but we also want to
    promote the investment that is necessary to bring new
    biosimilars to market. And if standalone generic and biosimilar
    manufacturers don't see a signal that investing in that next
    generation of biosimilars is going to be worthwhile from a
    portfolio standpoint, they will stop investing in that.
        And so if we see follow-on products that don't help the
    market but in fact favor particular individual companies, it is
    going to be a challenge to the overall market.
        Mr. Auchincloss. I am not sure I fully tracked on that. Are
    you saying that the PBMs running their own biosimilar
    manufacturing is a net negative for biosimilar competition?
        Mr. Murphy. I think it is a challenge for those folks who
    are trying to innovate new biosimilars.
        Mr. Auchincloss. Got it.
        Quickly, in our last 30 seconds, FDA's role, given the
    staffing cuts in biosimilar interchangeability studies.
        Mr. Murphy. Yes, so we are pretty much in agreement with
    FDA that we need to optimize that process and take costs out of
    the system. And we look forward to working with Congress to try
    and codify that over the years.
        Mr. Auchincloss. Do you have confidence, given the radical
    reorganization and cuts at the FDA, that they have the
    personnel and expertise to do that?
        Mr. Murphy. I think they could always use more support.
        Mr. Auchincloss. I yield back.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the gentleman from Oregon, Mr.
    Bentz, for 5 minutes of questioning.
        Mr. Bentz. Thank you, Mr. Chair.
        And thank all of you for being here.
        Mr. Cashman, I am interested in balance. And, I guess, the
    question is, is there a restriction that we can impose on China
    if they choose to impose a restriction on us?
        And this is a broad general question because, as I listen
    to this, I am trying to figure out whether the issue is fear of
    someone withholding stuff or price.
        But go ahead and just tell me, are we currently in balance
    or out of balance?
        Mr. Cashman. Congressman Bentz, that is a very interesting
    question. I think we have to think as a nation how much
    dependence do we want on a foreign nation like China?
        Right now, in the case of amoxicillin, 80 percent of the
    starting material used to make the API--it is called 6-APA--
    comes from China. We are very, very dependent. And therefore, I
    think, things are very much out of balance. We are so dependent
    upon China in the case of amoxicillin.
        Mr. Bentz. I think you indicated earlier that the challenge
    for you is what, in expanding your footprint in that space from
    5 percent to something higher? Is it price? You said something
    about contracts, and I wasn't quite clear on what the
    restriction was when it came to contracts.
        Mr. Cashman. One of the challenges we face is contracts,
    yes. Contracts give us consistency. It gives us stability. It
    allows us to make investments in personnel and in equipment.
        So those long-term contracts--and we have had some success
    on the commercial side with that, but we haven't had success
    yet on the governmental side.
        Mr. Bentz. And why not?
        Mr. Cashman. I can't explain that, sir.
        Mr. Bentz. Does it have something to do with the bid
    process preventing long-term contracts? Is it on the Government
    side of the equation, or is it on your side of the equation?
        Mr. Cashman. I think it is on the Government side of the
    equation. The Government's focus is very much on price. There
    are some structural issues. For example, in cases they are
    looking for purchasing from small business entities and things
    like that. Through our organizational structure, we are not a
    small business.
        Mr. Bentz. Let me hop ahead. The issue--the tradeoff seems
    to be price versus everything else. So if China is going to be
    subsidizing everything that they do in China, then is our
    market system such that we cannot compete because everything is
    all about price? Is that what you are really saying?
        The only way we can ever get even is if we decide we want
    to pay a higher price, because we can certainly get it for less
    from China, but we lose the security situation. That is what
    you are trying to call out, isn't it?
        Mr. Cashman. Well, price is an important aspect and that I
    think it affects all of us. And, yes, China and India have
    different ways of looking at the economic market than we do.
    They made decisions to have much lower prices. And in some
    cases, we are dealing with competition that is below our cost
    of production.
        Mr. Bentz. Right. Well, it seems to me we face this
    situation in any space that China chooses to focus upon, which
    is a lot of them. Steel is a good one to talk about for a
    moment. They can produce steel, what, 30 percent more than
    everybody actually needs.
        So what I am trying to get at here, the common theme seems
    to be if we want to be secure, we are going to have to pay
    more. Is that a correct statement?
        Mr. Cashman. Congressman, I think in general that is the
    case. We will have to pay more.
        Mr. Bentz. OK. Let me flip over to Mr. Piervincenzi.
        What prevents China right now from withholding stuff that
    we actually need? Is it world opinion? We see it happening now
    in the context of negotiations with China. They are withholding
    rare earth minerals, and we have chips and perhaps certain
    types of stuff we use in fracking. So there is kind of a little
    bit of a balance there, not much.
        But what prevents us from right now being in real trouble
    in this space?
        Dr. Piervincenzi. I am not sure anything prevents it at the
    moment.
        I would say that the key starting materials that we talk
    about here in medicine are probably the most equivalent to your
    rare earth metals. And most of those are probably going to
    India for production, but these routes and channels are well
    understood if you are the owner of those key starting material
    plants.
        I would say that here in the U.S. we actually don't know
    where these key starting materials are yet. And that is why we
    are working on that data source.
        We hope to be done with that in the next few months, and we
    will finally have the answer as to where we are vulnerable, and
    then we can start to try to correct it one drug at a time. I
    don't think there is a shortcut to it.
        Mr. Bentz. To what do you attribute our current--I don't
    want to say lack of preparedness, but it appears that we are.
    Are we not prepared?
        Dr. Piervincenzi. The key starting material topic is really
    chemicals. And the chemicals industry has mostly left the U.S.
    decades ago. And while there are also API dependencies, and
    that is not without some challenge, it is even more of an issue
    upstream, just as Mr. Cashman has described.
        Mr. Bentz. Thank you so much. Yield back.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the gentleman from Ohio, Mr.
    Landsman, for 5 minutes of questioning.
        Mr. Landsman. Thank you, Mr. Chair and to the ranking
    member, for today's hearing.
        The importance of strengthening domestic manufacturing in
    the healthcare supply chain is hugely important to all of us,
    certainly in southwest Ohio.
        We have--and I want to just share--a company called Emerge
    Manufacturing in southwest Ohio. It is led by a woman named
    Cynthia Booth. She was this incredible entrepreneur and was
    going to retire and then realized that we had this issue during
    COVID and that we should be doing more of the PPE manufacturing
    here in the United States and, in her mind, in a community
    where folks don't really have access to these good-paying jobs.
        So she sort of emerged out of what was retirement to build
    Emerge Manufacturing, and it is now up and running. They are
    producing PPE, all kinds of other things for the healthcare
    space.
        And it is in a neighborhood called Bond Hill, historically
    Black neighborhood, predominantly Black neighborhood where she
    grew up, and now they are manufacturing all of this. And the
    majority of people who work there are from Bond Hill, which is
    just an incredible story, and I wanted to share.
        And if you are ever interested in coming and spending time
    in Cincinnati and seeing Emerge Manufacturing, we would love to
    have you--anyone from the committee too.
        She and others rely on the FDA to get their PPE approved.
    And that is why the FDA's job, as it relates to the domestic
    supply chain, is so important.
        In April of 2025, the GAO released a report to Congress
    about drug shortages entitled ``HHS Should Implement a
    Mechanism to Coordinate Its Activities.'' Makes perfect sense.
    In the report, the GAO stated that the FDA, Congress, and
    academic experts have reported that collaboration across
    Federal agencies is important to address drug shortages and
    enhance supply chain resiliency because each agency has a
    unique role in the supply chain.
        HHS then creates a Supply Chain Resilience and Shortages
    Coordinator--not a great name but a great cause, makes all the
    sense in the world--somebody who is going to lead the
    coordination across the agencies. They do this in 2023,
    November 2023, a position within the Office of the Assistant
    Secretary for Planning and Evaluation.
        It was funded through 2027. Last month, however, the Trump
    administration eliminated the role. HHS no longer has the
    mechanism to coordinate drug shortage activities across the
    Department.
        Ms. O'Connell, question: As Assistant Secretary for
    Preparedness and Response, how was the office working with
    other agencies within HHS, including the FDA, to strengthen the
    domestic supply chain?
        Ms. O'Connell. Thank you, Congressman.
        I think that is a great example of the need to coordinate
    within the Department that we always were dealing with.
        But the role of the supply chain coordinator was
    extraordinarily important during my tenure there. You have lots
    of independent agencies within HHS, each having their own
    agenda, each having their own constituencies that they are
    working towards. We needed someone sitting on top of all of
    that, tying the threads together, to ensure that we were moving
    forward in the way that we needed to, in a unified way, on
    behalf of the Department and on behalf of the White House.
        Mr. Landsman. Can anyone on the panel give a reason for why
    they would just eliminate the position?
        OK. None.
        It doesn't seem like it was a smart idea.
        But the position is now gone. HHS also has identified
    something like 10,000 employees to be fired.
        Is the Department equipped to coordinate a response in the
    case of a supply chain issue, as we had one several years ago?
        Ms. O'Connell. So it is hard for me to know, since I am on
    the outside now, what it feels like on the inside. But what I
    can say is that the role of the coordinator was important.
        And the coordinator didn't just coordinate within the
    Department. They coordinated across departments. And there are
    lots of other pieces of the supply chain, departments and
    agencies throughout the Government, that have roles to play. We
    have talked about tariffs and other incentives.
        So having somebody sitting on top of all of that was really
    important. And we need somebody, I think, who can do that
    again.
        Mr. Landsman. I agree. And this maybe is something that
    this committee could take up. It seems like a simple enough
    thing to do, to say, ``Hey, why don't we put the coordinator
    back on the job?'' Because we all agree that increasing the
    domestic supply and domestic manufacturing is really important.
        That is my time. Thank you very much. I yield back.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the gentleman from Texas, Mr.
    Crenshaw, for 5 minutes of questioning.
        Mr. Crenshaw. Thank you, Mr. Chairman. Thank you for
    holding this hearing.
        Thank you to our witnesses.
        I think too often we don't treat domestic drug
    manufacturing like the national security issue it is. But it is
    one, especially when we are depending on foreign nations, often
    adversarial ones, for critical medicines or their ingredients.
    We are handing them leverage. That is not good. It is a
    dangerous game to play.
        And it leaves us vulnerable when we are in crisis, whether
    it is a pandemic, a supply chain disruption, geopolitical
    tensions, whatever it is.
        And in my district, I am proud to say our citizens are not
    waiting around. They are acting. San Jacinto College, Lone Star
    College leading the way, training the next generation of
    biomanufacturing and biomedical engineering professionals.
    These students will fill those gaps in the workforce, help
    build the domestic capability that we really should have
    prioritized a long time ago.
        We are seeing investments too. Bionova is a company that
    recently put $100 million into a new plasma DNA manufacturing
    facility in my district in The Woodlands.
        And it isn't a coincidence. It is a signal. I think
    companies are choosing Texas because they see the promise of a
    strong, skilled workforce and a business environment that
    supports innovation and growth.
        But we have got a long way to go. Nearly 80 percent of
    biopharma companies, many of them small and emerging biotech
    firms, still have to rely on contract manufacturing or contract
    manufacturers in China. That should set off a lot of alarm
    bells.
        If we are serious about building biomanufacturing capacity
    here, then we have got to take a hard look at the regulatory
    and policy roadblocks that are standing in the way. We have to
    fix what is making the U.S. less competitive. And we should do
    it now before we are caught flat-footed again in the next
    crisis.
        Mr. Murphy, we have seen Congress move pretty quickly,
    actually, to streamline permitting specifically for
    semiconductors under the CHIPS Act, carving them out from the
    National Environmental Policy Act, NEPA.
        Given the strategic importance of--and I bring that up
    because that was a recent bill, and it was something that
    Democrats and Republicans came together on, NEPA reform, but
    just for this one thing that we can agree on because we need
    more chips, OK? Seems like a--that is interesting. That is a
    pathway to agreement.
        Given the strategic importance of pharmaceutical
    manufacturing, do you think similar carve-outs for
    pharmaceutical facilities are warranted? Would removing these
    regulatory hurdles, while also protecting the environment
    through pared-back, I think more efficient review processes--
    would that help accelerate domestic buildouts?
        Mr. Murphy. Yes, Mr. Crenshaw, thanks for the question.
        We certainly agree that permitting is one thing that can
    delay significant investments and really stand in the way of
    getting our domestic manufacturing base back online,
    particularly in the generic pharmaceutical space where cost is
    such a significant driver.
        And so I think we saw in the President's Executive order
    that talked about permitting reform in the medicine space is
    something that we could work collaboratively with Congress to
    try and ensure that we both protect our environment but also
    not let the abnormally long permitting processes stand in the
    way of getting that domestic investment online.
        Mr. Crenshaw. Yes, I appreciate that. And, again, we have
    done it before in a bipartisan way, and I hope we can do it
    again in this Congress. Even if we can't get full NEPA reform,
    at least we could do it for certain industries.
        Dr. Piervincenzi--did I get that? OK.
        Dr. Piervincenzi. Thank you.
        Mr. Crenshaw. USP has worked on digital quality
    infrastructure advancing manufacturing mapping. What
    capabilities exist right now today for really understanding and
    fully mapping the U.S. pharmaceutical supply chain using that
    technology?
        Dr. Piervincenzi. So we are a lot closer than 2019 when we
    started. Many of the things that--the supply chain is complex,
    we don't know what it is. We can answer most of those questions
    already today. And in just a few months, we will be able to
    talk about that even on down to the level of key starting
    materials, which means we are getting very close to having the
    information of what is where, and we start to have to do the
    next thing, which is what we do about it.
        And that is not a dead end, because there are additional
    analyses we can do that open up those opportunities for
    domestic manufacturing. So how else can we make those
    medicines? How else can we produce an API through different key
    starting materials that maybe are available either near shore
    or domestically?
        And they are one at a time. There are solutions. But they
    are solvable. They are solvable one time. And then we can think
    about the incentives and the other things we have talked about
    here today to reduce the barriers to those investments that are
    very hard for generic companies today to make those
    commitments. We see it, the lack of investment in advanced
    manufacturing. It is almost at zero within the generic industry
    today.
        Mr. Crenshaw. I want to get one more question in for Mr.
    Murphy.
        Regarding the FDA's current good manufacturing practice
    enforcement, what tools, if any, exist within FDA's own
    compliance and inspection regime to tip the scales towards
    domestic production?
        Mr. Murphy. Yes, I mean, certainly, FDA could signal their
    willingness to speed up inspections for newly brought online
    generic manufacturing facilities in the United States.
        I think understanding that that inspection paradigm is on
    the horizon and set up stably would give folks the
    understanding that that investment has a timeframe at the end
    of it which requires FDA inspection is more certain.
        Mr. Crenshaw. OK. I appreciate that.
        And yield back.
        Mr. Carter of Georgia. The gentleman yields back.
        The Chair now recognizes the gentleman from Louisiana, my
    first cousin, Representative Carter, for 5 minutes of
    questioning.
        Mr. Carter of Louisiana. Thank you, my dear cousin. Thank
    you, Chairman and Ranking Member, for holding this hearing.
        Thank you all for being here.
        As the only member of the committee from Louisiana, I know
    how important a resilient supply chain and resources, like the
    Strategic National Stockpile, are for States like mine,
    especially during natural disasters and public health
    emergencies.
        In fact, I am proud to share that Louisiana has been and
    continues to be a leader in this space. In 2020, during the
    COVID-19 pandemic, Ochsner Health and SafeSource Direct, a
    U.S.-based PPE manufacturer, formed a partnership to step up
    and address the Nation's shortages of gloves, masks, and other
    critical PPE needed to protect our healthcare workers on the
    front lines.
        Efforts like this and the Federal investments allow to
    expand domestic manufacturing and bolster the supply chain to
    ensure we are all well prepared for when the next--not if--but
    when the next natural disaster or public health emergency hits.
        I look forward to hearing from our witnesses today and
    discussing how Congress can strengthen our medical supply chain
    and expand domestic manufacturing.
        Ms. O'Connell, we know that the--from this committee,
    Louisiana--and what I have mentioned to you earlier, Louisiana
    is paving the way for domestic manufacturing in the healthcare
    space through Ochsner and SafeSource Direct. They are also
    currently in the process of standing up a rubber facility to
    fill the U.S. gap in domestic raw materials, such as rubber,
    which is needed to create gloves and PPE.
        From your perspective, as someone who previously served at
    HHS, how can the Federal Government work to ensure there is a
    domestic market to support the sale of domestic raw materials
    and end products?
        Ms. O'Connell. Congressman, thank you so much for that
    question. And I think the SafeSource example is one that we
    have been trying to--or that the Federal Government should
    think about replicating in other places.
        What is important about what SafeSource was able to do,
    they were able to solve one of the problems that we continued
    to run into in other situations, which was making sure that
    there was a market for the PPE that was manufactured even after
    the emergency.
        And because a hospital system like Ochsner committed to
    purchasing SafeSource's PPE, we were able to keep SafeSource in
    business, and Ochsner had the high-quality, domestically
    manufactured PPE that it needed.
        Finding similar hospital partners across the country with
    other investments we have made should be a priority of the
    current----
        Mr. Carter of Louisiana. Proud to have Louisiana leading
    the way there.
        The Strategic National Stockpile is important to States
    like Louisiana. To what extent does the stockpile support and
    utilize domestically manufactured products, such as gloves and
    PPE?
        Ms. O'Connell. Whenever possible, we tried to restock with
    domestically manufactured goods. It is important, and as I said
    in my opening testimony, that we have 90 days of this emergency
    supply to be able to get us through those first early days of
    anything that comes next.
        Mr. Carter of Louisiana. Thank you.
        Ms. O'Connell. Yes.
        Mr. Carter of Louisiana. Mr. Murphy, thank you for being
    here with us here today and talking about the challenges with
    domestically manufactured generic drugs.
        As you know, FDA reviewers are tasked with conducting
    inspections, and new manufacturing facilities and manufacturers
    are required to comply with good manufacturing practices.
        How would RIFs at FDA impact the agency's mission to carry
    out this work and exacerbate the challenges you shared?
        Mr. Murphy. Yes, Mr. Carter, thank you for the question.
        And early on, when the initial RIFs were announced, we saw
    that it was a lot of support staff in the Inspections Division,
    which raised a lot of concern in the industry, because it is
    one thing to have qualified inspectors, and a sufficient amount
    of them, but you also need that support staff to help FDA
    conduct all of the inspections and the logistics associated
    with that.
        We have been tracking very closely whether or not there
    have been deficits in inspections. But I would point out the
    fact that, from a foreign inspection standpoint, FDA is still
    not getting back to the levels they had pre-COVID of being able
    to conduct foreign inspections. And the industry, actually,
    would like to see more capacity in that space.
        Mr. Carter of Louisiana. So what happens, how does this
    continue to slide down the slope if we don't do something
    differently?
        Mr. Murphy. Yes, so I think right now it is affecting the
    ability to get more product in the market at a lower price. I
    think we are seeing FDA trying to triage that, but ultimately
    we need to see FDA funded at a level that allows it to have a
    fully functioning inspection force.
        Mr. Carter of Louisiana. Either of you can answer this.
        And how have the on-again/off-again tariffs impacted
    manufacturing? We will start with you, Mr. Cashman, and then we
    will go down, if we can. I have got about 13 seconds, so can
    you--whoever wants to answer, answer quickly. You can, if you
    are ready, Mr. Murphy.
        Mr. Murphy. I will just say it creates uncertainty and it
    requires companies to make----
        Mr. Carter of Louisiana. And uncertainty kills business,
    doesn't if? It hurts our economy. The uncertainty of not
    knowing if we are able to do business or not is one of the
    leading factors of why businesspeople complain, they don't have
    the certainty of being able to conduct business.
        My time is over. I yield, Mr. Chairman.
        Mrs. Cammack [presiding]. The gentleman yields.
        The gentleman from New Jersey, Mr. Kean, is recognized for
    5 minutes.
        Mr. Kean. Thank you, Madam Chairwoman.
        I want to thank our witnesses for being here today. I am
    very interested in learning about our medical supply chains,
    especially in the biotechnology space.
        New Jersey has a thriving biotech industry for both brand-
    name and generic drugs. I have been pleased to see several
    companies make investments in the Garden State. These include
    Ferring, Roche Diagnostics, Amneal, Novartis, and BeOne
    Medicines, amongst others.
        I am also a member of both the Energy and Commerce
    Committee as well as the House Foreign Affairs Committee. In
    that committee, we are working on legislation to be--to
    reauthorize the State Department.
        I look forward to learning if I can use that work to build
    resilience and transparency in our medical supply chains.
        Mr. Bolin, the med spa case that you cited in your
    testimony involved active pharmaceutical ingredients sourced
    from an unregulated international online supplier.
        What challenges does NABP face in tracking and preventing
    the importation of counterfeit or substandard APIs or GLP-1
    drugs?
        And what can Congress and the U.S. Government do to
    strengthen international partnerships, such as with custom
    agencies or to better address this issue?
        Mr. Bolin. Sure. Thank you for the question, Congressman.
        So on the issue of med spas, I will say first there are
    legitimate operators that do things the right way and compound
    correctly, but our members are seeing that most of the scary
    and egregious things that are happening are happening in these
    largely unregulated facilities.
        So you have instances where you have unlicensed
    practitioners that are never inspected, are setting things up
    in their homes or, you know, scarily, in their bathtubs. And,
    frankly, a lot of the boards of pharmacy actually lack the
    jurisdiction to go in and inspect these facilities, so they
    will at times have to work with the board of nursing or work
    with the medical board or refer to the attorney general's
    office.
        So from a congressional perspective, any sort of visibility
    Congress can continue to shine on this issue will help, because
    there are, we believe, thousands of these locations that will
    never see a regulator come in the door. And so when you think
    about them obtaining this API from unregistered forces, like,
    that is really, really scary when you think that people are
    injecting these things into their body.
        Mr. Kean. Thank you.
        Mr. Cashman, my district has a number of pharmaceutical
    manufacturers, both brand name and generics space. Can you
    speak to the challenges you have faced operating domestically?
    And, additionally, what can Congress do to ensure that the
    companies that are choosing to do manufacturing domestically
    can continue to do so?
        Mr. Cashman. Thank you, Congressman. Great question.
        I think, you know, I talked about the issue of prices
    before. And I just want to emphasize that the difference in
    prices between us and many other foreign--foreign generic
    suppliers is not very big. It is somewhere between 10 and 20
    percent in many cases. And in a few cases in government
    contracts where we have checked that, we can actually offer
    better prices than the Government paid through the Government
    contracting suppliers.
        So we could do better on some of the prices, but we do--we
    have and we have lost business for 10 cents a bottle on the
    commercial side. So that is very challenging but I think one of
    the things that would definitely help everyone, I think, in the
    generic industry have more stability and have the ability to
    have long-term contracts, which will allow us to plan and--plan
    our capital and expansion and scale up businesses in an
    efficient way.
        Mr. Kean. Thank you.
        Dr. Piervincenzi and Mr. Murphy, the FDA recently announced
    its plans to expand the use of unannounced inspections at
    foreign manufacturing facilities. Can you explain how this
    policy change will impact efforts to increase supply chain
    resilience and even domestic manufacturing?
        Mr. Murphy. So thank you for that question, Mr. Kean.
    Actually, I think there are net positives in the ability to
    ensure that FDA has the flexibility to get in the facilities
    overseas and provide the public with assurances of the safety
    of the medicine supply chain. So, you know, I think we look
    forward to working with the agency to try and expand inspection
    capacity both domestically and overseas to help ensure that we
    have a stable flow of medicines that come in to patients.
        Mr. Kean. Thank you. Doctor?
        Dr. Piervincenzi. Thank you for that question. Very much
    like FDA, USP has set up facilities with teams in India and in
    China for specifically that purpose, which is a risk-based
    approach to all assurance of quality medicines. You have to
    show up where you think the risks are, and you have got to have
    enough resources. Otherwise, you are just inspecting in your
    back yard, and that is not only not effective, but it is
    actually not fair to domestic manufacturers.
        Mr. Kean. Thank you to all the panel of witnesses.
        I yield back.
        Mrs. Cammack. Thank you. The gentleman yields.
        The Chair now recognizes herself for 5 minutes. I know that
    is strange.
        So by now it has been made clear, as we come to the
    conclusion of the hearing, that depending on adversarial
    nations like China for lifesaving medicines, it is dangerous.
    So I am not going to repeat what has already been said here
    today. Instead, I want to talk about some solutions.
        So we have American manufacturers ready to produce the
    antibiotics, the generics, the APIs that our system depends on,
    but they are getting crushed by subsidized competition from
    China and India while navigating a U.S. system that buries them
    in red tape and rewards the lowest bidder no matter where it is
    made. This is a problem.
        So if we are serious about fixing this, we need to reward
    resilience. That means long-term Federal purchasing contracts
    for essential medicines. It means fast-tracking approvals for
    domestic facilities, and it means treating pharmaceutical
    manufacturing like the national security issue that it is.
        And we also need to think bigger. Reshoring can't just mean
    the final pill or vial. It has to include the full chain,
    starting from key intermediaries and chemical inputs. If we are
    still importing the ingredients from China, we are still
    vulnerable.
        It should be about incentivizing domestic production of
    these early-stage materials to truly rebuild them from the
    ground up. And that means working closely with trusted allies
    as well, especially in Western Europe, to diversify our
    sourcing and to build in redundancy, so with one facility going
    offline it doesn't mean that we are putting other people at
    risk.
        The bottom line is that we cannot defend American lives
    with a drug supply chain that depends on the goodwill of
    Beijing or New Delhi.
        So I want to thank you all for being here as witnesses
    before this committee and for speaking on what is working, what
    is not, so that we can finally get this straight.
        Mr. Bolin, you have been highlighting the early successes
    of the Pulse platform. Now, as we work to bring pharmaceutical
    manufacturing back to the United States and rebuild resilience
    into the supply chain, I am very concerned about the
    counterfeit and substandard drugs slipping through the cracks,
    particularly from overseas sources.
        Since Pulse has launched, what are the most alarming trends
    that you have seen, whether in product type, origin, or
    distribution patterns, and what does that tell you about where
    the biggest vulnerabilities lie?
        Mr. Bolin. Thank you, Madam Chair. I think the most
    disturbing thing that we have seen is the fact that the very
    first scans that we conducted utilizing the tool found
    illegitimate and counterfeit products. And that is just in a
    handful of States that are using the tool so far.
        The reality is that where there is money to be made, bad
    actors are going to find ways to insert things into the supply
    chain. So it is going to require vigilance on the part of the
    State boards of pharmacy as well as the pharmacies themselves
    to really think about where they are purchasing their
    medications.
        I think one of the other challenges is when you have--you
    know, we have talked today a lot about what happens as products
    are being manufactured. We still have issues within the supply
    chain from the point a product enters the supply chain to the
    point it is dispensed. There is not a lot of visibility and
    transparency in the supply chain.
        And so I would encourage Congress to think about ways that
    you can start to unlock some of the capabilities that do exist.
    The fact that this law--and you can track a product down to the
    saleable unit, that unlocks the ability to really trace
    medications and address issues like drug shortages, keeping
    illicit medications out of the supply chain.
        So I think let's leverage the investments that has already
    been made. That would be what I would recommend for Congress.
        Mrs. Cammack. And you mentioned the States that have
    adopted it. What are the States that are currently utilizing
    the platform?
        Mr. Bolin. So we have over 30 States that are currently
    utilizing the platform.
        Mrs. Cammack. I am not going to make you name them all.
        Mr. Bolin. Thank you for that. But we are finding good and
    early success with that, so we are going to continue to help
    support our members so that they--and provide additional tools
    to help them detect counterfeit medication.
        Mrs. Cammack. OK. In the interest of time--I have got about
    a minute left. So you talked about the--needing transparency in
    the supply chain, and you said Congress needs to do more in
    that space.
        So as we are effectively working to reshore the production
    and reinforce the supply chain, how can we ensure that some of
    the regulatory tools, like Pulse, don't detect--that just don't
    detect threats but actually help eliminate them as well?
        Mr. Bolin. And so when you speak about that supply chain
    visibility, it is really getting members of the supply chain to
    be more transparent and communicate with each other. There is
    so much information that is moving from the point of
    manufacture to distribution to dispensing, but no one shares
    that. It is only when they have to share it.
        And so I think the supply chain being incentivized to
    actually do something, like the national control tower that
    existed back during COVID, that was some of the most widespread
    visibility that the supply chains had after the point of
    manufacture, and I think that is another opportunity to
    consider.
        Mrs. Cammack. I would have more for you that I would like
    to follow up on, but I have run out of time. So my time has
    expired.
        I yield to the gentleman from California, Mr. Obernolte.
    You are recognized for 5 minutes.
        Mr. Obernolte. Thank you very much. I want to thank our
    witnesses. This has been a really valuable hearing for me.
        I represent, obviously, a district in California. But
    because of all the biopharmaceutical research and innovation
    that occurs in California, particularly at our public
    institutions, it is obviously of critical interest that we make
    sure that our supply chains are resilient.
        If I could start with Mr. Cashman, I was really interested
    in your testimony about how to make our supply chains more
    resilient. And I thought it was poignant, you know, the story
    that you told about when we allow our supply chains to be
    opaque and complex, how when we have an unforeseen shortage,
    those supply chains can't respond. And you offered, I thought,
    some really meaningful suggestions for improving that
    situation.
        But one of the things I was curious about, it seems like--
    as a free market guy myself, it would seem like market
    reactions would catalyze some of the solution to that problem.
    For example, one of the things you suggested was long-term
    supply contracts. But if you are someone that has consistent
    demand for a drug like amoxicillin and you have experienced a
    situation where supply is constrained and, therefore, the
    market reacts by raising prices up to astronomical levels, you
    would think that would incentivize you, just from a financial
    perspective, to diversify your supply chains.
        Why is that not the case?
        Mr. Cashman. Congressman, it is exactly that. We have had
    commercial--people in the commercial market, customers of ours,
    approach us for long-term contracts because of the instability
    of supply during 2022 and 2023. Those are, I think, very
    knowledgeable and innovative people who want to avoid problems
    for a critical drug like amoxicillin.
        Unfortunately, much of the market is still very much
    focused on price. And as I said earlier, 10 cents a bottle for
    a product that sells for $3.40, sometimes people walk away from
    us as a U.S. supplier for a foreign supplier.
        Mr. Obernolte. It would just seem to me that there is a
    commercial incentive to not do that when you are aware that
    locking yourself into a foreign supply might mean a lack of
    availability, and paying just a couple cents more now for a
    long-term contract would ensure that that doesn't happen, just
    from a dollars and cents standpoint would seem like people
    would be incentivized. But thank you for the response.
        Dr. Piervincenzi, one of the things that I thought was
    really interesting about your testimony is the criticality of
    manufacturing innovation here in the United States and,
    obviously, that is something that would make our domestic
    manufacturers more competitive, it would simplify our supply
    chains, it would incentivize domestic production.
        But, I mean, just to play devil's advocate for a moment,
    even if we came up with innovation here, in short order, isn't
    that going to be duplicated elsewhere in the country? It
    doesn't seem to me like--although it is a desirable thing, it
    doesn't seem to me like that is a long-term solution to the
    problem.
        Dr. Piervincenzi. So 100 percent, we should assume so. I
    think that is safe to say for just about any innovation
    anywhere ever. However, the advantage of advanced manufacturing
    in the U.S., it is a bigger advantage in the U.S. domestically,
    meaning it offers you lower environmental footprint, it works
    with lower labor costs. These are bigger advantages here than
    they will be in a lower-cost environment.
        And so, while it is just as useful a technology, the
    benefit compared to the older technology is higher in the U.S.
        Mr. Obernolte. Interesting. So it gets right at some of the
    things that make U.S. manufacturers uncompetitive. That is
    interesting.
        Dr. Piervincenzi. It is true. And if I might just add one
    thing. The challenges at the facilities that we currently have,
    they are 20-, 25-year lifespans. The cost of a new facility,
    including for advanced manufacturing, doesn't seem extremely
    high when you look at an innovator drug and the potential for
    revenue. But for generic companies, it is out of reach at the
    moment.
        And so USP, we are working with some other partners to try
    to reduce that barrier at least somewhat, but it is going to
    take something more. It is going to take some incentives to get
    over that hurdle--
        Mr. Obernolte. Sure. I think Mr. Cashman was talking about
    hundreds of millions of dollars.
        Mr. Murphy, if I could end with you. In your testimony, you
    said that one of the things that is constraining domestic--our
    domestic ability to create supply, to manufacture supply, is
    labor shortage. What can we do about that?
        Mr. Murphy. Yes, that is the most long-term problem that we
    have, right, because we have to start imbuing more STEM
    education and more embodiment of trade-type education into our
    system.
        I mean, I don't like always talking about that, because it
    is the one that is the most difficult to address. We had a long
    discussion in this country earlier last year about H-1B visas
    because we realized so much high-skilled manufacturing was
    necessary, and we didn't have the supply. But I think we need a
    mobilization of how we educate and how we prioritize the
    education that is in the United States to show what the job of
    the future will look like.
        Mr. Obernolte. Right. I completely agree. And it is not
    just pharmaceutical manufacturing that is suffering with this
    problem, it is lots of different fields that we want to keep
    America at the forefront of.
        I want to thank everyone for their testimony. I have really
    enjoyed the hearing.
        I yield back.
        Mrs. Cammack. The gentleman yields.
        The Chair will yield to the ranking member for a few brief
    comments.
        Ms. DeGette. Thank you. It looks like we are about to end.
    I really want to thank you, Madam Chair, and also the actual
    chair of the subcommittee, Mr. Carter.
        Listening to this panel, it is really clear that these are
    issues, they have always been bipartisan issues, they are
    American issues, and I think we can all work together to solve
    them. We need to recognize the situation we are being faced
    with right now and then work on that.
        I just do want to expand on the record a minute. The
    gentlelady from Iowa talked about a North Carolina facility
    that is being built right now, and that is for pipette tips.
    That was funded with $79.9 million from the American Rescue
    Plan. And so we all think that there is a role for government
    in this, and we should really work together to figure out how
    we can make it happen.
        And I yield back.
        Mrs. Cammack. The ranking member yields.
        At this time, I ask unanimous consent to enter into the
    record documents included on the staff hearing document list.
        Without objection, so ordered.
        [The information appears at the conclusion of the hearing.]
        Mrs. Cammack. And I would like to thank again all our
    witnesses for being here today. Members may have additional
    written questions for you all.
        I will remind Members that they have 10 business days to
    submit questions for the record, which really means staff. And
    I ask the witnesses to respond to the questions promptly.
    Members should submit their questions by the close of business
    Wednesday, June 25.
        So without objection, the subcommittee is adjourned.
        [Whereupon, at 1:12 p.m., the subcommittee was adjourned.]
        [Material submitted for inclusion in the record follows:]
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