[Senate Hearing 119-359]
[From the U.S. Government Publishing Office]
S. Hrg. 119-359
TRUTH IN LABELING:
AMERICANS DESERVE TO KNOW
WHERE THEIR DRUGS COME FROM
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HEARING
BEFORE THE
SPECIAL COMMITTEE ON AGING
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC
__________
JANUARY 29, 2026
__________
Serial No. 119-23
Printed for the use of the Special Committee on Aging
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
63-403 PDF WASHINGTON : 2026
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SPECIAL COMMITTEE ON AGING
RICK SCOTT, Florida, Chairman
DAVE McCORMICK, Pennsylvania KIRSTEN E. GILLIBRAND, New York
JIM JUSTICE, West Virginia ELIZABETH WARREN, Massachusetts
TOMMY TUBERVILLE, Alabama MARK KELLY, Arizona
RON JOHNSON, Wisconsin RAPHAEL WARNOCK, Georgia
ASHLEY MOODY, Florida ANDY KIM, New Jersey
JON HUSTED, Ohio ANGELA ALSOBROOKS, Maryland
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McKinley Lewis, Majority Staff Director
Claire Descamps, Minority Staff Director
C O N T E N T S
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Page
Opening Statement of Senator Rick Scott, Chairman................ 1
PANEL OF WITNESSES
John Gray, Ph.D., Dean's Distinguished Professor of Operations,
Fisher College of Business, The Ohio State University,
Columbus, Ohio................................................. 3
Michael Ganio, Pharm.D., Senior Director, Pharmacy Practice and
Quality, ASHP, Bethesda, Maryland.............................. 5
Stephen W. Schondelmeyer, Pharm.D., Ph.D., Professor of
Pharmaceutical Management & Economics, College Of Pharmacy,
University of Minnesota, Minneapolis, Minnesota................ 7
Stephen Colvill, Assistant Research Director, Duke-Margolis
Institute for Health Policy, Washington, D.C................... 10
APPENDIX
Prepared Witness Statements
John Gray, Ph.D., Dean's Distinguished Professor of Operations,
Fisher College of Business, The Ohio State University,
Columbus, Ohio................................................. 28
Michael Ganio, Pharm.D., Senior Director, Pharmacy Practice and
Quality, ASHP, Bethesda, Maryland.............................. 34
Stephen W. Schondelmeyer, Pharm.D., Ph.D., Professor of
Pharmaceutical Management & Economics, College Of Pharmacy,
University of Minnesota, Minneapolis, Minnesota................ 42
Stephen Colvill, Assistant Research Director, Duke-Margolis
Institute for Health Policy, Washington, D.C................... 71
Questions for the Record
Michael Ganio, Pharm.D., Senior Director, Pharmacy Practice and
Quality, ASHP, Bethesda, Maryland.............................. 85
Stephen W. Schondelmeyer, Pharm.D., Ph.D., Professor of
Pharmaceutical Management & Economics, College Of Pharmacy,
University of Minnesota, Minneapolis, Minnesota................ 87
Stephen Colvill, Assistant Research Director, Duke-Margolis
Institute for Health Policy, Washington, D.C................... 109
Statements for the Record
Opening Statement of Senator Kirsten E. Gillibrand, Ranking
Member......................................................... 115
Association of Accessible Medicines Statement.................... 116
TRUTH IN LABELING:
AMERICANS DESERVE TO KNOW
WHERE THEIR DRUGS COME FROM
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Thursday, January 29, 2026
U.S. Senate
Special Committee on Aging
Washington, DC.
The Committee met, pursuant to notice, at 9:30 a.m., Room
608, Dirksen Senate Office Building, Hon. Rick Scott, Chairman
of the Committee, presiding.
Present: Senator Scott, Johnson, Moody, and Gillibrand.
OPENING STATEMENT OF SENATOR
RICK SCOTT, CHAIRMAN
The Chairman. The U.S. Senate Special Committee on Aging
will now come to order. Last year, this Committee exposed the
public health risk and national security threat posed by
America's over-reliance on Communist China and India for
generic drugs and the drug ingredients that make them, known in
the medical industry as APIs.
Together, Ranking Member Gillibrand and I led a bipartisan
effort to demand accountability. We sent letters to the Food
and Drug Administration, the Department of Veteran Affairs, and
key industry stakeholders, including large drug purchasers,
distributors, and major pharmacies.
The Aging Committee sounded the alarm and exposed the
dangers in Americans' medicine cabinets. Our Committee also
released a bipartisan report detailing the extent of these
threats and held three hearings. In the first hearing, we heard
from experts about the problems we face due to our massive
over-reliance on foreign made generic drugs. We heard
horrifying stories from a former FDA Inspector about how
dangerous and unregulated these drugs from Communist China and
India can be.
We learned about the tragic deaths caused by failures to
make sure the medicines Americans rely on to heal and treat
them are actually safe. In the second hearing, we discussed
solutions that create safer medicines, secure supply chains, so
we aren't dependent on adversaries like Communist China for our
medicines and create good paying American jobs by bringing back
drug manufacturing back to America.
In the third hearing, we heard from American drug
manufacturers about the hurdles they face when they try to ramp
up domestic production. What we uncovered during this
investigation will shock you. Ninety-one percent of
prescriptions in the United States are generic drugs.
Of those drugs, almost 94 percent use APIs, produced and
processed overseas in factories predominantly in Communist
China and India that have little to no FDA oversight. When the
FDA does make it abroad to inspect these facilities, they often
warn them in advance, which gives them time to cover up any
outstanding issues before inspectors see them. That is crazy.
Somehow, even with all this time to prepare, we still see
reports of skittering lizards and birds flying around foreign
facilities. Does that sound safe and sanitary to anybody here?
Absolutely not.
Here is the deal, we face two problems that every American
needs to understand. One is that foreign manufactured generic
drugs are made with untested and dangerous APIs from countries
like India and Communist China. That means we can't trust these
drugs because we know they are less safe than those made in
America.
The second is that fixing that problem is made difficult by
our own Government bureaucracy that blocks American drug
manufacturers and fuels our over-reliance on Communist China
and India to make generic drugs. We face not just a serious
public health risk, but a massive national security risk as
well.
Think about it. If the government of Communist China, a
self-described enemy of the United States, or India wants to
stop the supply of prescription drugs to the United States,
they can do so at any moment. If that happens, the United Sates
has absolutely no plan to keep these generic, life-saving drugs
needed by millions of Americans available.
This may sound far-fetched, but we are seeing it play out
in real time. Communist China has already limited exports of
items like rare earth minerals during the COVID pandemic. India
blocked the export of critical pharmaceutical ingredients, so,
it can happen again. If we can't solve this problem, it is only
a matter of time before more American lives are unnecessarily
lost. We cannot allow that to happen.
We must act now. This is why I am taking action to address
these threats immediately with the introduction of my CLEAR
LABELS Act. This bill will require country of origin labeling
for pharmaceuticals so that physicians, pharmacists, and most
importantly the American families taking these medicines know
where these essential drugs are coming from.
Every American deserves honesty and transparency about what
they are putting into their bodies. We label food, clothes, and
other products, but we don't require that same standard of
medicines that Americans and especially our aging population
rely on. Can anybody really disagree with that? It is wholly
irresponsible that we are living in the dark when it comes to
where our medicines are made.
My bill changes that. Under my bill, finished drug products
prescribed and sold in the United States would need to identify
the name and location of each, including API's original
manufacturer, as well as the packer or distributor, right on
the label or through a searchable electronic portal. This is a
simple and common-sense reform that will bring transparency and
accountability to our generic drug industry.
The fact is, most Americans would prefer to buy American
when they can. Unfortunately, with drugs, too often the
information about the country of origin isn't readily
available. They want to know what they are taking is safe, and
they want to support American jobs. By labeling these essential
drugs, Americans will have more information to help them make
well-informed decisions for themselves and their families.
It will also encourage more domestic drug manufacturing,
making sure generic medicines that our aging population and all
Americans rely on are more effective and readily available.
Country of origin transparency is not just a consumer right, it
is a matter of national security, public health, and American
pride.
I invite all members of the Committee to join me and co-
sponsor this legislation. We can get country of origin labeling
done now to allow stakeholders at every stage of healthcare,
especially the patient, to be confident, informed about the
medications they take. I look forward to hearing from witnesses
today on how we can empower patients to make the best choices
for themselves and their families when it comes to where their
medicines come from.
Now, I am going to turn it over to Senator Moody. I have to
go to a Foreign Relations Committee for a few minutes, and she
will take over and she is my colleague from Florida and as a
mom, she has to worry about not only the drugs she puts in her
body, but what her kids are putting in their body.
Senator Moody. Thank you, Chairman. Good morning. Thank you
so much for being here. I would like to welcome all of our
witnesses and everyone that is here today to witness this
hearing. Our witnesses are leading experts on generic drugs and
generic drug supply chains and can speak to how we ensure
Americans have access to medications that are safe and high
quality.
I would now like to introduce our first witness and if you
would like to, after I introduce you, go ahead and begin your
introduction and we will go from there. We will begin with Dr.
John Gray. Dr. John Gray is a Dean's Distinguished Professor of
Operations at the Ohio State University's Fisher College of
Business. Go ahead.
Mr. Gray. Chairman Scott, Ranking Member Gillibrand, and
distinguished members of the Committee, thank you for this
opportunity, and thank you very much for bringing so much
attention to this important----
Senator Moody. Well, I am not Chairman Scott. I have more
hair than he does. [Laughter.]. Thankfully.
You may go ahead.
STATEMENT OF JOHN GRAY, PH.D., DEAN'S
DISTINGUISHED PROFESSOR OF OPERATIONS, FISHER
COLLEGE OF BUSINESS, THE OHIO STATE
UNIVERSITY, COLUMBUS, OHIO
Dr. Gray. I want to start by saying I strongly support
giving consumers, doctors, pharmacists, and other stakeholders'
access to basic drug level information, including country of
origin and some valid assessment of drug quality risk.
This kind of transparency would allow generic manufacturers
to compete on something other than price, and it could help
slow or even stop the race to the bottom that has been present
in this industry for the past several years. For many years,
the FDA has emphasized that all generic drugs patterned after
the same original drug are exchangeable. That may have been
largely true decades ago, but today it is no longer a
defensible assumption.
There is now substantial evidence, both anecdotal and
academic, that meaningful quality differences exist among
generic drugs. Investigative reporting, academic research, and
testimony to this Committee have made clear--have made that
clear. These problems are the predictable result of intense
cost pressure combined with a highly opaque supply chain, a
product where quality is difficult to detect by touch or feel,
and as mentioned, the exchangeability assumption.
The FDA's traditional approach to ensuring quality is
focused on inspecting manufacturing process to verify
compliance with good manufacturing practices. That approach is
necessary but has become much harder as manufacturing has moved
offshore, especially when foreign inspections are often pre-
announced. From my own experience, 8 years working as an
engineer and manager in an FDA regulated manufacturing
facility, I can say that consistent compliance is genuinely
difficult.
Day to day variability in materials, equipment,
environments, and human decision-making creates constant risk.
When firms are under pressure to deliver on time and compete on
price, it can be tempting to overlook small compliance issues
rather than investigate them fully. Over time, even well-
intentioned organizations can go down that slippery slope.
Indeed, in my research with co-authors over a decade ago, we
found that pharmaceutical compliance tends to erode over time,
absent a clear observable reason to refocus on quality.
Transparency can help change this dynamic. A
congressionally mandated National Academies Report in 2022
recommended country of origin labeling. In our research testing
that recommendation, we found that both consumers and hospital
pharmacists showed a clear preference for drugs manufactured
domestically or near shore and away from drugs manufactured in
India or China, even when told that all drugs were FDA
approved.
That same report also recommended public facing quality
scores. When we tested quality scores alongside country of
origin, we have found something important. While consumers
preferred domestic drugs on average, high-quality offshore
drugs were preferred over moderate quality domestic ones.
This tells us that transparency can promote competition on
quality, not just location or cost. While the industry remains
opaque, some progress has been made, my co-authors and more
recently ProPublica investigative journalists have been able to
link many drugs to their finished dosage form manufacturing
facilities using mostly public data.
These efforts are valuable, but they are incomplete,
difficult to maintain, and require enormous effort. In the case
of ProPublica, even including a lawsuit of the FDA for some
data. Critically, even with these efforts, we still lack
reliable public data on active pharmaceutical ingredient
manufacturing locations. There is real momentum for broader
transparency.
The FDA has requested the authority to release
manufacturing location information in its upcoming
authorization. HHS has emphasized radical transparency, and the
current FDA Commissioner was a leader in creating transparency
in hospital quality years ago, as described in his book,
Unaccountable. I am part of a Pentagon-funded team developing
drug-level quality scores using existing data, while a parallel
team is conducting laboratory testing of drugs in the market.
These efforts have already identified meaningful variation
in quality, and the resulting scores should be available later
this year. Variation in manufacturing quality has real
consequences for patient outcomes. Research in this area has
been slow, not only because supply chains were long overlooked
as a cause, but also because linking manufacturers to drugs was
previously nearly impossible.
As discussed in your September hearing, and in many recent
news articles, low quality drugs have human consequences. My
specific recommendation is this, require a QR code on all
public facing drug packaging that links to a website searchable
by NDC, showing the manufacturing locations of both the
finished dosage form and the active ingredient, along with the
drug level quality score.
The site should also allow the same information for other
exchangeable versions of the same drug, enabling informed
comparison. For consumer facing use, quality scores should be
designed carefully to avoid discouraging patients from taking
necessary medications. One option would be a five-star scale
where all marketed drugs are at least three stars.
Transparency should be one part of a broader policy
approach. I support stronger foreign inspections, increased
testing, especially of imported drugs, and consideration of a
legally accountable, U.S. based qualified person for imported
batches. Federal purchasing decisions that incorporate quality
and country of origin would send a powerful signal to the
market.
Transparency alone will not solve every problem,
particularly in the complex private market, but is a necessary
foundation. By allowing manufacturers to compete on quality and
location and not just price, we can begin to reverse the race
to the bottom and improve drug quality for patients. Thank you.
Senator Moody. Technical problems]--can speak to drug
quality and shortages. Dr. Michael Ganio is Senior Director of
Pharmacy Practice and Quality with the American Society of
Health System Pharmacists, or ASHP.
ASHP is the largest association of pharmacy professionals
in the United States, representing its 65,000 members in
hospitals, ambulatory systems, and health system community
pharmacies. ASHP also maintains a drug shortages list and has
worked with Congress and a variety of stakeholders on supply
chain resiliency. Thank you for being here, and you can begin
your testimony.
STATEMENT OF MICHAEL GANIO, PHARM.D.,
SENIOR DIRECTOR, PHARMACY PRACTICE AND
QUALITY, ASHP, BETHESDA, MARYLAND
Dr. Ganio. Thank you, Senator Moody, Chair Scott, Ranking
Member Gillibrand, Senator Johnson, and members of the Special
Committee on Aging. Thank you for the invitation to today's
hearing.
ASHP appreciates the Special Committee on Aging's
comprehensive work over the past several months on creating a
more resilient and reliable drug supply chain. For over 20
years, ASHP has worked to strengthen the drug supply change by
publicly reporting drug shortages, providing resources to
support patients and clinicians who are affected by supply
disruptions, and advocating for policies that support a more
reliable and resilient drug supply chain.
Every American has a right to know where their prescription
drugs are manufactured. Today, that information can be
voluntarily provided by manufacturers, but it is not required.
Drug labels may include a name and address for a company
marketing a product, but not the name and the address of a
manufacturing location. ASHP strongly supports transparency in
the pharmaceutical supply chain, including manufacturer and
country of origin labeling for prescription drugs.
Research that Dr. Gray and I participated in, that he
alluded to, and with other colleagues, has shown that patients
and pharmacy purchasers prefer to buy drugs manufactured in the
U.S. or Canada compared to products from India or China when
the country of origin is made available.
Disclosure of this information on the label has the
potential to realign incentives in the supply chain away from
price and may increase market share for products manufactured
domestically.
Research also conducted by Dr. Gray and other colleagues
reveal there may be a correlation between drug quality and
country of origin. These studies provide motivation to increase
domestic manufacturing and manufacturing in countries with high
reliability and FDA accessibility.
However, country of origin alone is not a reliable proxy
for drug product quality. There are many examples of
manufacturers, both domestic and foreign, that have faced
quality challenges in recent years. Our research also ignores
key factors that affect purchasing decisions in practice. For
example, patients will receive a product in an amber bottle
that may not have the country of origin on the label.
Choice is often an illusion. Patients who have received
medications in hospitals and clinics and surgery centers are
often--the drugs are often prepared and administered without a
patient ever seeing the label. I do want to reiterate ASHP's
support for this legislation.
This is basic information that every American has a right
to know. I urge the Committee to consider additional policies
to directly incentivize domestic manufacturing, improve
regulatory oversight or inspections of manufacturing facilities
to ensure Americans have access to high quality
pharmaceuticals.
Chronic drug shortages, concern over drug product quality,
and threats to national security are all related to the
resilience and reliability of our pharmaceutical supply chain.
Policies to address each of these risks and vulnerabilities can
actually solve multiple root causes and result in a resilient
supply chain of high quality pharmaceuticals that can withstand
demand and supply shocks.
There are two separate drug supply chains in the United
States, brand name, single source products and older generic
multi-source products. Financial incentives and challenges
separate these two supply chains. Brand name manufacturers have
a strong market incentive to invest in the resiliency of their
supply chains and produce high quality drugs.
However, price erosion and race to the bottom market
dynamics result in a brittle supply chain for older generic
drugs. For context, nearly every drug on the FDA's 2020 list of
essential medicines is generic. With slim to negative profit
margins, generic manufacturers are less likely to invest in
resiliency and quality management.
Generic manufacturers that are capable and willing to make
those investments often lose market share due to drug price
competition from manufacturers that unwilling or unable to
invest in resiliency and quality management. The narrow profit
margins also result in the offshoring of our drug supply chain,
API manufacturing to countries with cheaper labor and less
rigorous regulatory oversight.
Without a public mechanism to evaluate quality and
resiliency investments, purchasers have no information other
than price to leverage when buying drugs. This reinforces the
race to the bottom market dynamics and erodes market
resiliency, resulting in a fragile supply chain, concerns about
product quality, and chronic drug shortages.
To strengthen the drug supply chain, ASHP also recommends
additional policies that are available in the written testimony
submitted to the Committee. These policies are focused on
improving transparency into manufacturing quality, encouraging
new manufacturers and new manufacturing sites, supporting
economic stability by encouraging long-term guaranteed volume
purchasing contracts, and diversifying the manufacturing base.
ASHP greatly appreciates the Senate Special Committee on
Aging's leadership in working to ensure America's seniors have
access to safe and effective drugs. Thank you, and I look
forward to today's discussion.
Senator Moody. Thank you. Now, I would like to introduce
Dr. Stephen Schondelmeyer. Dr. Schondelmeyer is a Professor of
Pharmaceutical Economics and Management at the University of
Minnesota, as well as the Director of the PRIME Institute,
which conducts research on policies related to pharmaceuticals.
Through his decades of research experience as a published
researcher on pharmaceutical economics and the pharmaceutical
market, Dr. Schondelmeyer has conducted research for the
Centers for Medicare and Medicaid Services and the Food and
Drug Administration, as well as this Committee. We thank you
for being here today, and we ask that you begin your testimony.
STATEMENT OF STEPHEN W. SCHONDELMEYER,
PHARM.D., PH.D., PROFESSOR OF PHARMACEUTICAL
MANAGEMENT & ECONOMICS, COLLEGE OF
PHARMACY, UNIVERSITY OF
MINNESOTA, MINNEAPOLIS, MINNESOTA
Dr. Schondelmeyer. Thank you, Senator Moody, and Ranking
Member Gillibrand, and members of the Special Committee on
Aging. I am pleased to be here today to talk about truth in
labeling. It is an important topic to our marketplace and to
consumers and to health care.
Historically, we have had drug shortages in the U.S.
market. We understand that. We have characterized them, and we
are beginning to deal with that issue. Those shortages have
occurred for a variety of reasons, including quality issues
with drug products and concerns related to market economics.
However, the advent of COVID-19 made us aware of and
brought to the forefront another issue that causes drug
shortages and lack of product in the market, and that is
geopolitical risk--the behavior of other countries in the world
can affect our access to supply of drugs and even some
countries, in an effort to maintain sufficient supply for their
own populations, prohibited export of drugs from their country
to other countries during the COVID-19 process.
Now we have seen now drug supply used as a weapon or as a
leverage in the marketplace, and that could affect the U.S.
dramatically. We are dangerously dependent on foreign sources
for our drug supply in the U.S., with India and China
dominating the market for active pharmaceutical ingredients and
key starting materials.
The U.S. health care system is quite vulnerable to this
geopolitical risk. If a dominant sourcing country decides to
withhold drugs from our supply chain, we would face a major
health care crisis precipitously. That brings us to the issue
of how do we deal with this?
We need to change our drug supply system and our drug
shortage response process from a "find and fix" mentality--that
is, we will wait till it occurs then we will fix it--to a
"predict and prevent" approach. Let's predict where the
shortages are going to be and prevent them from occurring in
the first place, so we don't have people that go without
necessary medications. I think "country of origin labeling" is
an essential, foundational component of that process. It is
standard practice for many consumer goods.
As Chairman Scott pointed out, there is country of origin
labeling for food and clothing and automobiles and other things
in our consumer goods market. As you know, when an American
goes to the grocery store to buy a T-bone steak, or they go to
the department store to buy a T-shirt, there is a label on the
product that tells them where the product was really was made,
where it was sourced.
Consumers do read and respond to that information and use
it. I find it unconscionable though that we require
transparency for our dinner and for our denims, but not for the
critical drugs that save people's lives, cancer drugs, diabetes
drugs, and a variety of other medications.
Real country of origin labeling for pharmaceuticals must be
clear, specific, and transparent. We should know where the drug
product was actually made, not just where it was packaged, or
warehoused, or marketed. Clear labeling must disclose two
things, where the finished dosage product was made, and where
the active pharmaceutical ingredient was made.
Currently, finding information about where a drug was made,
by the pharmacist who has to provide that information to the
consumer, is very difficult, if not impossible. To find this
information, a pharmacist can go to sources like the National
Library of Medicine's DailyMed website, and if they dig around
enough they can find, for some products, the country of origin.
You can't find it for all products. It is not always there.
It may take up to 30 minutes to find the answer for one
drug, and pharmacists can't operate a pharmacy efficiently if
they have to spend 30 minutes for each prescription chasing
down what is the country of origin.
Furthermore, manufacturers hide behind claims of
confidentiality. FDA allows a drug company the option to
declare that the information of where their product is made is
confidential and a trade secret and I understand trade secrets
are important, but a couple of things come to mind that suggest
that this may not be as much of a trade secrets as we think.
For example, the major blockbuster drugs today, like
Mounjaro and Zepbound for weight loss and diabetes, are
products that are labeled--if you look on the box or the
package, it says "marketed by Eli Lilly," and that is good. It
tells us who marketed it. It doesn't tell us who made it or
where it was made.
Lilly may well make these products, from other data bases I
was able to find that Lilly really does make their products,
For the Lilly case, and for many other drugs, the product
labeling says who the product is "marketed by" but it does not
tell you where it was made. However, if you go to Google, you
can find press releases from the company announcing their
investment in a new production facility, and they tell you
where the product was actually made.
What the company told FDA was confidential, they turn
around and issue public press releases to say, look at what we
are doing and I applaud Lilly for building a new plant in the
U.S., but the point is it can't be confidential when you are
giving it to FDA, and not confidential when the drug company
puts out press releases on same product and the same plant
where it is made.
There is a little bit of duplicity in their approach to
what confidentiality really is. There has been a recent change
in the regulation of consumer product labeling. In June 2024,
the U.S. Customs and Border Protection issued a new regulation,
and they shifted their position.
They said the consumer is really the patient at the
pharmacy counter, not the pharmacy when it buys the product.
They used to interpret that manufacturers had to represent to
the pharmacy where the drug was made, and the pharmacy was
viewed as the end consumer. I am a pharmacist. We work in the
marketplace, and we know that the pharmacist is the last point
at which the product gets to the patient.
The pharmacist is the face of the drug product to the
patient. I do think there is a proven transparency process, and
that is in the country of New Zealand. New Zealand has a
process, a public transparent online website that publishes the
API source and the address where it was made in the factory,
the finished dose form, and many other things.
I encourage you to look. I have given references in my
written testimony about where to find that and look at that and
see what is there and New Zealand's experience has been that
transparency has not harmed the commercial interest of
companies. Three things I recommend to Congress.
One, mandate country of origin transparency. We need to
amend Federal statutes to require country of origins labeling
for manufacturers at both the API and the finished dosage form
level. Don't allow companies to hide behind that
confidentiality claim.
Senator Moody. Sir, if you could wrap up your testimony----
Dr. Schondelmeyer. I am----
Senator Moody [continuing]. in just 30 seconds, that would
be great.
Dr. Schondelmeyer. Yes.
Senator Moody. Thank you.
Dr. Schondelmeyer. Labeling for consumers is not an end
unto itself. It is a foundational building block of a broader
data base that helps the Government, and the country
strategically plan for a secure drug supply and manage it.
Labeling for the consumer is important, but building that
broader supply is important.
In other words, we need to build a market wide supply map,
and I encourage you to look at the United States Pharmacopeia's
Medicine Supply Map which does that and Congress needs to
engage with, and fund building this and bring it within the
work of the Government.
Finally, empowering consumers. The consumer is the ultimate
purchaser, and we need to make sure that this law is
implemented and enforced, not just passed.
Senator Moody. Thank you, sir. Thank you so much and I am
sure that the questions will elicit a lot more of what you have
to say today. We appreciate you. I am going to turn it over to
Ranking Member Gillibrand now to introduce her witness.
Senator Gillibrand. Thank you, Chairwoman Moody. I want to
introduce Stephen Colvill.
Mr. Colvill is an Assistant Research Director at the Duke-
Margolis Institute for Health Policy where he leads the Duke-
Margolis Revamp Drug Supply Chain Consortium and policy work on
other supply chain and biomedical innovation topics.
Previously, Mr. Colvill served in the White House Domestic
Policy Council as Senior Policy Advisor for Medical Supply
Chains. You may begin.
STATEMENT OF STEPHEN COLVILL, ASSISTANT
RESEARCH DIRECTOR, DUKE-MARGOLIS INSTITUTE
FOR HEALTH POLICY, WASHINGTON, D.C.
Mr. Colvill. Thank you, Ranking Member Gillibrand, Senator
Moody, and Chairman Scott, and members of the Committee for
holding this hearing. I am Stephen Colvill, and as Ranking
member mentioned, I lead the Revamp Drug Supply Chain
Consortium at the Duke-Margolis Institute for Health Policy.
I have seen the drug supply chain from many different
angles. I have worked at one of the largest drug manufacturing
plants in the U.S., and then on the commercial business side of
that drug manufacturer.
I co-founded a drug supply chain certification
organization, where I worked with health systems to help them
identify reliable suppliers.
Then moved to the policy side where I have served in the
White House Domestic Policy Council, and then my current role
and throughout all this, one common thread has been obvious, we
need to revamp how our supply chain works to better care for
patients.
Before discussing solutions, we need to identify the
distinct yet overlapping problems in the drug supply chain.
First, chronic drug shortages. These occur when a drug is
simply not available, usually because of a supply chain
breakdown like a manufacturing delay. Second, questions around
pharmaceutical quality assurance.
This is when a drug is available, but there are questions
around if it was manufactured and tested appropriately. Then
third, addressing geopolitical and national health security
risks from foreign dependency and fourth, a desire to grow the
economy through domestic manufacturing.
As a Nation, we obviously need to address all of these. At
the Revamp Consortium, we focus on policy solutions to the
chronic drug shortages that have been causing devastating
impacts to patient care for 20 plus years. We focus where
shortages have been most prevalent, inexpensive generic sterile
injectables, which are usually administered by healthcare
providers such as in a hospital setting.
Generic drug prices are on average about 33 percent lower
in the U.S. than in other high income countries. Generics are
cheap here, yet too frequently not available because the
current provider payment system set by CMS and private insurers
encourages providers to seek low cost generic drugs without
enough consideration for reliable availability.
Providers are not adequately rewarded when they take steps
to prevent shortages. However, there is an alternative,
aligning incentives to focus more on reliable availability for
critical generics. I coauthored a proposal in October on how to
make this happen.
Our proposal offers up a simplified version of a Medicare
incentive payment program originally outlined in the 2024
Senate Finance Committee discussion draft. The proposal would
incentivize health care providers to do two things. One,
purchase through committed contracting models.
Second, identify and purchase drugs that meet reliability
or resiliency benchmarks. Addressing chronic drug shortages in
this way is clearly aligned with CMS's mission to improve
health outcomes.
CMS is also well positioned to move the needle,
particularly in the inpatient setting where Medicare and
Medicaid together account for about 75 percent of inpatient
days. Since 2023, CMS has taken several actions to incentivize
domestic production, including a notice earlier this week--just
this week about a potential upcoming hospital incentive
program.
CMS actions should also encourage the reliable availability
of critical generics by supporting committed contracts and
reliability benchmarks. I encourage this Committee to
collaborate with the Finance Committee on that. In the
meantime, it is great that this Committee is considering
legislation to make better information available about
suppliers. My top priority here would be to kickstart
reliability benchmarking pilots.
Three prominent examples of such programs include the
Healthcare Industry Resilience Collaborative's Resiliency
Badging Program, U.S. Pharmacopeia's Resiliency Benchmarking
Program, and FDA's Quality Management Maturity Program. These
voluntary programs evaluate confidential data about various
manufacturer supply chains.
They then can communicate findings to the market about the
reliability of those manufacturers. Uptakes of approaches like
these has been relatively limited but could be significantly
increased through HHS and DOD funding and support.
This could also set a foundation for future CMS reform.
Regarding pharmaceutical labeling, Americans deserve to know
where their drugs come from, and effective labeling changes
could, over time, possibly drive some more demand to domestic
manufacturers. However, labeling reforms alone are likely to
have a limited impact.
Many decisionmaker already know where API and finished
dosage forms are made, and patients have limited influence over
what drugs are stocked. Also, just because a drug is made in
the U.S. doesn't necessarily mean it is always the best choice.
Some of the most significant shortages have resulted from
manufacturing issues in U.S. plants.
Other assessments are also needed, such as from reliability
benchmarking programs, like I mentioned. My written testimony
provides additional points on how potential unintended
consequences of labeling reforms could be mitigated. Before I
close, two specific considerations on labeling.
Place of business may not be the best term to use in
labeling requirements, as place of business is not necessarily
the same as the location of manufacturing.
It may be more beneficial as FDA requested in their
legislative proposals under the prior Administration, and again
in the current Administration, to require manufacturers to
include in their digital labeling information unique facility
identifier numbers for the original API manufacturer and
original finished drug product manufacturer.
Finally, to summarize, one, we need to clearly define the
problems. Two, I would focus first and foremost on CMS payment
reforms to support committed contracting models between
purchasers and manufacturers that meet reliability benchmarks
and third, consider requiring unique facility identifiers to be
included in digital labeling information. Thank you, and I look
forward to the discussion.
Senator Moody. Thank you very much for your testimony and
without any objection, I am going to let Senator Johnson kick
us off with questions.
Senator Johnson. Thanks, Senator Moody. I supplied plastic
packaging materials to the medical device industry for about 30
years and, you know, fully understand good manufacturing
process, GMPs, benchmark of that is traceability.
You know, we need to know, you know, what rail car, what
box of resin produced that roll of sheet stock that went into
packaging that particular medical device, okay and that is just
for packaging material.
Dr. Gray, does the FDA not require that level of
traceability on drugs, I mean, things we actually put in our
bodies versus just a package that surrounds a medical device?
Dr. Gray. My understanding is within the facility, they
have requirements, and GMP requirements like you are talking
about. The manufacturer itself does have to trace lots and
things from its suppliers, but--and Mike can help me with this
one--but when the hospitals receive the drugs----
Senator Johnson. They don't have the information.
Dr. Gray. They don't have the information. The buyers don't
have the information.
Senator Johnson. Does the FDA require that traceability
back to the precursor chemicals--to the API, to the actual
compounding of the drug, to the marketer?
Dr. Gray. My understanding is API, yes. Precursor
chemicals, no, is my understanding. At least--and I am not 100
percent sure on that.
Senator Johnson. Anybody who can answer that question to
me. How critical would be for us to know where the precursor
chemicals come from, or is it okay just to focus on API? Dr.
Schondelmeyer.
Dr. Schondelmeyer. Yes. Certainly, it is important to know
where the KSM came from for purposes of, is it quality, is it a
product that we want to put in human bodies in America, but it
is also important to see how dependent we are on specific
sources of supply and countries of supply so they may be
putting quality product in there, but if we find that 30, 40,
50 percent of our API supply is from China, and China is an
adversary----
Senator Johnson. I got to--so I understand the supply chain
issue, the precursor chemical. What about a quality issue? I
mean, do we need to know what the--you know, where that
precursor chemical came from, or can we do the quality check on
the API before it gets compounded into a drug?
Dr. Schondelmeyer. Well, I would describe it this way. A
lot of that is based on voluntary compliance with the
Continuous Good Manufacturing Practices Act. It is not
required, and FDA doesn't--it is not like a meatpacking plant
where they inspect everybody, you know----
Senator Johnson. Mr. Ganio, you want to answer this again?
Dr. Ganio. Sure.
Senator Johnson. It is not required by the FDA?
Dr. Ganio. The key starting materials, no and to answer
your question about quality, I would be less concerned about
the quality and more of the national security vulnerabilities
associated with it. The API is tested by manufacturers. They
will confirm that what they receive from an API manufacturer is
suitable for production. Anything that is manufactured up to
that point should be okay from a quality perspective, but the
vulnerabilities that need to be revealed are important.
Senator Johnson. We had the 2008 heparin contamination
issue. Have we done anything to address what went wrong there?
Dr. Ganio. Scientifically, United States Pharmacopeia
revised the monograph for that to make sure that oversulfated
chondroitin sulfate would be detected when testing. From a
national security standpoint, that should address if the GMPs
are being followed and record keeping is being followed.
Senator Johnson. If we--you know, Mr. Colvill, you
mentioned that U.S. generic drugs are about 33 percent less
expensive than in other countries, you know, first world nation
countries. Why is that? Is it just greater competition, or are
there rules and regulations in place in those countries that
increase that cost of drug?
Mr. Colvill. It could be a result of incentives in the
market. What are the purchasers incentivized to value? I think
in the U.S., there is an emphasis on low cost, which is
important, of course, but there is not enough emphasis on other
things that are important too--reliable availability, quality,
you know, everything else that goes into the full value
proposition for these products.
Senator Johnson. I mean, in general generic drugs are
pretty cheap, correct? I mean, where we have problems with high
drug prices in the patentable drugs that, you know, until they
go off patent and become generic.
When we are talking about--and I think, you know, what
Senator Scott is proposing, labeling, I think that is an
incredibly important first step. I think all the witnesses are
saying that as well, but you know, there may be rules and
regulations in terms of quality, and testing, and statistical
sampling, and GMPs, and following those things and making those
available as well, that would add a price to that.
Anybody want to opine in terms of, would that increase
prices by 33 percent? Which still, when you look at the total
drug buy in the U.S.--you know, we don't have extremely
expensive health care here because of drugs. It is a component
of it, but it is a small component.
If you want--I personally think most consumers would pay a
little bit more to be assured of quality, so they don't get--so
they won't die from a heparin contamination or something like
that. Anybody want to opine in terms of what the right rules
and regulations and laws to ensure quality, how much that would
increase the price of generic drugs? Would it be the 33
percent? Would it double it? Mr. Ganio, you look like you want
to answer.
Dr. Ganio. I couldn't give you an exact number. That would
vary by manufacturer, but as you mentioned, and as I mentioned
in my testimony, the two supply chains--there is instances
where we probably don't pay enough for generic drugs, and this
is the result, the questionable quality, but all we have to
value when we buy drugs is the price.
Everything is pass, fail, which is clearly not sufficient.
If additional information about quality is made available, then
purchasers would have a reason to spend 10 percent, 15 percent
more. We conducted a survey in 2023 and found our members are
willing to spend about 10 to 15 percent on drugs.
You have to look on the other side that the supply chain
issues, the shortages, what they cost--over almost $900 million
in labor expenses alone, according to a report from Vizien, a
group purchasing organization. Our research also shows
increased costs of drug supply chain concerns.
If you make that tradeoff, pay a little bit more for
guaranteed supply chain high quality drugs, it theoretically
could pay for itself.
Senator Johnson. By the way, I will say that having been a
manufacturer, had to follow GMP, got ISO audits every 6 months,
it costs a little bit more but not that much more. What you end
up being is just a far better manufacturer.
You have higher quality. You have higher level customer
service, greater reliability, less scrap. You know, so I
wouldn't believe any manufacturer or any of these marketers
saying, well, it is going to increase our cost dramatically. It
really shouldn't. It is just good manufacturing practices. That
ought to be insisted on again. I really appreciate what Senator
Scott is doing here with these hearings. Thank you.
The Chairman. Thank you, Senator Johnson. Ranking Member
Gillibrand.
Senator Gillibrand. Thank you, Mr. Chairman. Dr.
Schondelmeyer and Dr. Colvill, we have been talking about, we
talked about terms of art, that we have to get the terms of our
correct. People say marketed for, distributed by, repackaged
by. What is the best term of art for this labeling? I would
like all the witnesses to answer this question, but starting
with you, Dr. Schondelmeyer.
Dr. Schondelmeyer. I think the simplest is "product of" or
"made by" and then it should specify, are they talking about
the finished dosage form or the API? Both should be disclosed.
FDA may well have all of this information and other information
on quality, but they either aren't authorized, or as a matter
of policy don't choose, to release a lot of it.
Just having the information at FDA doesn't necessarily
improve the quality and the ability of decisionmakers to make
decisions, whether it is the consumer, or the prescriber, or
the pharmacist, or the purchaser.
They need to know what FDA knows to make those decisions,
so "made by" or "product of," and "API product of," "finished
dosage form product of" and the country.
Senator Gillibrand. Mr. Colvill.
Mr. Colvill. Dr. Schondelmeyer, you are referring to what
is on the physical label, which is important, obviously. I
think we also should think about the digital information. We
live in a digital world.
What is the information that is provided digitally? You can
have a lot more information that is provided that way. There is
limited real estate on these labels. Some of them are really,
really tiny. As I mentioned in my opening remarks, unique
facility identifier numbers could be considered to be required.
Senator Gillibrand. I think that it would be very smart for
the digital labeling to say exactly where the plant was in
India or where the plan was in China.
Mr. Colvill. If that was done, it would all be listed on
DailyMed, the data base that several others have mentioned.
Third parties could easily put together publicly available,
user-friendly data bases where patients and others could easily
look up where these drugs were made.
Senator Gillibrand. Doctor Ganio.
Dr. Schondelmeyer. I would quickly comment that I agree,
the DailyMed is a great source, but if you look at their data_
they do sometimes have API manufacturer and finished dosage
form manufacturer for some products, and they have an entity
identifier on there for the ones that are named, but it is
pretty complex, and consumers have a difficult time sorting out
what is there.
I included as an appendix to my written testimony printouts
from the New Zealand MedSafe data base that report the same
information, but it is much more easily understandable by a
consumer if they look it up with a QR code or other things.
I encourage you to look at the way it's presented in the
New Zealand MedSafe data base. It is much more consumer and
user friendly, and easier to follow.
Senator Gillibrand. Okay, and Dr. Ganio.
Dr. Ganio. Yes, I completely agree with both--I agree with
both Dr. Schondelmeyer and Mr. Colvill. The physical label
should be easy to understand and easy to read. It should say
manufactured by the name of the facility.
Having the unique facility identifiers in a searchable data
base can help identify vulnerabilities, choke points, things
where we are all relying on the same site, where right now
might be under a contract and not necessarily easily
discernible, but stakeholders could find out where those choke
points are and invest.
Senator Gillibrand. Thank you. Dr. Gray.
Dr. Gray. Finished dosage manufacturing location, active
pharmaceutical ingredient manufacturing location should both be
on the label and then I agree with the searchable data, the
easy to access data base that includes more details on that,
and also as I mentioned in my testimony, quality ratings.
Senator Gillibrand. Thank you. In several of the
testimonies today, there have been mentions of the data that is
collected by the Customs and Border Protection and the Food and
Drug Administration when pharmaceuticals are imported into the
U.S. However, what is required to be listed on the label by CPB
is different than what's required to listed on a label by FDA.
There also been allusions to country of origin disclosures
being voluntary provided rather than mandated by the current
CPB regulations. At times, disclosure regulations required by
CPB seem to be in direct odds with those by the FDA.
For any or all of the witnesses, how should Congress work
to harmonize the information gathered by the FDA and the CBP to
ensure that the information received by them is not
duplicative, but also provides consumers with clear
understanding of a product's country of origin?
Dr. Gray. I will just say quickly, and hopefully this will
sort of answer your question, that FDA has requested
authorization to be able to release a bunch of manufacturing
location, API, active ingredient--API finished dosage form,
excipients, critical excipient, etcetera--allowing them to do
that. The FDA feels bounded to not be able do that by company
confidential information. That would align them, I think.
Dr. Schondelmeyer. I think as policymakers, you need to
look across both the CPB and FDA, and what their regulations
are, and integrate them. This--CBP is limited only to imports.
They don't even require listing on the label "made in the USA"
when it is made in the USA because that is not an import.
Senator Gillibrand. I see.
Dr. Schondelmeyer. That needs to be cleaned up. I think do
it under one set of regulations, probably placed at FDA rather
than CBP because of that and then make it really clear what the
language is, you know, what goes--as important as the made or
manufactured is the preposition that follows it. Made "by" is
different than made "for."
Senator Gillibrand. Yes. Understood.
Dr. Schondelmeyer. Very different and so, clear that up and
put clear definitions for it and then also, don't allow
companies to declare that where it is actually made as
confidential or trade secret.
Senator Gillibrand. Correct.
Dr. Schondelmeyer. Declare that is public information that
needs to be disclosed.
Senator Gillibrand. Understood. Thank you. Thank you, Mr.
Chairman.
The Chairman. Senator Moody.
Senator Moody. Thank you, Chairman Scott and Ranking Member
Gillibrand for convening this hearing to examine what sounds
like a very urgent need for transparency in our drug supply
chain. Every day, millions of Americans rely on a wide range of
medications to maintain their health and quality of life.
As parents, we often take prescriptions to the pharmacy and
get medications that we then tell our children to take,
trusting that there are no quality control issues. I think this
should be top of mind for every American and certainly every
parent.
Unfortunately, throughout the hearings that we have had on
this issue and this Committee on drug supply transparency, it
has become increasingly clear there's simply not enough
transparency and what is worse, FDA import alerts routinely
cite carcinogenic impurities, falsified batch records, and non-
sterile conditions from manufacturers in China and India.
Roughly one-third of all FDA import alerts target Chinese
facilities, and another 16 percent target Indian producers.
Just last year, I and many of my colleagues on this Committee
sent a letter to the FDA raising the alarm at problems with
drug quality due to poor foreign inspections in countries like
China and in India who together account for 60 percent of APIs
globally.
That doesn't even include, as we have discussed already,
the key starting materials. Many Americans who rely on
prescription medications, particularly seniors, which is why
this Committee is paying such close attention, have no
reasonable way to determine where their medications are
manufactured, effectively denying them an opportunity to choose
American made drugs.
What we found is that this failure stems from a combination
of loopholes and insufficient FDA enforcement, which allows
foreign adversaries such as China to exert control over the
production of drugs that Americans depend on to stay alive.
It is crucial, and what I am hearing from every witness
today, that we take immediate action to increase transparency
in our drug supply chain so that consumers can make informed
decisions about the medications they use. Important, a study
from 2022 found that 83 percent of top 100 generic drugs
consumed by U.S. citizens have no U.S. based source of active
pharmaceutical ingredients.
With that said, I would like to turn to one of the
witnesses that I had to cut short when we were getting to time
limits on introductions. Mr. Schondelmeyer, in your testimony,
you wanted to further explain, I believe, about how in New
Zealand they have a model for providing drug supply chain
transparency.
That the New Zealand MedSafe program maintains updated
information regarding active ingredients which is available to
the public. What aspects of that model would you say are most
crucial to be included if the United States were to ever enact
transparency measures on our drug supply chain?
Dr. Schondelmeyer. The New Zealand system collects all of
the information we have talked about, where are the key
starting materials from, what are the inactive ingredients,
where is the active ingredient made, and the factory name and
address, the finished dosage form, manufacturer name and
address, who packages the product, and who labels it.
Every step along the way is transparent and for every
prescription drug on the market in New Zealand, it is put in a
data base and any consumer in New Zealand, or the rest of the
world, can look up those products at the product-specific level
and identify where did it come from. We should have nothing
less in America.
In fact, these days the pharmaceutical supply system is
really a global supply system. We talk about the U.S. drug
supply, but if we take that, the same sources are probably 70
or 80 percent of the worlds global supply.
It really is the same system. We need a system equivalent
to New Zealand. I applaud FDA and the DailyMed website that is
maintained, but it is not nearly as consumer friendly as New
Zealand's system is and we need to look at, and emulate their
process, and then make transparent the information that FDA
does have.
Senator Moody. Do you believe that the New Zealand model
for transparency, the things that they have enacted, do you
believe that has decreased the amount of contaminated drugs
that are consumed by the public there?
Dr. Schondelmeyer. I believe it has and I haven't seen
studies from New Zealand about the number and types of
shortages, but I think if they were at the same level as we see
in the U.S., we would probably have seen studies of that type.
I wouldn't draw a conclusion from it yet, but I don't think
they have as severe a drug shortage problem as we do in the
U.S. for a variety of reasons and I have talked with the
officials at MedSafe in New Zealand, and they say they aren't
aware of any commercial problems in the marketplace from making
that information public.
Senator Moody. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Moody. I guess to start,
maybe each of you, when we go to the pharmacy and we have a
choice between a generic drug and a brand name drug, are they
exactly--we are taking the exact same drug? If each of could
respond.
Dr. Gray. Yes. Generics typically do not follow the same
production process. The excipients can be different, and there
is a range of bioavailability that is allowed even upon
approval. Generics do go through an approval process that is
somewhat rigorous and includes in-vitro testing on a small
number of individuals, but it is a lot less than the original
drug and that is at approval.
Then I think what I have researched most and thought about
is after approval, when the manufacturing facility has been
operating for years under light regulation, how things go, you
know, how consistent is compliance, but no, it is not the same
excipients necessarily. It is not same process and there is--
again, there is a range of availability.
Dr. Ganio. I would agree that they are not the same.
However, they should behave the same in the body. When I talk
to my family, I myself, I have no problem taking a generic. I
will tell you that if the label shows where it is made, I will
opt for domestically manufactured, or "French," or "friend-
shored" manufacturing because I am not sure the quality of
where the product is made.
However, I don't think there's any issue with generic
equivalency. There are, as Dr. Gray mentioned, a battery of
tests that are done to make sure that it behaves in the body
the exact same way as the brand name product does.
Dr. Schondelmeyer. Embedded in your question is, are they
the same drug? What do we mean by drug? On the one hand, a drug
can be the molecule, the active ingredient that causes the
positive effects in the body that we are after in the
healthcare system.
We also use the word drug to mean the drug product. That is
the active ingredients, plus all of the extra things we added
in to make the tablet hold together and to preserve it. The
excipients, as Dr. Gray described, so there may be differences
in the excipients and other things.
Think about it when you are baking cookies. You know, each
cook has their own recipe, their secret ingredient in making
their cookies and they may be a little bit different. They may
all taste similar. They may be all chocolate chip cookies, but
there are slight differences across them.
They all have the same ingredients, they have chocolate
chips in them, and they are chocolate chip cookies. The
molecule, I think, is essentially the same in almost all cases.
The other things you add into it may differ, and some of those
may have an effect positively or negatively on the health of a
patient.
Our current process of inspecting and evaluating
equivalency of products doesn't take into account all of those
other things perhaps as well as it should.
Mr. Colvill. Thank you for the question, Chairman. For
myself, I don't have any problem taking generics. These two are
pharmacists, so I, you know, would--I am very interested in,
you know--glad that they shared their perspective.
I think the most stark difference between a branded drug
and a generic drug isn't the chemical properties themselves of
the drug, but it is the supply chain, the robustness of the
supply chain. A branded drug has every incentive to have
redundancy, extra manufacturing capacity, backup plans, buffer
stock. They take all these steps to make sure they avoid
shortages.
Whereas generic supply chains are very lean. If there is a
disruption in the supply chain, frequently that leads to
patient issues, and, you know, issues with patient care being
impacted. I think that is the most stark difference.
The Chairman. Dr. Gray, would you take--you don't care if
it is a generic or branded drug?
Dr. Gray. At the moment, I don't take any drugs, but I
would generally take a generic drug if prescribed but would try
to investigate where it is from, but again, some of my family
do, and ProPublica's Rx Inspector, which came out just a month
ago, allows you to find out where the finished dosage form of
your drug is made easily, unlike the DailyMed approach.
I would certainly investigate. I do pay more for brand
over-the-counter drugs. I wouldn't take a generic eye drop. It
kind of depends on what it is, right. If it is going directly
into the bloodstream, or the eyes, or a tablet.
The Chairman. Good. Dr. Ganio, so, do pharmacists know
where the active ingredients of the drugs are made? If so, do
they tell their customers?
Dr. Ganio. No, in general, the pharmacist would not know
where the active pharmaceutical ingredient is from. It is
possible to research and find that and there is nothing on a
prescription label that would tell the patient. I have never
been asked as a pharmacist where the API was from by anyone
that I have dispensed the medication to.
Dr. Gray. Can I just say, I have asked my pharmacist, and
they look at me like I have two heads, so.
The Chairman. Oh, no, I ask them every time.
Dr. Gray. Yes.
The Chairman. I have done enough ads. They all know who I
am, so and I have told them about our hearings. They now expect
it. They actually have more information now than before. Mr.
Colvill, why is supply chain mapping important to country of
origin labeling?
Mr. Colvill. Well, a few different reasons. Supply chain
mapping would be important because you want to identify if
there is redundancy in the supply chain or if there is
concentration. If there is concentration, that can cause
issues. For example, you know, from a natural disaster or any
sort of disruption.
Being able to identify where there is diversification
versus concentration, and also just identifying
vulnerabilities. There is different problems, like I mentioned
earlier, different problems that we need to assess.
If you are thinking about national security issues or
geopolitical risks, then obviously mapping the supply chain to
determine where drugs that are heavily reliant on more
adversarial countries are coming from is important.
The Chairman. Dr. Schondelmeyer, what county of origin
labeling--would country of origin labeling encourage investment
in U.S. pharmaceutical manufacturing?
Dr. Schondelmeyer. Would it encourage what?
The Chairman. U.S. manufacturing.
Dr. Schondelmeyer. I think it will provide some
encouragement for U.S. and for nearshoring manufacturing in
Canada, perhaps Mexico, or our neighbors in Latin America may
be encouraged.
Issues that come to play--one reason why China and India
have become dominant is because they had lower environmental
regulations, lower labor laws, and lower pay, and many other
restrictions are eliminated in those countries and the
companies take advantage of that and make it--and they also
have an economy of scale larger than the U.S. or the Western
Hemisphere.
I think we can overcome those though and with advanced
manufacturing that is being developed in the U.S., they can
make products leaner and greener and I think, we could get to a
point where we could compete in the U.S. and in our nearshore
neighbors and recall, Puerto Rico used to be a hotbed of
production. It has declined over time, but I think that could
be reinvigorated along with other neighboring countries.
The Chairman. Ranking Member Gillibrand, do you have any
other questions?
Senator Gillibrand. Just a couple more. Dr. Ganio, I want
to explore a little bit more about your testimony about supply
chain. You specifically mentioned fragile supply chains and the
need for buffer inventory to insulate the United States from
potential drug shortages in times of geopolitical conflict. Can
you discuss some of the national security risks in more detail?
Dr. Ganio. Yes, I think we have covered some of it today
but thank you for the question. I keep forgetting to unmute my
microphone. Thank you for that question. We know, based on data
out of the United States Pharmacopeia, that we have an
overreliance on China for key starting materials, API sources
in China and in India also.
In the event of escalating trade conflict, in the event an
armed conflict, if China decides to make a move on the
Taiwanese territory, for example, and that things escalate, we
are extremely vulnerable to sources in China and they could
hold those supplies from the United States, which would cut us
off from essential medicines.
Knowing exactly where those vulnerabilities are--the data
and transparency only gives you enough to act, and we can't
take action until we have that data. We think--we believe
strongly that the transparency--to help the United States
understand how much we rely on those sources and how to find
alternative sources is critical to our national health care
security.
Senator Gillibrand. We have had a hearing on this topic
before, but we talked a lot about FDA's ability to inspect
foreign domestic manufacturing process very significantly,
creating concerns about oversight and quality of imported
drugs. Can you talk a little bit about that? That is same
question for all the witnesses.
Dr. Ganio. Yes. Thank you for the hearing in September. I
cannot say that that hearing did not keep me up at night after
hearing testimony about some of the inspections, but this is
where I think it is important. Domestic manufacturing is great.
FDA has the ability to walk in unannounced, but I also
think in other countries that are considered allies, we should
be investing in a diverse supply chain, both in the U.S., in
other countries where--we have vulnerabilities, we have
hurricanes here, we have other disruptions that can happen.
More diversity geographically creates a more robust supply
chain, so by incentivizing it in countries where the FDA has
that ability to walk in unannounced, I think is important.
Senator Gillibrand. Yes. Because it was interesting when
asked by the Chairman, would you guys take generics? You all
said, well, if I could figure out where it is from, I would
maybe consider that.
Obviously, for you as the most knowledgeable stakeholders,
where things are manufactured is highly relevant to you and it
is highly relevant to me because we don't have the same
inspections. Just to close out the testimony, if each of the
other witnesses could just add whatever you think is relevant
to add on these topics. Go ahead, Dr. Gray.
Dr. Gray. On the inspections, I would like to also add that
one big difference is the legal ramifications for the
individuals, the managers, the quality manager, the plant
manager of sending adulterated drugs in the U.S., you can go to
jail. If you are overseas, you can't, right. We can't
prosecute.
I think that is another incentive. I think the--you know,
you heard a lot from Peter Baker on the unannounced inspection
pilot, and that shows the need to do unannounced inspections
globally. I think--I have a research paper now exploring the
current pilot.
I think you are aware that the Congress mandated an
unannounced inspection pilot in India that began in late 2022,
and we are finding three to four times more likely to issue a
warning letter of the unannounced inspections relative to the
pre-announced inspection, meaning things weren't being found.
Some of the worst--the worst things you have read about the
last few years were plants that had had clean inspections years
prior to the unannounced inspection pilot. I was thinking about
that. I will stop there.
Senator Gillibrand. Dr. Schondelmeyer.
Dr. Schondelmeyer. Yes. A couple of points I would make.
First of all, India is our major supplier of generic
pharmaceuticals and in India, certainly, there are good quality
products that come out of India. Not all of them, but some of
them. One of the issues is India does not participate in the
International Council on Harmonization of Regulation, FDA type
regulations.
Most all of our other suppliers, including China,
collaborate in that. We should begin to pressure and encourage
India to participate in the ICH. Second, within India, they
regulate manufacturing of drugs, not at the national level, but
at the equivalent of the state level, and they have like 40
states.
Even within India, they know that some states have pretty
poor quality production and others have better quality. They
differentiate internally in the country, yet we don't as a
country when we buy from India. We need to encourage India to
step up within their system, the quality, and make it more
consistent and uniform.
Senator Gillibrand. Thank you.
Mr. Colvill. Thank you, Senator. Two thoughts from me. The
first is, you mentioned location of production and that is an
important thing to consider. I think the best thing to address
that issue is leveling the playing field, and one of the best
things that can be done to do that is ensure FDA has the
resources to do foreign inspections at the level that is
needed.
Then second point is location of production is only one
thing that should be considered. You also need to consider
reliable supply chains and quality and so, you can do that
through reliability benchmarking programs.
I mentioned a few examples of programs that are early on in
doing that and then also you could do independent quality
testing to ensure a high level of quality assurance.
Senator Gillibrand. Thank you. Thank you, Mr. Chairman.
The Chairman. Well, I want to thank each of you for being
here. It has been enlightening. Today's hearing made one thing
unmistakably clear, Americans are being asked to trust a system
that refuses to tell them the truth. We label our food, we
label our clothes.
When it comes to lifesaving medicine, patients are kept in
the dark about where they are made. I mean, that doesn't make
any sense. This isn't about banning drugs or raising prices.
This could actually lower prices for American families, while
delivering needed transparency and support American jobs.
Manufacturing location matters. Oversight isn't equals. Secrecy
doesn't protect patients. It protects the status quo and bad
actors.
Americans deserve to know what they are putting in their
bodies and whether their medicine is truly made in America.
Honesty and transparency strengthens markets, accountability,
and national security.
My staff will be reaching out to share the bill text with
everybody's office in the coming days. I just want to thank
Ranking Member Gillibrand. Her team has been great to work
with, and this has been a great bipartisan effort to try to
come up with a solution that is going to be workable.
If any Senators have additional questions for the witnesses
or statements to be added, the hearing record will be open
until next Wednesday at 5:00 p.m. Thanks everybody.
[Whereupon, at 10:35 a.m., the hearing was adjourned.]
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APPENDIX
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Prepared Witness Statements
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Questions for the Record
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U.S. Senate Special Committee on Aging
"Truth in Labeling: Americans Deserve to Know Where Their Drugs Come
From"
January 29, 2026
Questions for the Record
Dr. Michael Ganio
There were two questions during the hearing that I'd like
to expand on.
The first was Chairman Scott's question about brand and
generic being exactly the same. I would like to affirm my
response during the hearing, but add that the question we
should be considering is whether generic drugs, as originally
approved by the FDA, are exactly the same as manufactured
decades later. The generics approved under an abbreviated new
drug application (ANDA) must match the characteristics of the
brand-name product approved under the new drug application
(NDA), even if the inactive ingredients are different. What we
have seen through recent research and from FDA inspections is
that not all generics are manufactured to the same high quality
standards, especially older generic drugs.
The second was Senator Johnson's question about the 2008
heparin issue. Again, my response to the question is accurate-
that specific issue has been resolved. However, I would like to
add that the circumstances that led to that issue still exist
today. If a manufacturer knowingly included an impurity or a
false active ingredient in a pharmaceutical, it may not be
detected immediately. Only regular testing of pharmaceuticals
could catch or prevent that. To be 100% transparent, I'm not
sure that a regular testing program would have caught the
heparin contamination in 2008 -- the heparin test at the time
was not designed to detect the oversulfated chondroitin sulfate
contaminant. Regardless, the U.S. relies extensively on the
manufacturer's own testing programs. Falsified results or
knowingly contaminated products very likely would reach
patients before detected.
Senator Jon Husted
Question:
How do large purchasers of medicines such as hospitals, and
health systems currently assess supply-chain risk when
selecting drugs?
Response:
Large purchasers base buying decisions almost exclusively
on price. Purchasing contracts can also influence decisions,
but buying is still based solely on financial evaluation and
not differences in the drug product. Occasionally, specific
buyers may avoid a product due to past experiences, for
example, problems with vial stoppers when inserting a needle.
In most cases, generic drugs are all assumed to be the
same. All are evaluated and approved through the FDA's
abbreviated new drug application process. Because this is a
pass-or-fail method of approval, there is no reason to expect
differences between generic products. However, based on
outcomes research and on FDA inspection reports, there are
clearly differences in the quality of manufacturing.
Question:
Beyond transparent information on a medicine's country of
origin, what other information would be meaningful to large
purchasers as it relates to how a purchaser evaluates the
resiliency of a manufacturer's supply chain?
Response:
Currently, the only information readily available to
purchasers is the price. In the current environment,
manufacturers compete on a pass/fail system with the FDA, so
all products available on the market are assumed to be equal.
That puts an overemphasis on price and will shift purchasers
away from manufacturers able to invest in quality and
resiliency and toward higher risk manufacturers.
If purchasers had more information about a manufacturer's
quality management and investments in resiliency, it could
realign incentives toward reliability and away from buying the
cheapest product.
Question:
Given the recent shortage of cancer drugs such as
carboplatin and cisplatin, why did the market for these drugs
end with such little redundancy despite the importance of these
drugs for cancer patients?
Response:
With most generic drugs that have been around for decades,
the manufacturer with the cheapest price is likely to win most
of the market share. In the case of cisplatin, a single
manufacturer had 50% of the market. Unfortunately, an FDA
inspection revealed that manufacturer was cutting corners,
leading to a halt in production and shortage of an essential
cancer treatment.
It's difficult for high-reliability manufacturers to
compete with companies that cut corners or are subsidized by
foreign governments. If they are continually undercut on price,
they will eventually stop making a product, leading to less
resiliency in the marketplace for that drug. This happens
regularly with generic drugs that have been around for decades.
Question:
How does the low reimbursement for these drugs shape the
supply chain fragility?
Response:
Hospitals and providers are not separately paid for older
generic drugs by Medicare or Medicaid. When a hospital or
provider submits a claim for older generic drugs, like decades-
old chemotherapy drugs, the drugs are reimbursed as part of a
bundled payment that is assumed to account for the cost of
care.
This type of reimbursement overemphasizes low price when
determining which products to buy for patients. Buying the
cheapest product generally results in a more favorable margin-a
margin that is often negative, but less negative than buying
and billing a more expensive version of that same generic
product.
Question:
What vulnerabilities exposed by these shortages still exist
today?
Response:
Several vulnerabilities - concentrated market share
anywhere can be a vulnerability, both geographically (see
Hurricanes Maria and Helene) or with quality-related
disruptions (cisplatin).
Concentrated market share in a country that can be
challenging for FDA inspections is another vulnerability.
The underlying market dynamics (described in previous
answers) also still exist today and will continually reinforce
purchasers buying the cheapest product.
Additional vulnerabilities that may or may not exist
related to the upstream supply chain (i.e. active
pharmaceutical ingredients or key starting materials) for
cisplatin and other essential drugs. Not knowing how much the
supply chain relies on sources of API and key inputs that are
in countries at risk of trade wars or geopolitical tensions is
an unknown vulnerability.
Question:
According to recent reporting, the number of ongoing
prescription drug shortages rose slightly in the last quarter
of 2025, but remained significantly lower than the all-time
high reached in the beginning of 2024. Moreover, the number of
new shortages identified last year was just 89, the lowest
figure since 2006, and considerably less than 130 medicines
that were in shortly supply in 2024, according to a new report
from the American Society of Health-System Pharmacists (ASHP).
And notably, long-standing shortages are beginning to resolve;
75% of all the active shortages started in 2022 or later.
Could new mandates on companies with respect to either the
label or labeling contribute to new drug shortages? Could any
new requirements and their associated penalties for non-
compliance create a situation in which certain manufacturers
prematurely leave the U.S. market and, as such, create new drug
shortages?
Response:
I don't foresee this being a significant contributor to
future drug shortages. New mandates on label or labeling
requirements should have realistic timelines for compliance.
Otherwise, this should not result in manufacturers leaving the
U.S. market.
U.S. Senate Special Committee on Aging
"Truth in Labeling: Americans Deserve to Know Where Their Drugs Come
From"
January 29, 2026
Questions for the Record
Dr. Stephen Schondelmeyer
Senator Raphael Warnock
Question:
Dr. Schondelmeyer, you emphasized the role of advanced data
analytics in identifying vulnerabilities before crises and
mitigating pharmaceutical drug shortages.
How can Congress improve the employment of predictive
analytics across federal agencies to forecast drug shortages
for scenarios such as natural disasters or international trade
disruptions?
Response:
The Current Landscape and Supply Chain Vulnerabilities
The resilience of the United States prescription drug
supply is a matter of critical national security and public
health. Currently, the U.S. reacts to drug shortages rather
than proactively forecasting them. Congress has the opportunity
to authorize systematic changes across federal agencies,
specifically by permitting data to be shared across agencies
and by improving the employment of predictive analytics.
Through comprehensive supply chain mapping and enhanced
predictive analytics with data transparency, the U.S. can
transition to a "predict and prevent" paradigm to forecast and
mitigate drug shortages resulting from natural disasters,
pandemics, or international trade disruptions.
The U.S. pharmaceutical market is heavily dependent on
foreign sources for key starting materials (KSMs), active
pharmaceutical ingredients (APIs) and finished dosage forms
(FDFs). This geographically concentrated reliance introduces
substantial vulnerabilities during geopolitical disruptions.
Currently, the U.S. Food and Drug Administration (FDA) is
tasked with reviewing and approving drug products to ensure
they are safe and effective for the market. While the FDA
possesses a tremendous amount of information regarding the
clinical and safety profiles of these drugs, it has not been
tasked with, or given resources for, managing economic and
commercial data to conduct a comprehensive, market-wide
analysis of the U.S. drug supply.
While the federal government has the authority to collect
certain types of information to assist in managing drug
shortages, other critical intelligence gaps prevent the
effective construction of a comprehensive drug supply database.
Although the FDA can request details concerning the
manufacturing processes, as well as lists of active and
inactive ingredients used, it remains unclear whether the FDA
actually receives all of this data or the extent to which this
information can be integrated internally or with external
datasets. Most alarmingly, the FDA acknowledges that it lacks
the requisite information to assess how quickly U.S.-based
manufacturers could scale up domestic production of APIs or
finished dose forms if a primary supplying nation-such as China
or India-were to suddenly cease supply to the U.S. market.
For decades, the pharmaceutical supply chain has operated
under a reactive "fail and fix" framework, leaving the nation
vulnerable to disruptions stemming from manufacturing failures,
natural disasters, or geopolitical tensions. To be sure, these
"fail and fix" efforts are a necessary part of mitigating the
impact of drug shortages, but they will not change the
trajectory or magnitude of future drug shortages and their
prevention. In order to shift toward a "predict and prevent"
model, a multifaceted approach is required: (1) construct and
maintain a dynamic and comprehensive national drug supply map;
(2) overhaul data collection to ensure seamless coordination
between all government agencies and appropriate private
entities; (3) proactively manage market demand and use data and
risk management plans on a market-wide basis; and (4) deploy
advanced artificial intelligence and predictive analytics to
forecast disruptions, implement structural changes, and
circumvent the impact of potential new and recurring threats.
To effectively employ predictive analytics, federal
agencies require reliable inputs, inter-agency coordination,
and comprehensive market visibility and strategic visioning.
Congress should enact legislation to implement the following
structural and data-driven improvements.
A. Authorize, Fund, and Build an Ongoing, Comprehensive
National Drug Supply Map
Predictive analytics algorithms cannot forecast disruptions
in a supply chain that is undocumented or poorly understood. To
address this, an in-depth, comprehensive, and ongoing map of
the U.S. drug supply chain is needed to pinpoint exactly where
each drug product-including its key starting materials, APIs,
and finished products-are manufactured. Congress should
authorize and fund a national agency or entity responsible for:
(1) building this comprehensive supply map; (2) making
transparent to the public appropriate data elements; (3)
linking to commercial sources with prescription drug use and
expenditure data; and (4) analyzing the data to estimate the
probability and risk of consequences of specific events that
can lead to drug shortages.
The foundation of a resilient pharmaceutical market is a
comprehensive, real-time map of the drug supply chain. An in-
depth mapping initiative is required to identify the precise
manufacturing pathways and geographical origins of key starting
materials (KSMs), active pharmaceutical ingredients (APIs), and
finished dose forms (FDFs).
The USP Medicine Supply Map: The United States
Pharmacopeia (USP) has developed a global Medicine Supply Map
that aggregates insights from over 22,000 global sites. This
tool successfully maps 91% of FDFs and 55% of APIs, calculating
vulnerability scores to offer quantifiable risk metrics. The
federal government should support, fund, expand, and utilize
such initiatives to ensure that it has a real-time,
comprehensive drug supply map. The government should
collaborate with and build upon the USP Medicines Supply Map.
Identifying Geographical Vulnerabilities: The U.S.
market relies heavily on foreign manufacturing, particularly in
China and India, which creates acute geographical
vulnerabilities and "single points of failure". A robust supply
map must pinpoint these dependencies to facilitate priorities
for re-shoring, near-shoring, and friend-shoring among critical
drug products.
Adopting the "New Zealand Transparency Model": To
maximize the utility of the supply map, the U.S. should adopt
transparency standards akin to New Zealand's MedSafe, which
maintains a public, searchable database of every approved
manufacturing site for every drug product on the market. This
transparency enables analysts to use product-specific, market-
wide, real-time data to provide insight into the potential and
real market impact of a quality failure, factory closure,
climate disaster, trade barriers, or other market disruptions.
B. Collect and Coordinate Data from Government and
Private Sources
A drug supply map is only as effective as the data
supporting it. Currently, pharmaceutical data is highly
fragmented across various federal and state agencies, including
the FDA, DEA, CDC, Department of Defense (DOD), Veterans
Affairs (VA), Department of Commerce, the Federal Trade
Commission (FTC) and a variety of other government entities.
Legislative Mandates for Data Collection: The CARES Act
significantly expanded the FDA's authority to collect supply
chain data. It expanded requirements for manufacturers to
notify the FDA of permanent discontinuances or interruptions in
manufacturing that could disrupt U.S. supply. Furthermore,
Section 510(j)(3) mandates annual reports from drug
manufacturers on monthly production totals for APIs and
finished drug products, providing the FDA insight into national
production capacity and output.
Upstream Sourcing Transparency: Drug manufacturers must
be required to report all sources of APIs and major excipients.
When an FDF manufacturer utilizes APIs from multiple sources,
they should disclose the percentage of the API originating from
each distinct source to facilitate accurate utilization, excess
capacity estimates, risk management, and remediation efforts.
COOL and Technological Integration: To effectively
utilize this data, the industry should integrate Country-Of-
Origin Labeling (COOL) into the digital supply chain. By
leveraging the 2D DataMatrix barcodes and Blockchain systems
already implemented for the Drug Supply Chain Security Act
(DSCSA), the origin data of every drug product can be tracked
securely from the factory to the patient. While pieces of this
data are known at various points in the market, it is not
aggregated comprehensively across the U.S. market to analyze
for structural and functional factors that can lead to market
and supply disruptions.
C. Prospectively Monitor and Manage the U.S. Drug Supply
Data collection must be paired with proactive data
management and interpretation. The U.S. government needs a
centralized infrastructure to analyze, predict, and coordinate
supply chain structure and function to minimize, prevent, and
mitigate real and potential drug shortages.
Establishing a Centralized Coordination Entity: The U.S.
should authorize a dedicated entity-such as a new Strategic
Pharmaceutical Policy Advisory Commission (Strategic PharmPAC),
an independent commission, or a public-private hybrid model.
This effort should work in coordination with the United States
Pharmacopeial Convention (USP)-to oversee the market-wide
health and security of the drug supply chain. This entity and
its efforts would integrate data across the federal government
and the private sector.
Prioritizing Critical Medications: Management efforts
should first focus on defining the set of "Critical Acute
Drugs" (drugs necessary in acute care, where a lack of
substitutes leads to severe health outcomes or death) and
"Essential Chronic Drugs" (drugs necessary to prevent patients
from seriously deteriorating from lack of therapy). The list of
critical drugs also needs to be regularly maintained and
updated.
Mandatory Risk Management Plans (RMPs): Under the CARES
Act, manufacturers of critical drugs and associated APIs are
required to develop, maintain, and implement Risk Management
Plans. Reporting of these RMPs to the FDA is mandatory for
critical drug products and the data from these plans should be
used to contribute to a comprehensive, ongoing data set and
related analysis to proactively identify and mitigate hazards
that could cause supply disruptions.
Develop and Adopt an OSCR Model for Drug Products: The
FDA's Office of Supply Chain Resilience (OSCR), which monitors
medical device supply chains, uses a structural model that
employs advanced analytics to identify risks, maintains a
Critical Medical Device List (CMDL), and enacts proactive
interventions to preserve availability. A similar, expanded
approach to supply chain resilience is needed for prescription
pharmaceuticals.
D. Predictive Analytics to Prepare for Challenges and
Threats
The final pillar of a resilient supply chain is the
employment of predictive analytics. Congress must fund public-
private research programs to develop "sentinel systems" that
can access and utilize big data to detect signals of strategic
change and security threats in the pharmaceutical network
serving the U.S. market.
AI and Machine Learning for Demand Forecasting:
Artificial intelligence and machine learning algorithms are
revolutionizing most industries by analyzing vast datasets of
historical trends, real-time supply chain updates, changes in
demand, and expected as well as unanticipated external factors.
Used effectively these tools can accurately forecast medication
demand, allowing companies and the market to anticipate
seasonal variations and demand surges, thereby reducing or
preventing stockouts.
Network-Level Intelligence Platforms: Modern predictive
analytics rely on massive, multi-enterprise data networks.
Platforms like TraceLink analyze flow data from over 38 billion
serialized units across 283,000 healthcare organizations to
predict drug shortages up to 90 days in advance with high
accuracy.
Pharmacy-Level Data Modeling: Predictive models can also
assess downstream vulnerabilities by evaluating data at the
level of individual National Drug Code (NDC) and Drug
Identification Number (DIN). Machine learning algorithms assess
variables such as the average days of supply (DOS) per patient
and month-to-month changes in the ratio of drugs dispensed
within therapeutic classes to signal impending clinical
shortages.
Sentinel and Early Warning Systems (EWS): Advanced
cognitive models can identify drugs at risk of shortage far
earlier than manual reporting. For instance, Premier Inc.'s
CognitiveRx AI model has reported an average accuracy of 75% in
early shortage detection, identifying at-risk drugs by an
average of 128 days before they were officially announced on
the FDA shortage list. The federal government should encourage,
fund, and develop sentinel models and systems based on
historical drug shortages patterns as well as systems to detect
new root causes for drug shortages such as geopolitical risk or
other new sources of disruption.
Summary
Assuring the resilience and security of the U.S. drug
supply requires an unprecedented level of data, transparency,
and technological integration. By establishing a National Drug
Supply Map, enforcing stringent upstream data reporting,
centralizing market-wide analysis and oversight, and leveraging
AI-driven predictive analytics, the United States can transcend
the inherent vulnerabilities of the globalized pharmaceutical
market. A framework for "Building a Strategic Pharmaceutical
Policy Advisory Commission" to accomplish these tasks is
presented in Appendix A. This integrated framework (when
properly authorized, funded, and managed) can ensure that
patients consistently receive life-saving medications,
regardless of manufacturing and quality failures, natural
events and disasters, or international trade disputes.
Question:
Dr. Schondelmeyer, you mentioned that transparency into
where and how medicines are made is critical for both patient
safety and supply chain security.
How would requiring country of origin or manufacturing
facility information on labels improve the security of our drug
supply chain, particularly for seniors in states like Georgia?
Response:
Thank you for this important and relevant question.
Everyone needs, or uses, prescription drugs at various points
during their lifetime. The quality and security of the
prescription drug supply in the United States is a critical
part of the national infrastructure that assures the
availability of effective drug therapy for all in America.
Seniors and other vulnerable populations, in particular, rely
heavily on daily medications to manage chronic conditions and
to improve their health status. The U.S. drug supply faces
serious challenges with respect to quality, recalls, and
shortages affecting many critical medicines. In addition, the
drug supply chain has become highly concentrated economically
and geographically and is heavily dependent upon two countries,
China and India, for key starting materials (KSMs), active
pharmaceutical ingredients (API), and finished dosage forms
(FDFs).
A senior filling a prescription in Georgia for a generic
blood pressure medication has no way of knowing whether their
tablets were manufactured in a state-of-the-art facility in the
United States or a sweat-shop facility in China or India with a
history of FDA warning letters or "Official Action Indicated"
(OAI) safety violations.\1\
---------------------------------------------------------------------------
\1\ Schondelmeyer, S.W. (2026, January 29). Statement on Real
Country-Of-Origin-Labeling (COOL) Transparency in the U.S.
Pharmaceutical Market: Foundation for a Secure & Resilient Drug Supply.
Testimony before the U.S. Senate Special Committee on Aging. See, also,
Schondelmeyer, S.W. (2024, February 6). Statement on A Resilient U.S.
Drug Supply: Current & Emerging Vulnerabilities. Testimony before the
U.S. House Committee on Ways & Means.
---------------------------------------------------------------------------
Prescribing physicians and pharmacists in Georgia could
actively choose to source drugs from manufacturers with
superior safety records, if this information was reliably and
publicly available. Thus, protecting seniors from recurring
risk due to economically-motivated adulteration or
contamination-such as the deadly global recalls of tainted
heparin from China or the generic blood pressure medications
(e.g., valsartan) made in India that were found to have
carcinogenic impurities.\2\
---------------------------------------------------------------------------
\2\ Schondelmeyer, S.W. (2025, June 5). Designing A Resilient U.S.
Drug Supply: Efficient Strategies to Address Vulnerabilities. Testimony
before the U.S.-China Economic and Security Review Commission.
---------------------------------------------------------------------------
Under the current opaque system, when a foreign
manufacturing plant suffers a catastrophic failure, quality
breach, or natural disaster, the U.S. market often experiences
cascading, panic-driven shortages. The exact origin of the
drugs dispensed to the patient are invisible to the physician,
the pharmacist, and the patient. Therefore, an FDA recall of a
drug product from a specific plant in China or India can cause
a nationwide panic, as pharmacists struggle to identify which
of their drug products are actually affected. Mandatory country
of origin labeling (COOL) transparency helps to correct this
market failure. By making a product's origin visible, it allows
group purchasing organizations (GPOs), Medicare plans,
physicians, pharmacists, and consumers to actively prefer and
reward resilience. This can provide the financial incentives
necessary for companies to "re-shore" or "near-shore" their
manufacturing, ultimately reducing the U.S. supply chain's
dangerous over-reliance on geopolitical rivals for life-saving
drugs. With clear labeling of the manufacturing source,
pharmacists could pull the tainted batches while confidently
dispensing the safe, unaffected batches to seniors, thereby
preventing substantial risks and disruptions of care.
U.S. law\3\ currently requires that "all products of
foreign origin imported into the United States must be marked
with their country of origin."\4\ The intent of this
requirement is to compel the manufacturer to disclose to the
public the country where their drug product is made. On June
14, 2024, a ruling by the U.S. Customs and Border Protection
(CBP) Headquarters in a letter (HQ H283420) to CVS Health\5\
declared that the `consumer at retail' is the `ultimate
purchaser', rather than the previous interpretation that it is
the `manufacturer selling to a pharmacy' This change makes
sense; however, it means that pharmacists are now responsible
to report the `country of origin' on the prescription label
when the medication is dispensed to a patient.\6\ Although this
is a good policy on its surface, its weakness comes because the
pharmacist is held responsible for labeling a prescription with
the `country of origin' which is information that must
ultimately come from the manufacturer who may, or may not,
report that information to the FDA, the pharmacist, or the
public.
---------------------------------------------------------------------------
\3\ U.S.C. 1304 and 19 C.F.R. 134.11.
\4\ U.S. Customs and Border Protection. "Fact Sheet: Marking of
Prescription Medication for Retail Sale." CBP Publication No. 3812-
0824. Accessed on January 24, 2026 at: https://www.cbp.gov/sites/
default/files/2024-08/
FACT%20SHEET%20Marking%20Prescription%20Medication%20for%20Retail%20Sale
.pdf.
\5\ U.S. Customs and Border Protection, Letter from Yuliya A.
Gulis, Director, Commercial and Trade Facilitation Division to JoAnne
Colonnello, Center Director, Pharmaceuticals, Health, and Chemicals,
Center of Excellence and Expertise, U.S. Customs and Border Protection,
6747 Engle Road, Middleburg Heights, OH 44130, dated June 14, 2024; HQ
H283420, OT:RR:CTF:CPMMA H283420 RRB, CATEGORY: Marking; RE: Internal
Advice; Country of origin marking requirements for repackaged
prescription medication sold by CVS Health; ultimate purchaser; 19
U.S.C. 1304; 19 C.F.R. 134.1(d)(1); 19 C.F.R.
134.25. Accessed on January 24, 2026 at: https://
rulings.cbp.gov/ruling/H283420.
\6\ U.S. Customs and Border Protection, Letter to Yulia A. Gulis,
June 14, 2024.
---------------------------------------------------------------------------
When a customer in Georgia fills a prescription at their
retail pharmacy such as CVS or their independent community
pharmacy, the pharmacist must provide the `country of origin'
for the drug product on the prescription label. This process
sounds simple enough; however, not all drug companies marketing
prescription drugs in the U.S. report the `country of origin'
identifying where their drug product is actually made. And,
some manufacturers report this information only to the FDA who
may, or may not, make the data public. If the manufacturer does
not report the `country of origin', the pharmacist is still
responsible to find and report the `country of origin' to their
patients. The large chain pharmacies such as CVS can assign
staff at their corporate office to research and compile this
information across the 70,000 to 100,000 drug products on the
market, so that their in-store pharmacists can comply with this
requirement. However, for an independent community pharmacy,
the process to search for the "country of origin" for each
prescription drug product may take the pharmacist 10 minutes to
30 minutes or more per prescription to search for this
information. And, the pharmacist may not be able to find the
`country of origin' if it is not made public by the
manufacturer.
While this policy appears workable in theory, it simply is
not practical. First, this process is dependent upon the
importer (i.e., manufacturer) to publicly report the `country
of origin' to the FDA as required and in a clearly understood
manner. Second, it is dependent upon the FDA passing the
information on to the public in a useable format. Third, the
search process by a pharmacist, at the store level, to find the
`country of origin' for many thousands of drug products so it
can be included on the prescription label is very time
consuming and is clearly not sustainable economically. Even
though the FDA may have this information for each specific
prescription drug product in its files or in electronic data
sets, if the data is not made public, the pharmacist cannot
report what he or she does not have and cannot obtain.
Clearly, this policy-no matter how well intended-will have
a severe differential negative impact on independent community
pharmacies and their patients. In a state, like Georgia, where
more than one-third of its pharmacies are locally and
independently owned, the economic burden of chasing `country of
origin' data that manufacturers may, or may not, have reported
to the FDA or the public is overwhelming. Absence of this
information will mean that physicians, pharmacists, and
patients cannot make purchase decisions that take into account
the geographic origin of a drug product. This impact will be
especially noticed by Georgians in rural and distressed urban
areas which often have a higher share of independent
pharmacies. This will also have a greater impact on seniors and
other vulnerable populations served in these communities.
While chain pharmacies dominate the overall share of
pharmacies in Georgia, especially in densely populated metro
areas (like Atlanta), independent pharmacies carry the vast
majority of the burden in rural and stressed regions of
Georgia. According to Georgia's Rural Center, 25% of all
Georgia counties (42 counties) have no corporate [chain]
pharmacies and rely entirely on local, independently owned
community pharmacies for their prescription drug access.\7\
Other types of pharmacies (such as Federally Qualified Health
Centers (FQHCs), hospital outpatient pharmacies, and
specialized clinics) are expected to have `country of origin'
labeling problems similar to those experienced by independent
community pharmacies. When these other pharmacy types are taken
into account, nearly one-half of all Georgia pharmacies could
be impacted by these short-comings and lack of public data on
`country of origin' information needed to support the
prescription labeling requirements. Only with two pre-requisite
obligations can community pharmacies meet the otherwise
impossible task of placing the `country of origin' on each
prescription label.
---------------------------------------------------------------------------
\7\Georgia's Rural Center. Rural Pharmacies and Patients at Risk:
PBM Practices Pose Risks to Independent Pharmacies, Updated Feb. 6,
2025. Accessed on February 12, 2026 at the website: https://
www.ruralga.org/post/rural-pharmacies-and-patients-at-risk-pbm-
practices-pose-risks-to-independent-
pharmacies#:text=the20National20Community20Pharmacy20Association,a20phar
macy20(Figure%201).
(1) Manufacturers (and marketers) should be required to
report to the FDA the `country of origin' for both the active
pharmaceutical ingredients and the finished dose form for all
---------------------------------------------------------------------------
prescription products marketed in the United States.
(2) The FDA should be required to compile this `country
of origin' information into easily machine-readable digital
files and publicly report the data through online web sites.
In summary, Georgia and other states, would benefit from
publicly disclosed `country of origin' on prescription labels.
This information can: (1) empower prescribers, pharmacists, and
patients to make wise purchase decisions based on the quality
history and geographic origin of drug products; (2) enable
rapid and targeted identification and removal of drug products
made in specific locations with known quality or contamination
problems; (3) support market-based incentives intended to
encourage and reward domestic or friend-shored production of
pharmaceuticals; and (4) utilize existing infrastructure and
data that has been reported in an opaque system including the
data collected under the Drug Supply Chain Security Act
(DSCSA).
Routine provision of "country of origin labeling" for
prescription medications would greatly improve transparency for
physicians and pharmacists, as well as purchasers and payers,
and most importantly for patients. Transparency regarding where
one's medications are actually being made is not merely a
matter of consumer preference; it is a matter vital to public
health and national security. Knowing where a drug comes from
can build trust in the quality and dependability of our U.S.
drug supply.
That trust begins with "truth and openness" from CLEAR
LABELS.
Question:
What steps can Congress take to enforce existing reporting
requirements and ensure greater transparency overall?
Response:
A number of recommendations are reported in my written
comments provided to the Senate Special Committee on Aging at
its Hearing on: "Truth in Labeling: Americans Deserve to Know
Where Their Drugs Come From" on January 29, 2026.\8\ Those
recommendations, and others, are re-stated and further
described here. Many of these recommendations can be
implemented as administrative actions and regulatory guidance,
while other recommendations may require statutory revisions or
additions. The Senate Special Committee on Aging members and
their staffs should work with FDA to identify the necessary and
most efficient way to accomplish the intent of the
recommendations described herein.
---------------------------------------------------------------------------
\8\ Schondelmeyer Stephen, "Real Country-Of-Origin-Labeling (COOL)
Transparency in the U.S. Pharmaceutical Market: Foundation for a Secure
& Resilient Drug Supply, presented at the Senate Hearing on Truth in
Labeling: Americans Deserve to Know Where Their Drugs Come From,
Statement before the Special Committee on Aging United States Senate,
Congress of the United States, Thursday, January 29, 2026, Washington,
DC.
---------------------------------------------------------------------------
The overall intent of the recommendations provided here is
to require country of origin labeling that provides the
ultimate purchaser-the American patient-with pharmaceutical
product labeling that clearly indicates where their
prescription medication was made. The term `country of origin'
may be abbreviated as COO, while the term `country of origin
labeling' may be abbreviated as COOL.
As noted in my written testimony, `country of origin
labeling' has emerged as a critical element in the contemporary
landscape of consumer goods, in general, and prescription
pharmaceuticals, in particular. COOL involves marking the drug
product received by the end-consumer with the name of the
country in which the product was actually manufactured or made.
For some industries, and in some trade agreements, the concept
of COOL is the place where the product was "manufactured,
processed, or substantially transformed." The definition of
where a pharmaceutical product is made is critical and should
be carefully and clearly defined. For pharmaceutical products,
the primary essence and value of the drug product is embodied
in its active pharmaceutical ingredient(s) (API), and not
necessarily in how or where it was processed or packaged. For
prescription drug products, the `country of origin' for the API
should be clearly defined as "the country which contains the
geographical location where the API is actually made."
Similarly, the `country of origin' for the finished product
should be clearly defined as "the country which contains the
geographical location where the finished product is actually
made."
First, Section 502 of the FD&C Act (21 U.S.C. 352)
should be reviewed and revised, if necessary, to ensure that it
includes a requirement that "the country of origin for the API
and the country of origin for the finished drug product must be
clearly marked on the label of the container in which the
finished product is sold in the U.S. market." Both the COO for
the API and the COO for the finished product are required. This
requirement for labeling of a drug product with both the COO
for the API and the COO for the finished product should apply
to any drug product at the National Drug Code (NDC) level being
sold by any labeler in the U.S. market. Recall that a `labeler'
"may be either a manufacturer, including a repackager or
relabeler, or, for drugs subject to private labeling
arrangements, the entity under whose own label or trade name
the product will be distributed."\9\
---------------------------------------------------------------------------
\9\ U.S. Food & Drug Administration. NDC Package File Definitions.
Content current as of July 21, 2022 and found on February 12, 2026 at
the website: https://www.fda.gov/drugs/drug-approvals-and-databases/
ndc-package-file-definitions.
---------------------------------------------------------------------------
Failure to include the country of origin for either the API
or the finished product should render a drug product as
`misbranded' and it should be subject to any and all remedies
available including, but not limited to, civil penalties and
fines, product seizures and destruction, injunctions to stop
manufacturing or distribution, refusal to import, voluntary or
mandatory recalls, and criminal prosecution including
misdemeanor to felony charges against the corporation and its
executives. In particular, misbranded products with respect to
lack of COO for either API or finished product on the end
product label should result in refusal to import to the U.S. or
recall and removal from the market for product originating in,
or otherwise being sold in, the U.S. market.
The intended net effect of the `country of origin labeling'
policy is that:
Any labeler of a prescription drug product at the NDC
level being marketed in the U.S. is responsible for placing the
COO for the API on the label of the end product container.
Any labeler of a prescription drug product at the NDC
level being marketed in the U.S. is responsible for placing the
COO for the finished product on the label of the end product
container.
The FDA or the Department of Justice may pursue civil
penalties and fines, product seizures and destruction,
injunctions to stop manufacturing or distribution, voluntary or
mandatory recalls, and criminal prosecution including
misdemeanor to felony charges against the corporation and its
executives of labelers not complying with the COO labeling
requirement for either the API or the finished product.
The Customs and Border Protection agency may refuse to
import any drug product not complying with the COO labeling
requirement for either the API or the finished product.
The requirement to comply with COOL for the API and COOL
for the finished drug product applies not only to a
prescription drug product manufacturer, but also to any
labeler, repackager, relabeler, marketer, distributor, or
private labeler of a drug product at the NDC level.
Simply reporting another drug product's NDC or FDA
approval number does not suffice for providing the COO for the
API or the finished product on the actual label for the
container holding the end product.
FDA sponsors, manufacturers, labelers, repackagers,
relabelers, marketers, distributors, private labeler of
products, or any other firm responsible for a prescription drug
product at the NDC level in the U.S. market is responsible to
report the COO for the API and for the finished product to the
FDA and its Structured Product Label (SPL) electronic listing
file system.
The COO for the API and the COO for the finished product
are required public information for marketing a prescription
drug product in the U.S. market, and this information may not
be declared as "Confidential Commercial Information".
The requirement for COOL for the API or the finished
product is not met by a manufacturer, labeler, marketer,
distributor, repackager, relabeler, or private labeler who
reports only the location of:
(1) the warehouse shipping the product;
(2) the corporate headquarters of the firm labeling,
marketing, selling, or distributing the product;
(3) the U.S. address of a subsidiary of a foreign-
owned company operating in the United States;
(4) the facility repackaging or relabeling the
product; or
(5) the pharmacy or healthcare entity dispensing the
medication.
Second, the labeler of any drug product at the NDC level in
the U.S. market should be required to report to the FDA, the
COO for the API and the COO for the finished product. The FDA
should be authorized, and required, to collect in text form the
COO for the API and the COO for the finished product. FDA
should add, or include data variables, if not already present
for reporting this required information in text form in its
Structured Product Labeling (SPL)\10\ electronic file for each
drug product at the NDC level.
---------------------------------------------------------------------------
\10\ U.S. Food & Drug Administration. Structured Product Labeling
Resources. Content current as of January 8, 2025 and found on February
12, 2026 at the website: https://www.fda.gov/industry/fda-data-
standards-advisory-board/structured-product-labeling-resources.
---------------------------------------------------------------------------
The FDA has traditionally treated the specific factory
location of an Active Pharmaceutical Ingredient (API) as
"Confidential Commercial Information" (CCI).\11\ FDA
Regulations (21 CFR 20.61) define "Confidential
Commercial Information" (CCI) as valuable data that is
"customarily held in strict confidence." As noted in my
testimony, there are numerous examples of drug firms (i.e.,
manufacturers and labelers) issuing public press releases about
building new facilities for production of specific API and
finished products to be sold as prescription drugs in the U.S.
market. The public and widespread disclosure of such
information clearly contravenes the current FDA definition of
"Confidential Commercial Information". This regulation, and
related FDA guidance, regarding "Confidential Commercial
Information" should be reviewed and revised, if necessary, to
exclude COO for the API and COO for the finished product from
the definition of CCI. Both the COO for the API and the COO for
the finished product should be defined as `required public
information' that must be disclosed at the NDC level for any
prescription drug product marketed in the United States.
Consequently, labelers reporting prescription drug product
information to the FDA's SPL electronic file system should not
be permitted to declare the COO for the API and the COO for the
finished product as "Commercial Confidential Information"
resulting in this information being suppressed or withheld from
the public.
---------------------------------------------------------------------------
\11\ U.S. Food & Drug Administration. FDA Fact Sheet: Information
Sharing: 20.88 Agreements & Commissioning. Content current as of
February 12, 2026 and found on February 12, 2026 at the website:https:/
/www.fda.gov/media/109437/download.
---------------------------------------------------------------------------
The data submitted by labelers to the FDA's SPL electronic
file system is used by the National Library of Medicine (NLM)
to populate a drug profile on the consumer-facing DailyMed
website.\12\ The `About DailyMed' section on the website
describes that it provides to the public "the most recent
labeling submitted to the Food and Drug Administration (FDA) by
companies and currently in use (i.e., "in use" labeling)."\13\
As of February 12, 2026, the DailyMed database contained
154,834 products with labeling information submitted to the FDA
by the product's labeler.\14\ For each drug product, with
related NDC numbers grouped together, there are 17 enumerated
sections as well as several other sections including: SPL
Unclassified Section; Medication Guide; Package/Label Principal
Display Panel; and Ingredients and Appearance.
---------------------------------------------------------------------------
\12\ National Library of Medicine, DailyMed. About DailyMed.
Content accessed on February 12, 2026 at the website:
dailymed.nlm.nih.gov/dailymed/about-dailymed.cfm.
\13\ The FDA-approved Prescribing Information (PI) for approved
human prescription drug and biological products contains a summary of
the essential scientific information needed for the safe and effective
use of the product. The PI includes boxed warnings, indications, dosage
and administration, contraindications, warnings and precautions,
adverse reactions, drug interactions, information about use in specific
populations, and other important information for healthcare
practitioners. FDA-approved patient labeling (e.g., Patient
Information, Medication Guide, Instructions for Use) is directed to the
patient, family, or caregiver. FDA-approved carton and container
labeling communicate information that is critical to the safe use of
prescription drug and biological products from the initial
prescription, to procurement, to preparation and dispensing of the
drug, to the time it is given to the patient.
\14\ National Library of Medicine, DailyMed. Content accessed on
February 12, 2026 at the website: dailymed.nlm.nih.gov/dailymed/
index.cfm.
---------------------------------------------------------------------------
Looking on the DailyMed website for information related to
`country of origin' for the API or the finished dose form is
somewhat like playing `Hide and Seek'-the information may, or
may not, be there but you have to look for it; and, it is not
always contained in the same location for each drug product or
DailyMed profile. The DailyMed website reports various types of
information in each of the 17 enumerated sections of the FDA-
approved Prescribing Information. Typically, none of the first
16 sections contain any country of origin (COO) information,
and only sometimes do Section "17 PATIENT COUNSELING
INFORMATION" or later sections contain country of origin
information. If there is COO information in Section 17 it is
usually found only at the very end of the FDA-approved Patient
Labeling information where the `Medication Guide' is presented.
The drug product, Revlimid (lenalidomide), was used as an
example from the DailyMed website to show what information is
provided with respect to the `country of origin' for the
manufacturer of the API and the manufacturer of the finished
product for this specific drug product\15\ (See Appendix B). At
the very top of the DailyMed Profile is a heading that
indicates the "Packager" of the Revlimid product is "Celgene
Corporation" and no country is reported as the location for
this corporate entity (Appendix B.1.). Eight different sections
on the DailyMed website (i.e., Section "17 Patient Counseling
Information"; "Medication Guide"; and six versions of the
"Package/Label Display Principal Panel" with one label (as only
a jpg image) for each of 6 different strengths of Revlimid)
report that the product is "Marketed by: Bristol-Myers Squibb
Company, Princeton, NJ 08543 USA" (Appendix B.2., B.3., and
B.4). One additional place at the very end of the DailyMed
website (i.e., the Ingredients and Appearance section)
indicates that the "Labeler" for this product is "Celgene
Corporation (174201137)" (Appendix B.5.). In the DailyMed
profiles for other drugs, this section sometimes lists specific
`Establishments' or companies involved in the supply chain for
the specific drug product such as Revlimid. Among the `Business
Operations' listed are `API Manufacture' and `Manufacture' (of
finished dose form). There was no list of `Establishments' or
manufacturing functions on the DailyMed website for Revlimid.
This implies that the `Labeler' for Revlimid has indicated in
the SPL electronic submission system that information on the
API manufacturer and the finished dose form manufacturer were
considered `Commercial Confidential Information' or that they
were not reported at all, thus suppressing this information
from being reported on the DailyMed profile. An example of a
DailyMed profile showing business operation information is
provided using the generic version of lenalidomide (Cipla USA
Inc.) to illustrate what types of information are available and
are sometimes reported (Appendix B.6.).
---------------------------------------------------------------------------
\15\ National Library of Medicine, DailyMed, LABEL: REVLIMID-
lenalidomide capsule. Content updated as of March 24, 2023 and found on
February 12, 2026 at the website: dailymed.nlm.nih.gov/dailymed/
drugInfo.cfm?setid=5fa97bf5-28a2-48f1-8955-f56012d296be.
---------------------------------------------------------------------------
The overall finding from examining the Revlimid profile on
the DailyMed website is that the public information included
identifies the `Packager' as Celgene Corporation; that it is
`Marketed by' Bristol-Myers Squibb Company; that it is a
`Product of Switzerland'; and that the `labeler' is Celgene
Corporation. The Revlimid DailyMed profile did not identify the
source of the API or the country of origin for the `API
Manufacturer', although a generic version of this drug
(lenalidomide) does identify both the source of the API and the
country of origin for the `API Manufacturer'. Because there was
no standardized location for the `country of origin'
information in the DailyMed profile and there was a lot of text
material to be reviewed, it took about an hour to read through
and search the entire DailyMed profile of Revlimid to check for
information on the `country of origin' for the API and the
`country of origin' for the finished product.
From experience reviewing DailyMed profiles and looking for
country of origin information, the locations where this
information is most likely to be found were:
(1) near the end of the section titled "17 PATIENT
COUNSELING INFORMATION;"
(2) near the end of the section titled "Patient
Package Insert", if present;
(3) in the section titled "PACKAGE LABEL PRINCIPAL
DISPLAY PANEL;" which may have jpg images of the drug product
label; or jpg images of the outer carton surrounding the bulk
package; or
(4) near the end of the section under the heading
"INGREDIENTS AND APPEARANCE" under the sub-heading titled
"Establishment" and listing `Business Operations'.
In contrast to searching for the `country of origin'
information on the DailyMed profile and website, as described
above, a similar search was performed on the New Zealand
MedSafe website.\16\ The information found on the MedSafe
website for Revlimid capsules 10 mg (Bristol-Myers Squibb (NZ)
Limited is shown in Appendix C. Within 2 minutes this
information was found and it reported not only the country of
origin for API and the finished dose form, but also the name of
each manufacturing company and its address. This MedSafe
example demonstrates that the `country of origin' information
can be provided in a more consumer-friendly and easy to find
format. Also, the disclosure of the `country of origin'
information is, and can be, made available in a public-facing
environment.
---------------------------------------------------------------------------
\16\ New Zealand Medicines and Medical Devices Safety Authority.
MedSafe. MedSafe Product Detail. Revlimid Capsule 10 mg. Accessed on
February 12, 2026 at the website: https://www.medsafe.govt.nz/DbSearch/
ProductDetail.asp?ID=13399.
---------------------------------------------------------------------------
One final comment on the information found in the DailyMed
product profiles concerns the quality of the jpg images
published on the site. The FDA and NLM rely on the product
sponsor and/or labeler to provide jpg images of the container,
carton, and label for prescription products listed in the SPL
database and presented on the DailyMed website. Some of the jpg
images are of such poor quality that they cannot be accurately
read or understood. One such example is provided in Appendix D.
Appendix D first shows the DailyMed listing for the Metformin
Hydrochloride-Tablet, Extended Release (Appendix D.1.). In
Appendix D.2. the jpg image of the product label is shown. Upon
examining this label: Can you read the NDC number of the
product? Can you find the Labeler Name? Can you find the
Manufacturer for the API or the Finished Product? Can you find
the `Country of Origin' for the API or the Finished Product?
Not all of this information is on the label provided. However,
even if all of this information was there, clearly one cannot
read it. The point is, if the FDA SPL electronic data system is
going to request label images (and they should), the images are
of no value if they are not readable. At present, some
information on the label images (such as `country of origin"
for the API or the finished product) is found nowhere else in
the data presented on the DailyMed product profile. The FDA
should require submission of label images through its SPL
electronic data system, and it should require that jpg images
meet minimum readability and pixel density requirements.
The FDA should address the following issues to facilitate
making `country of origin' labeling publicly accessible
including reporting of the information on the NLM DailyMed
profiles of prescription products:
The `country of origin' for the API should be required,
publicly accessible, and reported in a text format in a
standard place on the DailyMed website.
The `country of origin' for the finished product should
be required, publicly accessible, and reported in a text format
in a standard place on the DailyMed website.
The `country of origin' for API should be reported using
the phrase: "API Made in ----------" immediately preceding the
country where the API is actually manufactured and no variation
in this preceding phrase is acceptable.
The `country of origin' for finished product should be
reported using the phrase: "Product Made in ----------"
immediately preceding the country where the finished product is
actually manufactured and no variation in this preceding phrase
is acceptable.
FDA should add a text field variable for the API
`country of origin' to its National Drug Code Directory\17\ NDC
product file\18\ list of variables.
---------------------------------------------------------------------------
\17\ U.S. Food and Drug Administration. National Drug Code
Directory. Content current as of February 5, 2026 and accessed on
February 12, 2026 at: https://www.fda.gov/drugs/drug-approvals-and-
databases/national-drug-code-directory.
\18\ U.S. Food and Drug Administration. NDC Product File
Definitions. Content current as of March 12, 2024 and accessed on
February 12, 2026 at: https://www.fda.gov/drugs/drug-approvals-and-
databases/ndc-product-file-definitions.
FDA should add a text field variable for the finished
product `country of origin' to its National Drug Code Directory
---------------------------------------------------------------------------
NDC product file list of variables.
FDA should encourage commercial databases such as
MediSpan and First DataBank to add text variables for the API
`country of origin' and the finished product `country of
origin' in their drug product reference and dispensing system
data files.
FDA should require reporting of both API and finished
product `country of origin' in a standard location in the FDA-
approved Prescribing Information (PI).
FDA should require reporting of both API and finished
product `country of origin' in a standard location in the FDA-
approved Patient Medication Guide.
FDA should require reporting of both API and finished
product `country of origin' in a standard location in the FDA-
approved product carton labeling.
FDA should require reporting of both API and finished
product `country of origin' in a standard location in the FDA-
approved product package labeling.
FDA and NLM should report in the "Ingredients and
Appearances" Section of the DailyMed profile the API
Manufacturer firm name, the ID/FEI, and the `Country of
Origin'.
FDA and NLM should report in the "Ingredients and
Appearances" Section of the DailyMed profile the finished
product Manufacturer firm name, the ID/FEI, and the `Country of
Origin'.
The intent of the `country of origin' labeling (COOL)
requirement is to provide the consumer (i.e., the patient) with
easily accessible and understandable information about where
their prescription medications were made. Both the country of
origin for the active pharmaceutical ingredient (API) and the
finished product should be disclosed to the public so that
they, along with their physician and pharmacist, can make a
conscious selection of the medicines they choose and use. When
a prescription medicine is made using API from a factory in
China and a finished product prepared in India, that is then
marketed by a business entity in the United States; it is
misleading to give the impression that the product is made in
the USA. Yet, this is the situation for many prescription
products in the U.S. market, and they are assumed to be made in
the USA when actually they are not. If all prescription
products are not clearly labeled with the true `country of
origin', consumers may lose trust in the quality and confidence
in the effectiveness of the U.S. medicines supply.
`Country of origin labeling' (COOL) serves as a mechanism
to inform buyers about their product's origin and to inform
their perceptions of quality, safety, economics, or even their
presumed patriotism and support of free markets. With respect
to pharmaceuticals, safety, efficacy, and quality assurance of
the medication are paramount. Knowing the country of origin for
the product can directly affect consumer trust in the
regulatory scrutiny and oversight of pharmaceutical production.
Furthermore, COOL indicates the regulatory frameworks, economic
strategies, environmental conditions, political systems, and
international trade policies that may have surrounded and
influenced the making of the end-product. COOL is a tangible
means to provide transparency, support consumer decision-
making, and encourage a fair and competitive market.
Knowing where a drug comes from can build trust in the
quality and dependability of our U.S. drug supply. That trust
begins with "truth and openness" from CLEAR LABELS.
[GRAPHICS NOT AVAILABLBE IN TIFF FORMAT]
U.S. Senate Special Committee on Aging
"Truth in Labeling: Americans Deserve to Know Where Their Drugs Come
From"
January 29, 2026
Questions for the Record
Stephen Colvill
Senator Raphael Warnock
Question:
The Federal Trade Commission and the U.S. Department of
Health and Human Services launched an investigation into group
purchasing organizations (GPOs) in 2024 to understand their
potential contribution to generic drug shortages, which
affected Georgians' access to cancer and rheumatoid arthritis
medications.
What role do GPOs play in the stability of the domestic
pharmaceutical supply chain?
Response:
Distinguishing between various health care settings,
including the health system setting, independent oncology
clinic setting, and retail setting, is important to understand
the roles of various types of GPOs and other entities in the
generic drug supply chain. Drug reimbursement methodologies,
contracting practices, and other market dynamics differ in each
of these settings.
In the health system setting, traditional GPOs (Vizient,
Premier, HealthTrust) negotiate contract prices and terms
between their member health systems and manufacturers. These
traditional GPOs do not take possession of or title to the
drugs and do not markup the drugs. Traditional GPO contracts
impact drug usage in hospitals along with other sites of care.
In the independent oncology clinic setting, wholesalers
(Cencora, McKesson) and wholesaler-affiliated GPOs often
negotiate contracts with manufacturers of oncology drugs used
in community oncology clinics. Wholesalers take possession of
and title to the drugs before distributing them.
In the retail setting, retail GPOs (RedOak, Walgreens Boots
Alliance, ClarusOne) negotiate contracts with manufacturers on
behalf of retail pharmacies. Pharmacy benefit managers (PBMs)
are most influential in this retail setting, but PBMs are
markedly different from GPOs.
In all these settings, GPOs have significant negotiating
power, in part due to consolidation, and they use that power to
secure favorable contract pricing and terms from manufacturers.
My professional experience has mostly involved the hospital and
health system setting, where I have observed contract
negotiations from both the manufacturer and GPO perspective. In
this setting, I have observed traditional GPOs use their market
power to pursue the interests of their health system members.
The "Race to the Bottom" section of my full written
testimony provides a detailed overview of the interests of
health systems related to generic drug purchasing. In summary,
for already-inexpensive generic drugs, resource-constrained
health systems focus significant efforts on obtaining the
lowest cost at a point in time without adequate consideration
for reliable availability over time. These health system
priorities shape the actions of their GPOs.
In recent years, some limited progress has been made on
better valuing reliable availability of critical generics. Some
health care providers have begun entering into new committed
contracting models that have been pioneered by new entities
such as Civica Rx, and traditional GPOs and wholesalers also
now offer committed contracting models. These committed
contracting models are designed to offer greater assurance of
demand for manufacturers and assurance of supply for providers.
The committed nature of these models creates a greater
incentive for purchasers to vet suppliers and for manufacturers
to ensure reliable delivery of products over time. However,
while such committed contracting models have demonstrated some
success, they currently represent a small share of generic drug
contracts in the U.S., and drug shortages persist. Many
resource-constrained health systems opt not to participate in
committed contracting models (or participate minimally) and
instead continue to seek out the lowest cost short term
suppliers. In addition, health systems and their GPOs could
also take other important steps to identify and purchase from
reliable manufacturers. For example, health systems and their
GPOs could require manufacturers to be evaluated through third-
party drug supply chain reliability benchmarking programs.
However, uptake of such benchmarking programs has also thus far
been limited.
In the "An Alternative: Aligning Incentives Towards
Reliable Availability" section of my full written testimony and
the response to Question 2 below, I outline how Congress could
address drug shortages by aligning health care provider
incentives to better value the reliable availability of
critical generic drugs.
Question:
How can Congress keep GPOs accountable and improve older
adults' access to quality and affordable drugs?
Response:
Congress should enact Medicare payment reforms to
incentivize health care providers to take steps to support the
reliable availability of critical generic drugs.
In a recent white paper, Duke-Margolis proposed a
simplified version of the Medicare Drug Shortage Prevention and
Mitigation Program originally outlined in a 2024 Senate Finance
Committee Discussion Draft. Our proposal would reward health
care providers when they 1) purchase through committed
contracting models and 2) identify and purchase drugs that meet
reliability benchmarks. If this proposal is implemented, GPOs
would be well-positioned to support a shift towards a more
reliable supply chain. Rather than focusing their negotiating
power too much on obtaining the lowest cost, GPOs could instead
use that same negotiating power to demand reliable availability
and higher levels of quality assurance from manufacturers. The
market could also use reliability benchmarking programs to
observe the extent to which GPOs and health systems contract
with reliable manufacturers.
Lastly, healthy competition is essential for a well-
functioning market. Congress should ensure that health care
providers have the opportunity to select from a range of
different competing GPOs and other service providers and that
new entrants (both new GPO entrants and new manufacturer
entrants) have an opportunity to succeed in a competitive
market. Levels of market concentration and consolidation should
be continually assessed.
Senator Andy Kim
Question:
Current Requirements for Country-of-Origin Information
There are current requirements for country-of-origin
information involving multiple government entities, however,
this could also lead to confusing or conflicting requirements.
Currently drug manufacturers must comply with label and
labeling requirements of the Food and Drug Administration,
country of origin information requirements by Customs and
Border Protection (CBP) (which is further influenced by trade
agreements such as the USMCA), and government procurement
requirements.
Can you detail the current regulatory environment and where
there may be gaps and potential overlap?
Response:
Customs and Border Protection (CBP) generally relies on a
"substantial transformation" standard to determine country-of-
origin for the purpose of determining tariffs and other
requirements that apply to U.S. imports. The final "substantial
transformation" for drugs most commonly (but not always) occurs
when the active pharmaceutical ingredient (API) is produced.
The Tariff Act of 1930 also requires that imported goods be
marked with the country-of-origin in a manner visible to the
"ultimate purchaser" in the United States. A controversial 2024
CBP ruling determined that the "ultimate purchaser" in the
retail pharmacy setting should be the patient rather than the
dispensing pharmacy.
Direct federal procurement, such as purchases by VA and DoD
governed by the Federal Acquisition Regulation (FAR), generally
preferences pharmaceuticals that have a country-of-origin in a
Trade Agreements Act (TAA) compliant country. Prior to the U.S.
Federal Appeals Court decision in Acetris Health, LLC v. United
States, federal agencies generally deferred to CBP's
"substantial transformation" country-of-origin determinations
for the purposes of direct federal procurement. However,
following the Acetris decision in 2020, country-of-origin
determinations for the purposes of direct federal procurement
may now be based on where the product is "manufactured". This
is different from CBP's standard and means that a product with
an API from China that is "manufactured" into its final dosage
form in a TAA-compliant country may now be considered TAA-
compliant for the purposes of direct federal procurement, even
if the most important production step occurred in China.
FDA labeling requirements in the Federal Food, Drug, and
Cosmetic Act (FD&C Act) currently dictate that a drug is
misbranded unless its label includes the name and "place of
business" of the manufacturer, packer, or distributor. In many
cases, the "place of business" of the final manufacturer,
packer, or distributor differs from the country-of-origin as
determined by the CBP and direct federal procurement standards
described above. The "place of business" may be a company's
corporate headquarters and may not be a manufacturing site at
all. The CLEAR Labels Act introduced by Sen. Scott and Sen.
Gillibrand in February 2026 would require unique facility
identifiers for both the original API manufacturer and the
original finished drug product manufacturer to be listed in the
drug's labeling information. This CLEAR Labels Act approach
would provide much more useful public information regarding
locations of production than the current FD&C Act requirements.
Potential Next Steps on Labeling
Requiring manufacturers to include unique facility
identifiers in their labeling information would make it fairly
straightforward for third parties to create user-friendly
databases that allow patients, purchasers, researchers, and the
public to identify where drugs are made. Congress should note
that exempting manufacturers from the labeling requirements in
the Tariff Act of 1930 may cause patients picking up a
prescription at a retail pharmacy to not be able to see the
country-of-origin on the physical drug label. That said, having
one common set of labeling requirements through the FD&C Act
(rather than divergent requirements from FDA and CBP) that
enables the creation of user-friendly databases that patients
and others can use to identify where drugs are made could be a
common-sense approach. Ensuring the right information is
available digitally may be more important than what is listed
on the physical label.
Country-of-origin determinations for the purposes of direct
federal procurement would need to be addressed separately.
Legislation could close the "Acetris loophole" by directing
revision of the FAR definition such that country-of-origin
would be determined only by where a drug is "substantially
transformed" rather than where a drug is "manufactured". This
would refocus country-of-origin determinations for the purposes
of direct federal procurement on the most important production
step.
Question:
Accessible Country-of-Origin Information
Information about where prescription drugs are manufactured
is not always visible to patients or policymakers, and
purchasing decisions for prescription drugs are often made be
entities other than the end user, including hospitals,
pharmacies, and group purchasing organizations. These dynamics
affect the potential impact of pharmaceutical labeling reforms
in both provider-administrated and retail drug settings.
Additionally, as we consider increasing transparency, we must
also balance how we achieve more accessible information with
security risks from sharing too much about key manufacturing
sites. What practical changes should pharmaceutical labeling
reforms be expected to achieve on their own? Beyond country-of-
origin labeling, are there additional reforms we can focus on
here in Congress to strengthen our domestic supply chain of
quality active pharmaceutical ingredients and drugs and protect
our national security?
Response:
Pharmaceutical labeling reforms, if effectively designed,
could have a positive, yet limited, impact. Americans deserve
to know where their drugs come from, and better availability of
information about manufacturing locations of drugs might, over
time, cause more drugs to be sourced domestically. However, for
provider-administered drugs, impacts of labeling reforms are
likely to be limited, as many decision makers already know
where API and finished drug products are made or can acquire
this information if desired. For retail drugs, impacts of
labeling reforms are also likely to be limited, as patients
have minimal influence over what drugs the retail pharmacies
and retail GPOs decide to stock.
The Committee should carefully weigh any negative
consequences that may arise from labeling reforms and consider
how to mitigate them. Just because a drug is made in the U.S.
does not necessarily mean that it is the best choice - some of
the most significant past shortages have resulted from
manufacturing issues in U.S. plants. Site location alone is not
necessarily indicative of reliability or quality. Other
assessments of reliability and quality, such as through the
benchmarking programs described previously, are also needed.
Pharmaceutical labels also may illuminate certain stages of
production while obscuring other risks, such as from upstream
key starting material (KSM) dependencies. KSM mapping and
vulnerability assessment exercises will remain critical. The
Committee should also consider that any labeling reforms may
impact the information that is ultimately available to
institutional buyers, health care providers, and patients in
different ways. Other potential negative consequences include
increased regulatory burden, potential impacts to patient
medication adherence, and potentially more easily enabling bad
actors to identify potential targets. The Committee could
consider whether FDA should be provided with the authority to
exempt some drugs from a requirement to disclose unique
facility identifiers if there is a compelling safety or
national security reason to do so, such as for some controlled
substances.
Regarding other steps to more meaningfully improve the
reliability of our domestic supply chain, financial incentives
for purchasers is the most important area to focus. See more in
the answer to Question 3 below.
Question:
Financial Incentives for Purchasers
Purchasers of prescription drugs, including pharmacies and
providers often, face financial pressure that influence which
products are selected and stocked. Without targeted incentives,
efforts to encourage the use of more reliable or domestic
suppliers may be limited. Financial incentives for purchasers
are a critical component of addressing drug shortages and
maintaining a resilient supply chain. What limitations remain
as we think through how to meaningfully reduce chronic drug
shortages?
Response:
I agree that targeted financial incentives for purchasers
are needed to meaningfully address drug shortages and create a
resilient supply chain for critical generic drugs.
In a recent white paper, Duke-Margolis proposed a
simplified version of the Medicare Drug Shortage Prevention and
Mitigation Program originally outlined in a 2024 Senate Finance
Committee Discussion Draft. Our proposal would create new CMS
incentives for health care providers to 1) purchase through
committed contracting models and 2) identify and purchase drugs
that meet drug supply chain reliability benchmarks. Costs from
such a program would likely equate to <0.1% of total U.S. drug
spending.
An additional limitation to meaningfully addressing chronic
drug shortages is that drug supply chain reliability
benchmarking programs are not yet widely adopted. Supply chain
reliability benchmarking programs can objectively assess
aspects of manufacturer supply chains such as redundancies,
available manufacturing capacity, buffer stock, risk mitigation
plans, and commitment to quality culture. These programs can
then communicate insights to the market regarding which
manufacturers, product supply chains, and/or manufacturing
facilities are more reliable than their competition.
Unfortunately, these benchmarking programs are not yet widely
adopted on the supply-side or the demand-side. Wide supply-side
adoption would entail a substantial share of manufacturer
supply chains for critical products being evaluated through the
programs. Wide demand-side adoption would entail the
incorporation of resulting program insights into a substantial
share of purchasing and contracting decisions.
To address this limitation, Congress could provide funding
to HHS and DoD to de-risk the development, testing, and
adoption of reliability benchmarking programs. This could set a
foundation for future CMS payment reform that could target
incentive payments to providers that purchase from reliable
suppliers.
=======================================================================
Statements for the Record
=======================================================================
U.S. Senate Special Committee on Aging
"Made in China, Paid by Seniors: Stopping the Surge of International
Scams"
January 14, 2026
Statement for the Record
Opening Statement of Senator Kirsten E. Gillibrand, Ranking Member
Chairman Scott, thank you for calling today's hearing and
thank you to our witnesses for being here.I'm looking forward
to continuing our conversation on how we can improve the
quality and reliability of our generic drug supply chain,
particularly the role of increased transparency.
As we have heard in our previous hearings, these supply
chains are vulnerable to disruption, and with decreased
domestic manufacturing, we are putting ourselves in an
increasingly perilous position.
Given recent instability in geopolitics and international
trade policy, this reliance on foreign drugs increases the risk
that Americans may not have access to life-saving drugs in
times of crisis, threatening our national security.
However, we must approach strengthening and reforming this
extremely complex supply chain thoughtfully and thoroughly.
One piece of this puzzle is increasing supply chain
transparency through country-of-origin labeling.Country-of-
origin labeling is a common tool that is used on thousands of
products, most prominently in textiles and food.
It gives consumers clear information on the origins of
their products, providing them with additional information that
may influence whether they purchase an item.
Pharmaceuticals are also required to disclose this
information; however, it may be difficult for patients to track
it down.
As we will hear from our witnesses today, providing
transparency to consumers is extremely important, but it is not
the only solution to improve the reliability and quality of the
drug supply chain.
Country-of-origin labeling does not necessarily equate to
higher or lower quality drugs, and there are additional steps
that Congress can take to ensure that all drugs in our supply
chain, both domestic and foreign, are of the highest quality.
We must examine the underlying economic dynamics in the
current marketplace and adjust incentives to fix the "race to
the bottom" in generic drug pricing, which can create drug
quality issues, drive manufacturing outside of the United
States, or cause companies to stop production of certain drugs
or chemicals altogether.
Transparency must also be coupled with expanded supply
chain mapping as well as quality benchmarking.Coupled together,
these proposals will create a more resilient drug supply chain
that can lead to improved stability for manufacturers and
purchasers, increased consumer confidence in the quality of
their medications, and a potential resurgence of domestic
production.
While the vast majority of the medications that patients
use are both safe and effective, increased transparency and
supply chain mapping will improve long-term decision making for
manufacturers to invest in quality and reliability.
I am excited to hear from our witnesses today as they are
discussing policy proposals that can be undertaken by Congress.
I look forward to working with Chairman Scott and other
committees of jurisdiction as we work to increase the
transparency and reliability of our drug supply chain.
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