The FDA has launched its PreCheck program and a new ANDA Prioritization pilot, ostensibly to address supply chain vulnerability by promoting domestic pharmaceutical manufacturing. Driven by the narrative that the globalization of drug production compromises U.S. safety and security, these programs offer expedited reviews for new U.S. sites and generic drugs made entirely with domestic API and finished dosage form manufacturing. While aiming to bolster national capacity, it is crucial to contextualize this policy within the sophisticated, mutually beneficial structure of the global pharmaceutical ecosystem.
The core mechanisms of the FDA’s initiatives are clear: PreCheck provides manufacturers with early technical advice on facility design through a two-phase approach, including pre-operational reviews and the submission of a facility-specific Type V Drug Master File (DMF). This is designed to streamline the regulatory process and ensure Current Good Manufacturing Practice (CGMP) compliance upfront. Concurrently, the ANDA prioritization pilot promises faster review times for generic drug applications that utilize exclusively domestic API and finished product manufacturing. Both policies respond to the valid concern that the U.S. has become heavily reliant on foreign sources, with a staggering 69% of generic drugs having at least one foreign manufacturer, and only 9% of API manufacturers residing domestically.
The Contextualization: Onshoring as a Specialized Tool
The perceived benefit of onshoring, framed by the FDA, is achieving supply chain resiliency through complete domestic control. By incentivizing the domestic base, the goal is to prevent drug shortages and mitigate risks associated with geopolitical events. Programs like PreCheck and prioritized ANDA review provide regulatory clarity and speed, which can certainly attract some manufacturers. However, this approach is based on a narrow premise that often ignores the profound economic and strategic benefits of the current globalized supply chain.
The Counter-Argument: Global Co-existence and Economic Logic
The fundamental flaw in the FDA’s policy lies in its premise: that foreign manufacturing inherently harms the U.S. population. In reality, the global drug supply chain operates not on a principle of dominance or vulnerability, but on mutual co-existence and comparative advantage. U.S. pharmaceutical companies continue to dominate the high-margin sector, leading the world in the manufacture of innovative, complex drug and biologic products. By strategically off-shoring the production of low-margin, simpler generic drugs to cost-effective regions, U.S. manufacturers can free up capital and domestic capacity to focus resources on higher-margin, proprietary new drug development. This economic specialization is a core driver of modern industry.
Furthermore, this inexpensive foreign manufacturing has been a massive net positive for U.S. healthcare, leading directly to the expansion of affordable generic drug access for American consumers. The global integration also directly benefits U.S.-based companies by opening foreign markets for their specialized products, adding substantial revenue streams that fund domestic R&D.
The industry’s caution, as articulated by groups like BioPhorum, confirms that manufacturing location is a business-driven decision, dictated by economic factors like labor rates and infrastructure, not merely regulatory expedience. The current policies fail to address underlying regulatory inefficiencies that undermine the promised domestic benefit, notably the lack of Mutual Recognition Agreements (MRAs) between the FDA and major global regulators. A domestic facility, even with PreCheck, still faces duplicative and costly inspections from foreign agencies to sell globally, which negates the domestic streamlining efforts. Until the FDA confronts these global harmonization hurdles and the significant economic differential that pushes low-margin production overseas, programs like PreCheck risk becoming a minor incentive for a few specialized products rather than a major shift in the entire global supply chain.
While the FDA’s PreCheck and ANDA prioritization programs offer a tangible incentive for select domestic investment, they rest on a simplified, anxiety-driven view of a complex global system. The continued success of the U.S. pharmaceutical industry hinges not on isolation, but on specialization and embracing the mutually beneficial nature of the global drug supply chain. True, long-term supply chain security requires not just domestic incentives, but regulatory harmonization that recognizes global interdependence and economic reality.
