LS&HC Horizons 2022 - Flipbook - Page 66
Hogan Lovells | 2022 Life Sciences and Health Care Horizons
66
United States
Buy American: Efforts to strengthen the U.S. industrial base
Sparked largely by the Covid-19 pandemic, efforts continue this
year to strengthen the U.S. health system supply chain. Indeed, the
pandemic brought to light the extensive dependencies that U.S.
pharmaceuticals, biologics, and medical device manufacturers have on
material and component suppliers located ex-U.S.
Key government agencies, including the Department of Health and
Human Services, were instructed by the White House in early 2021 to
conduct in-depth research - together with industry partners - to identify
the specific dependencies that pose risk to the public health system.
To spur use of U.S. supplies in the short term, the U.S. government
has applied stricter domestic preferences in the context of Federal
procurement. Specifically, the administration took steps in early 2022
to increase the domestic content thresholds in Federal procurements.
Allison Pugsley
Partner, Washington, D.C.
However, in cases where components are simply not available from
domestic suppliers, domestic preferences in procurement are of
limited utility. This is particularly relevant in the health and medical
industry, where the majority of certain critical components, such
as active pharmaceutical ingredients, are manufactured overseas
in countries such as China and India, where production costs are
substantially lower.
In an effort to address this imbalance, within the last year, a flurry
of legislation has been proposed to create incentives to maintain and
expand manufacture of drugs, devices, and critical inputs in the U.S.
Proposals include tax incentives and other “carrots” for U.S. industry.
We can expect these initiatives to continue to be front and center over
the course of 2022.
Joy Sturm
Partner, Washington, D.C.
