Hearings to examine drug safety, supply chains, and the risk to aging Americans.

1[Senate Hearing 119-166]2[From the U.S. Government Publishing Office]34                                                     S. Hrg. 119-16656                       PRESCRIPTION FOR TROUBLE:7                    DRUG SAFETY, SUPPLY CHAINS, AND8                      THE RISK TO AGING AMERICANS9=======================================================================1011                                HEARING1213                               BEFORE THE1415                       SPECIAL COMMITTEE ON AGING1617                          UNITED STATES SENATE1819                    ONE HUNDRED NINETEENTH CONGRESS2021                             FIRST SESSION2223                               __________2425                             WASHINGTON, DC2627                               __________2829                           SEPTEMBER 17, 20253031                               __________3233                           Serial No. 119-143435         Printed for the use of the Special Committee on Aging3637[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3839        Available via the World Wide Web: http://www.govinfo.gov4041                               __________4243                    U.S. GOVERNMENT PUBLISHING OFFICE4461-634 PDF                 WASHINGTON : 202645=======================================================================4647                       SPECIAL COMMITTEE ON AGING4849                     RICK SCOTT, Florida, Chairman5051DAVE McCORMICK, Pennsylvania         KIRSTEN E. GILLIBRAND, New York52JIM JUSTICE, West Virginia           ELIZABETH WARREN, Massachusetts53TOMMY TUBERVILLE, Alabama            MARK KELLY, Arizona54RON JOHNSON, Wisconsin               RAPHAEL WARNOCK, Georgia55ASHLEY MOODY, Florida                ANDY KIM, New Jersey56JON HUSTED, Ohio                     ANGELA ALSOBROOKS, Maryland57                              ----------58                McKinley Lewis, Majority Staff Director59                Claire Descamps, Minority Staff Director6061                         C  O  N  T  E  N  T  S6263                              ----------6465                                                                   Page6667Opening Statement of Senator Rick Scott, Chairman................     168Opening Statement of Senator Kirsten E. Gillibrand, Ranking69  Member.........................................................     37071                           PANEL OF WITNESSES7273Peter Baker, Former FDA Inspector, President, Live Oak Quality74  Assurance, Austin, Texas.......................................     475George Ball, Ph.d, Associate Professor and Weimer Faculty Fellow,76  Kelley School of Business, Indiana University, Bloomington,77  Indiana........................................................     678Brandon Daniels, CEO, Exiger, Washington, D.C....................     879Ronald Piervincenzi, Ph.D, CEO, U.S. Pharmacopeia, Washington,80  D.C............................................................    108182                                APPENDIX83                      Prepared Witness Statements8485Peter Baker, Former FDA Inspector, President, Live Oak Quality86  Assurance, Austin, Texas.......................................    4287George Ball, Ph.d, Associate Professor and Weimer Faculty Fellow,88  Kelley School of Business, Indiana University, Bloomington,89  Indiana........................................................    4790Brandon Daniels, CEO, Exiger, Washington, D.C....................    5591Ronald Piervincenzi, Ph.D, CEO, U.S. Pharmacopeia, Washington,92  D.C............................................................    619394                        Questions for the Record9596Peter Baker, Former FDA Inspector, President, Live Oak Quality97  Assurance, Austin, Texas.......................................    7698George Ball, Ph.d, Associate Professor and Weimer Faculty Fellow,99  Kelley School of Business, Indiana University, Bloomington,100  Indiana........................................................    80101Brandon Daniels, CEO, Exiger, Washington, D.C....................    83102Ronald Piervincenzi, Ph.D, CEO, U.S. Pharmacopeia, Washington,103  D.C............................................................    85104105                       Statements for the Record106107AARP Statement...................................................    99108American Society of Health-System Pharmacists (ASHP) Statement...   101109Amneal Pharmaceuticals LLC Statement.............................   106110Association for Accessible Medicines Statement...................   109111Indian Pharmaceutical Allicance (IPA) Statement..................   122112National Consumers League Statement..............................   130113Partnership for Safe Medicines Statement.........................   132114115                       PRESCRIPTION FOR TROUBLE:116                    DRUG SAFETY, SUPPLY CHAINS, AND117                      THE RISK TO AGING AMERICANS118119                              ----------120121                     Wednesday, September 17, 2025122123                                        U.S. Senate124                                 Special Committee on Aging125                                                    Washington, DC.126    The Committee met, pursuant to notice, at 3:24 p.m., Room127216, Dirksen Senate Office Building, Hon. Rick Scott, Chairman128of the Committee, presiding.129    Present: Senator Scott, McCormick, Johnson, Moody,130Gillibrand, Kim, and Alsobrooks.131132                 OPENING STATEMENT OF SENATOR133                      RICK SCOTT, CHAIRMAN134135    The Chairman. Nearly everyone will be prescribed a136medication at some point. Whether it be an antibiotic for an137infection or a treatment for a chronic condition, people depend138on access to safe and high-quality medications. This is139especially true for seniors.140    In 2021, a federal study found that 88.6 percent of older141Americans surveyed reported having been prescribed at least one142medication in the past 12 months. Ninety-one percent of143prescriptions filled are for generic drugs. The problem is the144United States relies disproportionately on foreign made generic145drugs from communist China and India.146    The U.S. currently depends on overseas manufacturers for147about 75 percent of its essential, essential drug supply.148Communist China is not our friend. They are the world's largest149producers of the active pharmaceutical ingredients, and India150relies on Communist China for approximately 80 percent of the151active pharmaceutical ingredients they use.152    A study from Washington University in St. Louis found that15383 percent of the top 100 generic drugs consumed by U.S.154citizens have no U.S. based active source--U.S. based source of155active ingredients. Not only is the U.S. over-dependent on156foreign drugs, but these foreign drugs are often lower quality157and more dangerous than drugs manufactured in the United158States.159    Earlier this year, a study showed that serious adverse160events like hospitalization and death were 54 percent more161likely for foreign generic drugs compared to American made162drugs. Bad drug quality doesn't just mean that a drug is less163effective--it can kill. In 2007, 2008, the medication Heparin164had contaminated ingredients from Communist China, killing165nearly 100 people.166    Deaths from unsafe medications like these, contaminated167Heparin, devastated families. LeRoy Hubley lost his wife of 48168years, Bonnie, and his son, Randy, just weeks apart. Bonnie and169Randy died due to contaminated Heparin that they needed for170their dialysis treatment. They were undergoing due to a genetic171kidney disease. People who relied on their medication, and172trusted that it was safe, died. This was an absolute tragedy173and must never happen again.174    Almost 20 years later, we are still seeing many of the same175problems and quality issues that existed back then. There is176still no routine testing done by the FDA and no incentive for177quality. In 2023, contaminated eye drops from India killed four178people and caused adverse events in at least 55 patients.179    Foreign drug manufacturing plants simply aren't subject to180the same level of oversight as manufacturing plants here in the181United States, and Americans are--that doesn't make sense to182any American. Inspections of drug manufacturing facilities in183the Unites States--they are unannounced.184    In Communist China and India, many inspections are pre-185announced up to weeks in advance, giving manufacturers time to186present false conditions or conceal non-sterile and unsafe187manufacturing practices. While many quality issues present an188immediate threat to the lives of seniors and their loved ones,189supply chain vulnerabilities presents an existential threat to190the country.191    I know my remarks paint a very dark picture of the reality192we face, but it gets much worse. Think about this, if Communist193China or India want to shut down the supply of prescription194drugs to the United States, they can do so at any moment, and195currently the United State does not have a backup plan.196    Let me say that again. If the Communist China or India197decide to stop supplying the United States with prescription198drugs, we will run out of prescription drugs very quickly and199people will die. Let that sink in. Millions of Americans will200not have life-saving drugs available to them. Americans will201get sick. Americans will die. We have seen China place expert202restrictions on rare earth elements over trade negotiations,203and there is no reason they can't do that for drugs.204    Additionally, during the COVID-19 pandemic, we saw India205block the export of critical ingredients. Many of the206disruptions were prompted by supply chain disruptions from207Communist China, the birthplace of the COVID-19 pandemic. We208simply cannot rely on other countries, especially those who209want to destroy us like Communist China for something as vital210as essential medicines.211    Yet, despite these dangers, we still depend almost entirely212on Communist China and India for generic medications, and their213grip on the market continues to grow. As of 2021, Communist214China and India accounted for 85 percent of active drug master215file submissions--85 percent--applications submitted to the FDA216by companies that want to supply drug ingredients to another217company.218    In 2000, that accounted for just 24 percent. The219Administration for Strategic Preparedness and Response, the220federal agency that oversees the Strategic National Stockpile,221ensures the Nation has medical countermeasures ready for public222health emergency, lacks the data to understand the supply chain223of the key starting materials or critical building blocks for224pharmaceuticals.225    Communist China has a stranglehold on antibiotics, with 90226percent of global antibiotics being of Chinese origin. While227Communist China and India have dominated the market, American228manufacturing has just withered away. A 2024 report from the229API Innovation Center stated that in the past decade, the230number of facilities located in the U.S. that produce active231pharmaceutical ingredients has decreased by 61 percent.232    In 2024, the U.S. manufactured 37 percent of its consumed233pharmaceuticals. Just over 20 years ago, in 2002, that figure234was 83 percent. Over 40 percent of generic drugs sold in the235U.S. have just one FDA approved manufacturer. I am a business236guy. You would never rely on one supplier.237    This means in the event of a shortage, the FDA must238scramble to find an alternative. In 2023, the chemotherapy drug239Cisplatin went into shortage due to the FDA placing import240restrictions on the manufacturer that accounted for 50 percent241of the market. There was no FDA approved alternative, which242forced the FDA to turn--unapproved Chinese drug company to fill243in the gap. The supply chain is unacceptably vulnerable, and we244can't just hope that shortages won't occur.245    If we can't solve this problem, our public health and246national security are in grave danger and people will die. We247will soon hold another hearing to discuss the solutions to248these problems, but the American people deserve to know the249dangers of bad quality medications and a vulnerable supply250chain.251    Now, let me turn it over to the Ranking Member Gillibrand252for her opening statement.253254                 OPENING STATEMENT OF SENATOR255             KIRSTEN E. GILLIBRAND, RANKING MEMBER256257    Senator Gillibrand. Thank you, Chairman Scott, for calling258today's hearing. I really appreciate it. Thank you to our259witnesses for being here today. Combating drug shortages and260supporting high quality generic drug production is one of the261most important issues facing Congress today.262    In 2023, I heard from countless New York constituents who263struggled with access to chemotherapy treatment due to264shortages of essential generic cancer drugs, including265Cisplatin and Carboplatin. When you are fighting a disease as266devastating as cancer, the last thing you want to worry about267is whether the life-saving drug you need is available.268    Another issue that is extremely concerning is the quality269of generic drugs, especially those that we import from270overseas. I have heard time and time again the difficulties the271FDA foreign inspectors face when they are inspecting these272foreign facilities. This can include basic logistical support273or a third-party translator.274    When an inspector is abroad for months in a place where275they may not speak the language, it can be very disheartening.276Inspectors can also be put in a position where they must277recommend the closure of a facility, but this can have a278cascading effect of domestic generic shortages.279    The FDA needs adequate funding and support from Congress to280ensure that they cannot only conduct these inspections but also281enforce violations to protect the health and safety of the282American public. We also need to work on solutions that promote283transparency and quality benchmarks in the generic drug supply284chain. The pharmaceutical supply chain can be very long and285opaque, where several countries and companies are manufacturing286various ingredients at various levels of quality.287    Purchasers need to be incentivized to purchase high-quality288drugs that have proven reliability and a proven reliable supply289chain. Hospitals and practitioners are spending millions of290dollars a year due to drug shortages.291    Ultimately, it is the health and safety of our patients and292our constituents that are being put at risk. I am looking293forward to working on bipartisan solutions to promote safe and294reliable supply chains for generic drugs. Thank you, Mr.295Chairman.296    The Chairman. Thank you, Ranking Member. I would like to297welcome our witnesses, experts who are here to talk about why298dangerous, low-quality drugs have been allowed to enter the299U.S. market and just how reliant we are on foreign countries300for the medications we need. First, I would like to recognize301Peter Baker.302    Mr. Baker is a former FDA Inspector who spent time in both303India and Communist China. As an Inspector, he witnessed304firsthand the unsafe manufacturing conditions and tactics used305by manufacturers to deceive and even obstruct the FDA from306conducting proper investigations of manufacturing facilities.307    Mr. Baker, thank you for being here today and I look308forward to hearing your testimony.309310        STATEMENT OF PETER BAKER, FORMER FDA INSPECTOR,311      PRESIDENT, LIVE OAK QUALITY ASSURANCE, AUSTIN, TEXAS312313    Mr. Baker. Chairman Scott, Ranking Member Gillibrand,314members of the Committee, thank you for the opportunity to315testify today. I want to thank you for this bipartisan focus on316enhancing the security of our generic pharmaceutical supply317chain.318    When a patient, especially those most vulnerable, such as319the young and old, fill a prescription which has a 91 percent320chance of being generic here in the U.S., there could be no321doubt about the safety and efficacy of the medicine, or if the322generic will perform as well as the brand name.323    There are too many uncontrollable variables to allow this324one to play any role. The FDA has a long history of protecting325and promoting public health and performs extremely challenging326work around the world on a daily basis to achieve that goal327through site inspections, often in remote corners of the world328that do not have internationally recognized regulatory bodies,329which I will refer to as unregulated markets.330    FDA investigators often have to deal with demanding travel331conditions and can fall ill due to other unsafe conditions,332such as drinking untreated water, a contaminated meal,333communicable and non-communicable diseases, or fall prey to334other risks often present in still developing nations.335    The majority of our overseas pharmaceutical inspections are336pre-announced, often up to two months in advance of our337arrival. In my experience, upon arrival for the inspection, a338strong smell of paint is in the air, fresh paint. The339landscaping is immaculate. All garbage cans are empty.340    Potential problematic operations are all shut down, some341employees are sent home, and critical operations are342choreographed as if performing on a stage. Those of us who343performed foreign inspections refer to this as the dog and pony344show, which is frustrating because this is serious business.345    How do I know this to be true? Having spent seven years in346three different FDA foreign offices starting in 2012, based out347of our embassies strategically located around the world, we348were tasked with developing inspection techniques capable of349identifying if products exported to the U.S. from unregulated350markets were really meeting our standards because things seemed351too good to be truth. No rejected batches. No issues at all,352really.353    We knew the quality of products being manufactured in Ohio354but really had no idea what was happening outside of our355borders, especially in unregulated markets. We spent countless356hours reviewing computer records, dug through piles of garbage,357and showed up at times unannounced.358    Booking our travel through Expedia versus the embassy359travel portal to alleviate any concerns, someone would tip off360the sites to our plans. What we found was terrifying. This361testimony only addresses the tip of a massive iceberg. Fake362laboratories pumping out hundreds of results a day that363certified products as 100 percent pure when in fact the product364was never tested.365    For those products that did get tested, any failing result366was simply ignored and replaced by a fabricated passing value.367We identified filthy registered shadow facilities that would368funnel their drugs through modern and clean registered sites369which we refer to as the show facility.370    We found fabricated manufacturing and quality records,371painting a picture of a site in total compliance, when in fact372substandard or fake medicines were being shipped to the U.S. by373the tens of thousands a day. Following these experiences, I374have no doubt that adverse events, including death happen on a375daily basis here in the U.S. as a result of substandard generic376products from unregulated markets.377    The true culprit of these preventable adverse reactions378lies in shortcuts and fraud. Shocking inspection reports379continue to roll in on a monthly basis. The bad players list is380no secret, and they continue to avoid any significant381consequences. Meanwhile, those most vulnerable in our society382taking these drugs have no idea of the games being played and383certainly no idea that the game as designed today can never be384won.385    Personally, if I had a choice, I would never consume a drug386product produced in an unregulated market, and any experienced387FDA investigator will give you the same answer. When my 91-388year-old grandma was alive, we would go pharmacy hopping around389our rural Oregon hometown in hopes of finding a batch that was390made by a reliable producer. Sometimes we succeeded and391sometimes not.392    I remember one time having to settle for a product393manufactured by Rambaxi, who had just settled with the DOJ for394$500 million for faking countless data points used to395demonstrate their products were safe. I tried to stay positive396because causing her panic wasn't going to help, but inside I397felt sick, and I was not the one receiving cancer treatment.398    I urge this Committee to consider these four points. One,399harsher penalties for companies who engage in illegal practices400via the existing authority within FDA and DOJ. Two, changes to401labeling so that patients can see where their medications were402made and put pressure on supply chain decisionmakers to prevent403them from taking a pill made from an unregulated market.404    Three, independent third-party testing of every batch of405every product arriving from an unrelated market. The European406Union already does this, and it is a proven model. Four,407resources to support the foreign pharmaceutical inspection408program.409    The FDA has made great progress to increase the number of410unannounced inspections they are conducting, but they need411additional resources to be directed to expand the number and412quality of unannounced inspections as already outlined by413Commissioner Makary's public statements. Thank you for your414time and attention to this important matter. I welcome your415questions.416    The Chairman. Thank you, Mr. Baker. Next, I would like to417introduce Dr. George Ball from Indiana University, where his418teaching and research focus on operations, supply chains, and419regulatory compliance in the drug industry.420    Dr. Ball has been at the forefront of generic drug quality421research, analyzing the intersection of global manufacturing,422FDA oversight, and patient safety.423    His work provides critical insights into how supply chain424vulnerabilities translate into risk for American consumers. In425a study published this past February, he and his colleagues426found that generic drugs manufactured in India have higher427rates of adverse events compared to those made here in the428United States.429    This research highlights in measurable terms what other430witnesses have seen firsthand. Weaknesses in oversight of431foreign manufacturing can directly affect the safety and432quality of medicines reaching American patients. Dr. Ball,433thank you for being here. I look forward to your testimonie.434435      STATEMENT OF GEORGE BALL, PH.D, ASSOCIATE PROFESSOR436437          AND WEIMER FACULTY FELLOW, KELLEY SCHOOL OF438439       BUSINESS, INDIANA UNIVERSITY, BLOOMINGTON, INDIANA440441    Dr. Ball. Thank you, Chairman Scott, Ranking Member442Gillibrand, and members of the Committee for the invitation to443speak with you. As Chairman Scott mentioned, I am an Operations444Management Professor at the Kelly School of Business at Indiana445University.446    For the last 15 years, I have researched causes of product447quality problems in FDA regulated industries. Prior to that, I448spent a decade as a medical device manufacturing manager. Most449recently, my research has examined generic drug quality and FDA450policy. These topics are the focus of my detailed submitted451written testimony, which I will briefly overview now.452    In my view, the root cause of the generic drug quality453problem is the original design of the generic drug marketplace.454While the Hatch-Waxman Act lowered health care costs via455affordable generic drugs, it relies on an unrealistic456assumption. That is, if an original drug is safe and of high457quality, then its generic counterparts will be as well,458requiring little quality verification and no transparency.459    Why is this unrealistic? The answer lies in operations460research regarding cost and quality, as well as sources of461defects. First, quality is not free. Higher quality products462normally require higher production costs. Further, quality463defects originate from two primary sources, design and464manufacturing. While the design of a generic drug must be465equivalent to that of the original, two equivalently designed466drugs can be made in vastly different ways.467    One can use well-trained employees, sophisticated468equipment, and mature suppliers that make premium raw469materials. Another can be made using poorly trained employees,470cheap equipment, and corner cutting suppliers. In a market471where quality is assumed to be high, while it is unverified and472opaque, the rational economic choice is to focus solely on473cost. This will nearly guarantee poorly manufactured drugs.474    This assertion, however, has remained predominantly475theoretical because identifying where a drug is made, which476allows one to study plant, firm, or country level factors that477may influence drug quality is quite onerous. As mentioned, a478team of colleagues and I have recently published a study479referenced in my submitted testimony that begins to address480this gap.481    We exactly match generic drugs made in the U.S. against482equivalently designed generic drugs made India. We find that483generic drugs made in India, particularly older ones that have484lower profit margins with greater incentives to cut costs, have485significantly more serious adverse events than equivalent486generics made in U.S. Two working papers that our team has487under review, also referenced in my testimony, provide two488policy changes that may help mitigate this problem.489    Transparency is first and foremost. In an experimental490study with thousands of subjects, we find that consumers and491pharmacists are unconvinced by FDA messaging that generic drug492quality is to be trusted regardless of where it is made. We see493a strong preference for U.S. and Canada made drugs over China494and India made ones when we only reveal manufacturing location.495    However, when location and quality are both made496transparent, quality tempers these location effects. High497quality China or India made drugs are preferred over lower but498moderate quality U.S. or Canada made drugs. When comparing499equally high-quality drugs however, subjects continue to prefer500U.S. and Canada over China and India.501    Drug quality and location transparency can enable market502forces to reward firms for high quality regardless of where503they are made while simultaneously incentivizing high quality504onshoring and near shoring of generic manufacturing. Second to505this is aligning FDA's inspection strategy across the globe.506    As has already been mentioned, the FDA inspects China and507India plants after giving weeks or months of advance notice508versus conducting them unannounced in the U.S. In another509working paper that we have under review, we have examined newly510available data from an FDA unannounced inspection pilot511conducted in India. We conclude that pre-announcing inspections512hinders the FDA's ability to assess the true state of quality513at foreign manufacturing plants.514    We show that such inspection obscurity aggravates the cost515only focused on harming generic drug quality. I advocate for516drug quality and location transparency, as well as global FDA517inspection parity. Our research indicates these two changes518should help to meaningfully improve generic drug quality. Thank519you.520    The Chairman. Thank you, Dr. Ball. I would like to521introduce Brandon Daniels. Mr. Daniels is the Chief Executive522Officer of Exiger, a global leader in supply chain risk523management, transparency, and compliance.524    With decades of experience in regulatory compliance and525technology, Mr. Daniels has led efforts to help Governments and526private industry strengthen the security and integrity of527critical supply chains, including those in pharmaceuticals,528defense, and healthcare.529    At Exiger, he has overseen the development of innovative530tools that identify vulnerabilities, improve visibility, and531help ensure that products and medicines reaching American532consumers are safe, reliable, and free from hidden risk. Mr.533Daniels, thank you for being here, and I look forward to your534testimonie.535536                 STATEMENT OF BRANDON DANIELS,537                 CEO, EXIGER, WASHINGTON, D.C.538539    Mr. Daniels. Chairman Scott, Ranking Member Gillibrand, and540distinguished members of the Committee, thank you for the541opportunity to testify today.542    For 20 years, I have worked with pharmaceutical and medical543device companies supporting them through some of the most544significant crisis management and litigation matters affecting545their product development, research, and supply chains.546    During the COVID-19 pandemic, I served on the White House's547Joint Acquisition Task Force where I worked alongside federal548partners to secure PPE, medical devices, and life-saving549pharmaceuticals.550    That experience underscored for me the fragility of our551pharmaceutical supply chains and the urgent need for reform. In552my role at Exiger, I am leading the development of artificial553intelligence to map supply chains down to their raw material554origins.555    This work reveals, in precise detail, the vulnerabilities556hidden in our healthcare system. The scope of this problem is557enormous. America's medicine cabinet is no longer made in558America.559    Nearly three-quarters of the essential medicines used in560the United States are sourced overseas. India now supplies561about half of the generic drugs we consume, but 80 percent of562the active pharmaceutical ingredients that make those drugs563possible come from China.564    In Fiscal Year 2024, Chinese firms supplied 77 percent of565India's penicillin G and 94 percent of its 6-APA, which is the566indispensable intermediate for penicillin-derived antibiotics.567This concentration creates a dangerous single point of failure568for drugs that every hospital, clinic, and pharmacy in this569country depend on.570    That means a Medicaid prescription filled in Ohio, or a571Medicare prescription processed in Florida can often be traced572back to a Chinese supplier. The choke points for our most basic573medicines are controlled by Beijing, and we are not just574dependent, we are actively financing that dependency.575    In 2024, Medicaid reimbursed more than $150 million to a576single generic drug company that sourced ingredients from at577least six Chinese firms tied to forced labor and national578security concerns. Dual eligible patients who represent just579about 14 percent of Medicaid enrollment, but consume more than580a third of its spending, are the most exposed to this fragile581system.582    Every taxpayer dollar spent on these medicines strengthens583the leverage Beijing has over our health care system. The584consequences for seniors and all American citizens cannot be585ignored. As Chairman Scott mentioned, contaminated eye drops586from India have left American seniors permanently blind.587    Blood pressure and diabetes medications imported from Asia588have been recalled after testing positive for carcinogenic589impurities. These are not outliers. Over 30 percent of recent590FDA import alerts involve Chinese producers, and another 16591percent involve Indian suppliers. These are the very countries592we rely on most.593    Even more troubling, our data shows that forced labor is594woven into these pharmaceutical supply chains. Chinese state-595owned enterprises with documented links to Uyghur forced labor596in Xinjiang supply raw materials and active ingredients that597ultimately find their way into drugs consumed by Americans.598    This creates both an economic competitiveness barrier599through labor arbitrage and a quality hazard for U.S.600pharmaceutical supply chains. The weakness in our medicine601cabinet is also a weakness in international security. More than60254 percent of the Department of War's pharmaceutical supply603chain is classified as high or very high risk because of604reliance on foreign suppliers.605    Chinese State media has openly suggested that drug exports606could be withheld as a weapon in conflict. In that scenario,607the most basic medicines in our hospitals, our pharmacies, our608military stockpiles could become tools of coercion. No609adversary needs to fire a shot if they can choke off our access610to antibiotics or insulin. The path forward will not be simple,611but it is clear.612    We must expand domestic production of critical medicines,613particularly antibiotics and essential generics. We must614diversify supply chains to trusted allies and ensure no federal615program relies on a single country. We must enforce forced616labor laws so that no American patient consumes medicine617produced through coercion.618    We must demand transparency at every level, using modern619mapping and monitoring to stress test these supply chains620before they fail.621    The stakes could not be higher. Every time a senior fills a622prescription, every time the service member receives treatment,623every time our children and grandchildren need to fight an ear624infection, there is a real chance the supply chain leads back625to a potentially compromised source.626    Thank you for your time this afternoon. I look forward to627answering any questions you may have.628    The Chairman. Thank you, Mr. Daniels. Now we are going to629hear from the Ranking Member to introduce the next witness.630    Senator Gillibrand. Thank you, Chairman Scott. I want to631move to introduce our next witness, Dr. Ronald Piervincenzi. As632Chief Executive Officer of U.S. Pharmacopeia, Dr. Piervincenzi633is responsible for providing strategic leadership to his global634staff of over 1,300 employees.635    Dr. Piervincenzi has helped USP modernize and expand its636operations, including in the areas of digital medicine,637advanced biologics, quality manufacturing, consulting, and638education. You may begin.639640          STATEMENT OF RONALD PIERVINCENZI, PH.D, CEO,641              U.S. PHARMACOPEIA, WASHINGTON, D.C.642643    Dr. Piervincenzi. Thank you, Ranking Member Gillibrand, and644Chairman Scott, and members of the Committee for the645opportunity to provide the testimony here today about the646United States medicine supply chain that our Nation's seniors647rely on.648    As CEO of the United State Pharmacopeia, sometimes I have649to describe who we are, and USP is an independent scientific650nonprofit organization founded on the 1st of January in 1820651when 11 physicians gathered together in the old Senate chamber652concerned about the safety and quality of imported medicines to653the then new United States. On that day, they formed the654world's first national Pharmacopeia.655    Today, the 1,200 employees work with hundreds of scientific656experts to set thousands of quality standards for medicines.657USP also offers ingredient verification, product quality658testing, and programs to advance the adoption of pharmaceutical659advanced manufacturing technologies.660    USP works to strengthen medicine supply chains to ensure661that patients, and especially older Americans managing their662chronic conditions, can access the generic medicines they need,663when they need them, and very importantly, to trust in their664consistent quality.665    Low-cost generic drugs, which account for over 90 percent666of the U.S. medicine supply, have grown quantitatively and667increasingly vulnerable due to geopolitical tensions, natural668disasters, pandemics, and importantly, market pressures. The669globalization has expanded capacity and lowered costs, but it670has also made the supply chains longer, more fragmented, and671less transparent, jeopardizing both patient care and national672security.673    Since launching the medicine supply map in 2019 to gain674insight into an opaque supply chain, USP now analyzes 94675percent of U.S. prescription drugs, providing an unprecedented676visibility into key public health and national security677vulnerabilities. USP's work quantitatively points to four678interconnected drivers of our vulnerability. The first is a679continual downward pricing pressure on generic drugs that680creates an unsustainable market for these essential medicines.681    The vulnerability number two, is manufacturing complexity,682which is limiting capacity and causing an even greater risk.683Third vulnerability is geographic concentration, exposing684supply to single points of failure wherever those might be, and685finally, the fourth vulnerability are quality disruptions,686which destabilize the supply.687    These four factors combine to create an environment that688undervalues resilience, constrains abilities to build689redundancy, and discourages reinvestment in quality systems.690This leaves patients, especially vulnerable seniors, at risk of691delayed access or reliant on less effective secondary692treatments. It is simply unacceptable when we know practical693solutions exist.694    No one stakeholder is to blame for the current supply--for695the current state of our supply chain, but our hurdle is rather696our willingness to take this first step together. Solution must697uphold quality, incentivize greater stewardship of our supplied698chain, and preserve the savings that generic medicines have699delivered to patients and seniors.700    I commend the chair and the ranking member for their701holistic approach and respectfully urge the Committee to702consider the following solution in three parts. Part one is to703improve the supply chain visibility, identifying key704vulnerabilities and updating this assessment continuously.705    Tools like the medicine supply map provide the intelligence706needed for proactive risk management. Understanding risk starts707with increasing visibility into our current blind spots such as708the vulnerable essential medicines, widely used excipients, and709single-sourced key starting materials. We recommend authorizing710an annual assessment that provides insights into our most711significant vulnerabilities and makes recommendations for712mitigation.713    These insights could help guide commercial investment to714shore up risky supply lines, certainly involve and inform715policymaking, and direct agency attention and funding where it716matters most.717    Part two of the solution is to create pathways for America718to innovate and scale new methods for manufacturing essential719medicines. Advanced manufacturing, alternative synthesis720routes, and new biology-based methods are no longer721theoretical.722    USP is partnering with ARPA-H today to explore wheat germ723extract as a U.S. based method for producing a critical API,724thymidine, an example of how the U.S. Government might leverage725advanced manufacturing to reduce reliance on foreign sources726for key ingredients, and part three, establish a benchmark for727a stronger, more resilient medicine supply.728    The most important factor underlying the fragility of the729U.S. medicine supply chain is the unsustainable U.S. generics730market. Pricing pressure on low-cost essential medicines drives731generic drug purchases below sustainable production costs,732discouraging investment in quality systems and pushing733manufacturing offshore. Shifting the paradigm to reward a more734resilient supply of medicines is central to promoting an735environment that values reliability, reinvestment in quality736systems, and a competitive domestic industrial base.737    Specifically, we propose a resiliency benchmark for738manufacturers of important medicines prepared with incentives739for purchasers to prioritize those who need it, encouraging740sustainable procurement and investment in quality systems,741surge capacity, diversified supply, and greater domestic742production.743    To help ensure that America's seniors have consistent744access to quality, the Government should leverage Medicare's745significant purchasing power, along with the DOD-NVA to746incentivize the resilience. Strengthening the supply is a747national security imperative and critical to millions of748seniors.749    Together we can and must forge a more secure future for750America's medicine supply. The well-being of millions depends751on it, and I thank you for this opportunity.752    The Chairman. Thank you, Dr. Piervincenzi. Now, we will go753to questions. I will turn it over to Senator Ron Johnson.754    Senator Johnson. Thank you, Mr. Chairman. Thank you for755holding this hearing. This may be the most important hearing of756this Congress, and maybe many Congresses. Now, it is not757getting much attention, but it needs to.758    I first became aware of our vulnerability in February 2020,759my first hearing as Chairman of Homeland Security about the760pandemic, and I had Scott Gottlieb, Judy Gerberding there. I761had no idea that we were so dependent on advanced--or API and762the precursor chemicals on China and India's.763    Have we done anything about it? No. We passed a one and a764quarter-trillion-dollar infrastructure bill and didn't even765address it. I think the issue is how do you bring the766manufacturing back to the U.S. where it can be inspected767properly, right. It is not an easy task, but part of the768problem is the precursors chemicals, that is refining and that769needs permitting.770    That is expensive to do in America, which is why we have771offshored it to China, so you know, how do we do it? What I772like, and this was Mr. Ball's suggestion here, and I would love773to co-sponsor this bill with you, just simply requiring774labeling in terms of where the drug comes from. They are775putting tremendous pressure on the companies to reshore these776things.777    It is not going to happen overnight, but, you know,778Government edicts--you know, spending money to bring, you779know--what you could do potentially is just not tax somebody780who brings a refinery over here, but you got to be able to781permit it. I mean, there is so many impediments to this.782    This is a very complex issue, but we have got to start783doing the basics first. But the first one is, again,784understanding the problem, acknowledging we have it.785Understanding how vulnerable we truly are. You know, things786like Heparin. We have known about this for years and we have787literally done nothing about it.788    Again, I am looking for really the most practical first789steps we can take. I mean, we can talk about all kinds of, you790know, complex solutions but would you agree that just the791labeling itself--I mean, that would be a pretty easy bill to792pass. It will be interesting to see if we could.793    I guess I want from all four of you, what is your number794one single first step that we could take here to address this?795By the way, first it starts with the information, and we need a796lot more information. Again, there is all this--you have all797mentioned the pricing pressure, right. You are all beating up798on drug companies over pricing.799    Well, the fact is, on generics, it is probably underpriced800is what you are telling us. Let's just go down the list and801just give me kind of the one thing that you--you know, the802first step we ought to take.803    Mr. Baker. From my perspective, I think enforcing the804existing laws, as they are already written through the805authority of the FDA and DOJ, would let the good players know806that it is going to be a level playing field for them.807    Senator Johnson. We have laws that are not being enforced.808Why? I mean, how would you enforce them?809    Mr. Baker. It is difficult to enforce them at the moment810because of the issue of drug shortages. When issues are811uncovered at some of these factories, they are allowed to--they812carved out the ability to keep supplying these drugs, because813if they were prevented from entering the U.S., then we would814have a supply chain issue, a shortage issue, so it is going to815have to be weaning off of that situation, but it is going to816have to start with letting everybody know that the laws are817going to be enforced, and it is going to----818    Senator Johnson. You know, one thing Congress relies on is819whistleblowers. I have been trying to pull information out of820Government agencies for many years now. They don't give up821their secrets very well. Will there be whistleblowers that822would tell us of those instances where there is a quality823problem here and FDA just looked the other way? I mean, we are824going to need examples of that.825    Mr. Baker. Absolutely. FDA works with whistleblowers all826over the world pretty much on a daily or a weekly basis.827    Senator Johnson. I guess I would encourage whistleblowers828to come forward to this Committee or Permanent Subcommittee on829Investigations. Tell us your story so we can highlight that, so830we can expose it, so we actually start enforcing our laws. Mr.831Ball, I already used yours, but if you got a better one.832    Dr. Ball. Well, I agree with you, obviously, because it was833something I talked about. It is the only marketplace where834firms do not reveal their quality and consumers that purchase a835product cannot assess it.836    The marketplace is not allowed to work properly for generic837drugs. If quality and location are transparent, the market838would fix, in my view and from research we have done, quite a839bit of the problem. Because market forces would then start to840reward high quality manufacturers and punish low quality ones.841    It is a relatively inexpensive solution because it is--842somewhat the invisible hand of the market would fix this issue843if the market was no longer opaque. When it is opaque, the844market is broken, and we have thought long and hard about other845comparable markets like this, and there are very few.846    I think transparency of both quality and location is the847answer.848    Senator Johnson. I used that when I said it is about849information. The consumers need information which we don't have850right now. Mr. Daniels.851    Mr. Daniels. I think the biggest thing from my perspective852is right now we have economic coercion on the other side that853is keeping these key starting materials in particular at854artificially low prices. That is not actually how much they855cost to manufacture. They are significantly subsidized. They856are in free economic zones.857    In many cases, they are using labor that is insufficient in858order to conduct these operations. There has got to be an859economic disincentive, some sort of ADCVD against the KSMs that860China is dumping into the market in order to create a U.S.861domestic market that is available and viable, and there are862today, whether it is in fermentation for critical key starting863materials for antibiotics or it is for drugs like Heparin,864there are continuous flow manufacturing capabilities that we865could bring to the United States.866    Everyone thinks it is going to take some huge delta between867the current price and the future price to bring investment into868a market. It is not. I mean, you remember in 2008 we had gas869prices spike.870    IKEA brought Swedwood, furniture manufacturing, back to871Danville, North Carolina because of the small additional cost872that sat on the top of every piece of furniture. They brought873their entire manufacturing capability back.874    Senator Johnson. As long as you can permit it.875    Mr. Daniels. Yes, the permitting is a big piece.876    Senator Johnson. I suggest to all of you, help us identify877those drugs or drug that we need to start with. You start with878one, you know, succeed in that and then move forward. Mr.879Piervincenzi, actually--I think I got that right. Close?880    Dr. Piervincenzi. Perfectly. Thank you. I appreciate that.881I would suggest a market based resiliency benchmark, which is a882positive incentive. It would need to be market-based. It would883absolutely require the Government to kick-start it, and this884would reward the resiliency of having a secure facility with885past inspections on a consistent basis.886    All the things we know, and in fact, we created a draft of887these types of benchmarks and just about every factor that was888shared, very much including location of production, your own889supply chain, and from that, even if we were to start, let's890say in hospital systems for hospital use drugs as a starting891point, although I am not saying it is the whole solution, and892then put a hook on that where hospitals have to reward this893through a better contract, a slightly better price.894    These are the cheapest medicines, which means a better895price is still not going to break the bank.896    Senator Johnson. I think hospitals are still going to be897opaque. I think it has got to be consumers, and if you have too898many elements in that benchmark, again, it is going to899difficult to pass. That is why I am kind of looking at how much900just country of origin as a starting point.901    Mr. Chairman, honestly, this is an incredibly important902hearing. I want to work very closely with you and your903witnesses and other experts on this, and we need904whistleblowers.905    The only way this gets passed in Congress is the American906public has to understand how vulnerable we are and what risk907they are at, but thank you for this hearing.908    The Chairman. Thank you. Ranking Member Gillibrand.909    Senator Gillibrand. I would like to turn it over to Senator910Kim.911    Senator Kim. Thank you, Chairman and Ranking Member. I912agree, this is an incredibly important issue, and I hope that913this is something that can spur us to work in a bipartisan way.914    You know, certainly from my State of New Jersey, a lot of915what we need to be thinking about in terms of what comes next916when it comes to medicine, pharmaceuticals, but recognizing917that we need to do a lot more when it come to the manufacturing918and the supply chain side to make us more resilient.919    I think resilient is the right word, because we see not920just with the national security side, but you know, a lot when921it comes to just the economic competitiveness of the United922States and understanding where we need to be going to on a923number of different fronts. I would like to just pick up where924my colleague left off.925    You know, Dr. Piervincenzi, I just wanted to get a little926bit more of a sense of this market-based resilience benchmark I927think you framed. Is there a comparable example or is there928something that is being used in other industries or sectors929that can help us kind of understand how this might come about930and how it might be structured?931    Dr. Piervincenzi. Thank you for that question, and yes, in932fact, you don't have to leave the pharmaceutical industry.933Let's take a sophisticated multinational company, generic or934innovator, they do this themselves on the goods that they935purchase.936    Let's say you are a large innovator pharma company, and you937are looking to ensure that your multi-billion-dollar product is938never short because you have a huge economic incentive to do939so. What you do in your own supply chain is you would never buy940all your key ingredients from one place.941    You will have two sources for every ingredient. In942addition, you will send your team to inspect their facilities943and make sure they meet your own quality standards. You will944create a contract which is a long enough term that the supplier945is committed to you just as you are committed to them.946    This is normal. Everybody does this. This is nothing947innovative. That process I just described, it works. It is why948innovator drugs are not on the shortage list except for unusual949demand spikes, which we know are something entirely different.950    Senator Kim. Then, how do we then take that type of model951though at a societal level? When we are not talking about just952a company looking out for its own bottom line, and in953particular, you know, what is the role of Government? What can954Government do that others can't do so that we can understand955how to fit this all together?956    Dr. Piervincenzi. The key here is that the buyer, in the957case I just described, is one single company with a rational958reason to create a resilient supply.959    The challenge we have in the U.S. is there are thousands960and thousands of buyers who all wish this to be true, don't961feel empowered to do so, and actually don't have the mechanism962to even pay more money because they don't know what they are963paying for.964    Then the answer would have to be both, the creation of the965benchmark, so they no longer have the excuse that they don't966know how to pay for quality, and once you have that, then you967have to create an incentive, or perhaps force, there to be968contracts that reward people from scoring high on those969benchmarks.970    There are different parts of our drug supply which will be971harder in some than others, but we believe that where you see972the most drug shortages today, which are in hospital973administered drugs, is actually probably one of the easier974places for leverage, especially because the Federal Government975has its own leverage for how it purchases medicines, and you976see this in quality of care, the tools that can be used. I am977not saying it is extremely easy, but it is not unprecedented,978even in health care.979    Senator Kim. Thank you for that. Dr. Ball, I wanted to just980pick up on something you said, which is about that quality981assessment and being able to have that alongside the982geographic. Can you give me a better sense of how that quality983assessment could be done at the scale of what we are talking984about here?985    Dr. Ball. Absolutely. The paper I referred to assumes that986the FDA's site selection model scores, which are risk adjusted987scores that the FDA uses both at the drug and plant level to988determine when to inspect a plant, that some form of those989would be amalgamated into a five-star rating on a drug, and990that a five star would be the lowest risk facility, three star991would moderate risk, and that is what we used in this study.992The FDA has this data. They would be very resistant, I believe993from my experience in discussing this with them, to give it out994and use it, but it is at least a starting point, and it is a995combination of adverse events, recalls, inspection scores.996Anything that has happened at the plant or the drug that is a997negative experience creates a higher risk drug and that would998be used to put a score on the label.999    Senator Kim. I see. Mr. Baker, I just want to end with you1000here. You know, in your testimony, you highlighted how FDA1001investigators often have to deal with demanding travel1002schedules and conditions, can fall ill. How, you know, in many1003parts--and many of these inspections are taking place in1004locations where English may not be a primary language spoken,1005yet there is no requirement for independent translators. I1006wanted to just get a little bit more of a sense from you. What1007steps do you think Congress should prioritize to ensure that we1008are giving our FDA workforce the support that they need? Also1009just thinking through, are there other steps like better1010strengthening our collaboration with foreign regulators and1011other steps that we can do to try to address these needs?1012    Mr. Baker. Yes, thanks for that question. I think one of1013the things that can be done is to increase the level of1014investment in the FDA investigators. A lot of disruption1015happened in the FDA during the COVID times where a lot of, for1016example, for onsite training and hands-on training was sort of1017moved to remote, and that isn't as effective. You know, prior1018to that, it would take two or three years to get qualified, so1019to speak, to do a foreign inspection. Whereas now, due to1020resource constraints, you may be tasked with doing those1021inspections, those challenging inspections that you just1022mentioned, in like two months after getting hired. You may not1023have the skills and the training necessary to do those1024effectively. It is very challenging. You will fly into an1025airport and then you get in it--especially if you are trying to1026do it unannounced. You are going to get in a car, taxi, with1027someone you don't know, and drive four to six hours to get to1028your hotel that may or may not air conditioning. It is very1029difficult and challenging. They need additional support to1030really enhance this existing program that they know works.1031Those unannounced inspections have about a four time greater1032chance of identifying a problem that is going to cause harm to1033a human versus an announced. That is what the data shows. They1034are very effective, so investment in that area is worth the1035effort.1036    Senator Kim. Thank you, and with that, I will yield back.1037    The Chairman. Thank you, Senator Kim. Mr. Baker, as a1038former FDA Inspector, are you confident in the quality and1039safety of generic drugs coming from foreign countries like1040China and India?1041    Mr. Baker. Thanks for that question. The answer is going to1042be no. I am not confident about the quality. I am confident in1043the sites that I have been to, and I have seen world-class1044sites everywhere in the world, manufacturing drugs, and I am1045confident in taking those products. But for the majority, I1046would say no.1047    The Chairman. Dr. Ball, what types of adverse events,1048deaths, did you find foreign medications caused in your1049research?1050    Dr. Ball. We found examples of cardiac arrests,1051gastrointestinal hemorrhage, delirium, cellulitis, acidosis.1052Those were just a random sample I took this morning of the1053adverse events in our study. There are millions of adverse1054events that get reported to the FDA's adverse event reporting1055system. These are just a few.1056    They are serious, and in this paper, we only counted those1057adverse events that were caused by the drug, reported by the1058manufacturer, mandatorily reported, and caused serious health1059outcomes, and there is still millions of those.1060    The Chairman. Do you think they might be under-reported?1061    Dr. Ball. I think underreporting is a problem for recalls1062and adverse events, and it leverages a lot of what Peter1063mentioned. The more FDA is present in a facility in an1064unannounced manner, the less likely an un-reporting will go,1065because you can discover unreported events in these1066inspections, but not if they are announced weeks or months in1067advance.1068    Those are exactly the type of things that a firm is likely1069to hide if they have advanced notice. If they don't, it is very1070hard to hide those things. The FDA inspection strategy goes1071hand in hand with reducing these adverse events.1072    The Chairman. Mr. Daniels, how much supply of drugs do we1073have if Communist China shuts supply off to the United States?1074    Mr. Daniels. Thank you for the question, Chairman. The1075supply chains are interwoven, and I think that is the biggest1076issue because you will have specialty pharmaceuticals that are1077untouched for six or nine months.1078    Then when you start to get to the end of that supply chain1079and that manufacturing process, you might have severe runs on1080the key starting materials or the precursors that are necessary1081to support that drug manufacturing.1082    In the context of generics, and specifically critical1083generics like antibiotics, heart medications, insulin, you1084could see all supply outside of what is used in emergency rooms1085shut down within months if China decided to stop supply to the1086United States, especially if they decided to stop supply chains1087on a supply chain like sanction, like we have done on forced1088labor prevention in China.1089    If they stopped the sort of intermediaries from selling us1090the goods that are manufactured utilizing their materials, it1091could be a severe constraint that would look cataclysmic.1092    The Chairman. Dr. Piramvincenzi, USP is a global1093organization with labs and operations abroad. From your1094perspective, are foreign made drugs consistently meeting USP1095standards, or do you see widespread quality failures?1096    Dr. Piervincenzi. Thank you, Senator. I may also just maybe1097build a bit on Mr. Daniel's comment. The quantifying the if1098China were to cutoff supply, what would the impact be is1099challenging, but in the next two months or so, USP will issue a1100report that covers about 90 percent of our generic supply, so1101not all of it, but a vast majority, that will map down to the1102key starting material and location of origin.1103    It will actually be the first time ever I will be able to1104answer it. A rough number though, just because we have to start1105with something. Half our medicines come from India. Seventy or1106eighty percent of their starting materials come from China.1107    You start to do the math, it is not going to be a majority,1108but it is going to be a very large percentage of U.S. medicines1109that would become highly vulnerable. Some completely, but many1110highly, highly disrupted in short.1111    The Chairman. Do you have any feel for how much is in the1112supply chain that is already in the United States? I mean, I1113can't imagine that people that--I used to run a hospital1114company. I don't think we sat there and said, let's have one1115year supply of drugs just in case something happens. Do you1116have any feel for what a typical doctor's office, a group1117purchasing organization, or hospital would have in inventory?1118    Dr. Piervincenzi. At the very end of the supply chain is1119extremely little but if you were to say what is onshore in the1120United States at a distributor and such, of course it varies,1121but it is months, not years, and not weeks--it is months.1122    If you continue down to your starting materials in your1123API, it gets a little longer, and that matters because it makes1124it hard for us to get signals. Something might happen, the1125manufacturer stops producing, and everything seems fine for a1126while. Nine months goes by and suddenly we have a shortage. It1127is not really sudden, but it appears sudden at the end because1128it takes a while for the chain, and since we don't have good1129transparency, we are not watching this happen as it comes1130along.1131    Months is the answer. However, as soon as somebody knows it1132has been cutoff, hoarding behavior begins, and the shortage1133would take a matter of days in real life. In real life, you1134would know if a hurricane hit a plant and everyone knows there1135is a problem, everything would be bought up within hours.1136    The Chairman. Those stores are empty in hours, actually.1137Yes.1138    Dr. Piervincenzi. If nobody knows it happened, of course,1139then it would be months. But odds are it is going to leak,1140right.1141    The Chairman. All right. Let me turn it over to Ranking1142Member Gillibrand.1143    Senator Gillibrand. Thank you. For Mr. Piervincenzi, what1144are the risks of relying solely on the United States for1145production of drugs, and what precautions can we take against1146such risks?1147    Dr. Piervincenzi. Thank you, Senator. One of the four1148drivers of resilience was the geographic concentration. That is1149agnostic to location. There are different issues about quality1150that we are also talking about. Some of the most acute drug1151shortages the U.S. has had in the last few years have been1152actually on the U.S. shores with an unfortunate hurricane and1153other things.1154    Natural disasters--just things can happen, and they do. It1155is possible to create diversification even within the United1156States, as long as you don't have all your plants in one place,1157and so, there is a nuance to this, what geographic diversity1158looks like. If you have two plants in North Carolina across the1159street from each other, I would argue that is not very1160resilient. If one was on the West Coast and one on the East1161Coast, you might be in pretty good shape.1162    Senator Gillibrand. In your testimony, you indicate the1163importance of aligning supply and demand forces so that1164American patients have more predictable, sustainable, and1165quality supply chain. How can the Federal Government promote a1166coordinated effort amongst different stakeholders to move1167toward a resilient supply chain?1168    Dr. Piervincenzi. The simple answer is somebody has to pay1169for it. I think you have heard four different versions of that1170same thing here, is that somebody has to be not just willing1171to, but able to, so a willingness says, I am willing to pay1172$0.13 rather than $0.10 for a pill.1173    Just about everyone is willing to do that. The problem1174today is no one has any evidence of how do I do that? If I can1175pay $0.13 for the same pill, I don't--it doesn't buy me more1176resilience, so this is where a large organization, including--1177very much including the U.S. Government, has that power.1178    To say, for now on, especially for a certain set of drugs1179as we know are vulnerable, we will only pay with resilience.1180Meaning, this is what we expect, and you will get this price.1181The market solution like that means if somebody doesn't meet1182those benchmarks, they will be less preferred, so the market1183can fill in. It won't force it because it is not a binary1184decision.1185    Because margins are so small, just extending--having a1186small, tiny bit paying just a bit more or having a slightly1187longer contract could make an enormous difference. I think that1188is the benefit of this problem, is that it can be solved with1189much less money than if these were expensive medicines.1190    Senator Gillibrand. Mr. Daniels, in your written testimony,1191you recommend the Federal Government conduct regular stress1192tests of the pharmaceutical supply chain to stimulate worst1193case scenarios and identify weak points before failure. Can you1194speak a bit more about how the Federal Government could address1195identified weak points from these stress tests?1196    Mr. Daniels. Absolutely, and thank you, Ranking member1197Gillibrand, so two things. One, just to speak about what Dr.1198Piervincenzi just mentioned. There are multiple ways to reduce1199the cost of these drugs as we reshore them. One of them is also1200relying on the innovation of our allies, right.1201    I mean, there is a global market for pharmaceuticals, and1202as we start to look at that market, we do need to diversify1203both location, but also, we need to diversity end platforms,1204and so, in many cases, there are multiple areas in the supply1205chain where we are advising our customers, which are the1206Fortune 500, we are advising our customers to find two or three1207suppliers downstream to purchase metals, to purchase chemicals,1208to purchase goods from.1209    They can do two things at that point. They can, one,1210utilize their purchasing power to actually reduce the cost of1211the underlying chemicals, precursors, whatever it might be, key1212starting materials. Two, they can give back some of that. Our1213customers, when they do what is called a directed or embedded1214spend program, they typically save between seven to twenty-two1215percent on landed cost on the end goods.1216    They can actually share back some of that to get to a1217resilient supply chain and to get a supplier that is willing to1218agree to ethical quality standards, so these programs exist1219today. They exist in other industries. They are not as common1220in pharmaceutical supply chains, but there are pharma companies1221in Europe that we are working with today that are engaged in1222these activities, and they are doing it specifically to address1223CSDDD.1224    To get to your second question, which is on these stress1225tests. We have been working across a number of different1226federal agencies, DLA, FDA, to map the 227 critical medicines1227within our supply chains and to understand what are the1228consequences of whether it is disruption, like the hurricane1229which knocked out our IV fluids capacity in the United States,1230or it is major shortages in war gaming due to conflicts with1231near peer adversaries, or if it is due to significant changes1232in availability of underlying materials. When we are doing this1233analysis, it is simple supply chain planning.1234    Companies do this all the time. Now, what we have to do is1235we have to work probably across a consortium with companies1236like Exiger and Pharmacopeia to create a complete view of the1237supply chain, and that complete view the supply chain doesn't1238stop at sort of the specialty pharma or the innovative pharma1239company or the generic pharma companies and their suppliers.1240    It has to go all the way down, and what we have to see is1241that reverberating impact. Because Dr. Piervincenzi said, it is1242true that many companies have 15 suppliers of the same product1243at that next year, and then they have four suppliers at the1244next year, and then it goes back to one.1245    Just no one knows it. That is what happened with1246ventilators during the COVID-19 pandemic. All of our solenoid1247valves went back to one company in Italy, and so, even though1248Ford and GM and everybody stood up to make more ventilators, we1249couldn't truly make more because there was only one company1250that had that solenoids valve for the commodity ventilators.1251    We actually have to make sure that mapping is complete, and1252then we have to makes sure that we are assessing all of the1253risks that can actually impact to that environment, whether it1254is geopolitical, it is natural disasters, or it is material1255shortages.1256    The Chairman. Thank you. Senator McCormick.1257    Senator McCormick. Thank you all for being here. Mr. Baker,1258can you describe what level of transparency already exists for1259American health care consumers with regard to what country a1260medicine or its APIs are from, and what improvements could be1261made to ensure Americans have better insight and understanding1262on the origins of their medicines?1263    Mr. Baker. Yes. At the moment the transparency in the1264supply chain, as far as patients know about where their1265medications are made, is virtually nonexistent. There could be1266some improvements in the labeling. It is a complicated issue,1267because there is many players in the supply chain as outlined1268already, from the key starting materials all the way to the1269finished drug.1270    We would have to take a risk-based approach, where the most1271critical step--like for example if it is an aseptically filled1272product that is intended for injection, the step in a supply1273chain at which that product was aseptically filled in a sterile1274environment would be on the label.1275    It is not a perfect solution, but it is the best we can do1276to help increase transparency and let the market fix the issues1277as already outlined by my colleagues.1278    Senator McCormick. Thank you. Mr. Daniels, how can1279technology and AI be deployed for hospitals and others to map1280their supply chains? I know you touched on this at some level,1281and what can be done to advance any reshoring or near-shoring1282of drugs and APIs?1283    Mr. Daniels. Thank you, Senator McCormick, for the1284question, so first, hospitals are mapping their supply chains.1285We work with multiple hospitals across the United States to map1286their supply chains.1287    They also, in large part, go back to large distributors,1288right, that are intermediaries between those hospitals and the1289actual drug manufacturers or medical device manufacturers or1290PPE manufacturers. The key first step is to use artificial1291intelligence to actually break down that bill of material of1292each of those pharmaceuticals and then tie those back to the1293literal suppliers that those pharmaceutical are coming from.s1294    The thing is, you can't just map the products you are1295buying. You should be mapping the products you are not buying,1296and what I mean by that is, you should be--you should1297understand the spectrum or the panoply of alternative suppliers1298that you have available to you prior to a major disaster--the1299customers of ours--we are endorsed by the American Hospital1300Association as the key risk management technology company for1301all U.S. hospitals.1302    The customers of ours that had our software deployed knew1303almost a month in advance that IV fluids would be subject to1304disruption due to Hurricane Helene, and so, that kind of1305visibility, of course, it can lead to the stockpiling point1306that we just made, but it also can save American lives,1307especially in operating rooms.1308    The second question you had was on the reshoring. I mean,1309first, Senator Johnson brought up this point. One of the1310biggest issues we have is permitting. We have a huge backlog1311and delays in permitting of new facilities and capabilities.1312The other thing is a lot of this stuff is pretty dirty to make.1313    Acetaminophen, just taking as an example, creates a waste1314broth that the EPA would not allow us to dispose of in the way1315that India or China does today. One of the things that we have1316to look at is that there are novel ways to actually manufacture1317these. These aren't novel ways that are not taken to scale yet1318through BARDA and multiple other programs that are looking for1319advanced research and development capabilities in emerging1320biotechnology.1321    In BARDA, we have actually taken some of the continuous1322flow manufacturing capabilities to scale, so first, if we can1323permit, we can actually make it cost effective, and then the1324second thing is, with AI and automation in the actual1325manufacturing line, we take away the single and only1326differentiation between us and emerging markets in1327manufacturing pharmaceuticals at scale, which is labor1328arbitrage.1329    Implementing AI and automation inside of the pharmaceutical1330manufacturing process--I mean, there are places in North Texas1331that are cheaper than places in Shenzhen, right. We can start1332building these factories and actually start, you know,1333competing on a global basis.1334    Senator McCormick. Thank you. Mr. Chairman, Ranking Member,1335thank you for having this hearing. Great, great topic. Thank1336you.1337    The Chairman. Senator Alsobrooks.1338    Senator Alsobrooks. Thank you. Thank you so much, Chair1339Scott. Thank you so much, Ranking Member Gillibrand, for1340hosting today's hearing, and thank you so much as well to our1341witnesses for being here.1342    What we know is far too many seniors still face the cruel1343reality of needing medication that they can't reliably access1344or afford. High drug prices, unexpected shortages, and now1345Secretary Kennedy's policies are preventing Americans from1346accessing the medicine and vaccines that will keep them safe1347and healthy. This couldn't be a more relevant topic.1348    In the past few weeks, I have heard from my constituents,1349so many seniors across our state who are eligible for the1350latest COVID vaccine, and they are now being turned away1351because of the confusion caused by Secretary Kennedy's new1352guidelines, and others are being told that their local pharmacy1353is struggling to stock the vaccine because of a lag between FDA1354approval and the forthcoming recommendations from the Advisory1355Committee on Immunization Practices.1356    When it comes to vaccines, we know that so much doubt is1357being cast on life-saving vaccines, as well as dismantling our1358public health infrastructure, and that is why this conversation1359is so critical. Seniors deserve not just reliable medications,1360but a health system that they can trust to put science and1361safety above politics. My first question is for Dr.1362Piervincenzi.1363    I would like to ask you, when we see how fragile our drug1364supply chains can be when it comes to medicines that seniors1365rely on, and vaccines we know are no different, this is a time,1366as I have mentioned, when Secretary Kennedy, I believe, is1367really destabilizing public trust in vaccines.1368    Older Americans can't afford disruptions to flu, RSV, or1369COVID. I would like to know, how has the confusion regarding1370vaccine approvals and recommendations this year made seniors1371across the country less safe?1372    Dr. Piervincenzi. Thank you, Senator. An interesting fact1373on the vaccines, as compared to many of the low-cost generics,1374there are quite a few manufactured in the United States.1375    If you consider United States, Europe, Canada, there is a1376disproportionately high quantity, so there is the ability for1377FDA to do more robust inspections, including surprise for1378majority of vaccine sites, and so, the public should have more1379confidence, if anything, that they are able to rely on the1380quality of the vaccines. As a complex biologic, there are1381linkages to the complex generics that are the ones showing up1382on the shortage lists the most.1383    Because they are the kind of medicines used in hospitals,1384just for that reason alone, they are impacting two groups the1385most--the most senior, especially in oncology, and the1386youngest, the pediatric population. Also tending to be oncology1387but not only, and these two populations have been most1388affected. There is an extra layer to this problem is that these1389are the medicines that are least substitutable--it is an art1390form to try to treat these cancers.1391    We haven't cured cancer, so the best we can do is slow it1392down in many cases. But a small change from one chemotherapy to1393another and the progression advances, it is the person's life1394that is at stake, so the vulnerability isn't just about the1395medicine, but about the patient and essentially what the next1396best alternative is.1397    From a quality standpoint, items like vaccines are very1398different because they are given, of course, to a healthy1399patient, so you are measuring it in two very different ways.1400However, a poor quality vaccine, you are only going to test1401that perhaps 30 or 40 years later when you are exposed to a1402disease.1403    You think about when you need to rely on quality, I can't1404think of a medicine more important than vaccines. Thank you.1405    Senator Alsobrooks. Thank you. Now, I have one other1406question regarding--or two actually. The next question is1407regarding transparency, and what we know is for seniors in1408particular, and this is for any witness, it is not just about1409how the drug or where the drug is manufactured, but it is1410whether or not they can trust that what is in their pill bottle1411is safe, effective, and available when they need it.1412    Too often our system reacts after a crisis, instead of1413putting preventive measures in place, leaving seniors and their1414caregivers to find out too late that their medication is1415suddenly unavailable.1416    How should we be thinking about transparency, not just as a1417tool for regulators and industry, but as a preventive measure1418that empowers patients, especially seniors, to make informed1419choices about their medications and avoid being blindsided by1420shortages? That is for any witness.1421    Dr. Piervincenzi. I will be brief to allow others time as1422well. I would emphasize pharmacy, if I might, so there is a big1423gap to the patient in knowledge and understanding, but we have1424an army of hundreds of thousands of health care practitioners1425called pharmacists out across our country who are unusually1426close to patients, have access on essentially a prescription by1427prescription basis.1428    That is a huge positive. There is an opportunity to have1429them play a more active role when it comes to supply chain and1430quality. It is not typically a topic that they touch. I think1431if we want to be able to help empower patients, we are going to1432have to solve this through partnership with pharmacy and1433pharmacy organizations that I know are very open and willing to1434have this conversation. Thank you.1435    Senator Alsobrooks. Thank you.1436    Dr. Ball. Thank you for the question on transparency, so1437this is something I have spent a lot of time working on, and1438when our paper that I talked about in my introduction got1439published, our author team started getting random emails from1440the public, scared emails about how can I find out where my1441drug is made?1442    We know know how to figure this out, so this is something1443that we were able to do in this study we published, but it is1444very difficult, and this is why we advocate for forcing firms1445to put the country, the location on the label so that it is1446transparent for everyone. We have developed a website that we1447are hoping to launch where you can type in a national drug code1448number and a flag will pop up to tell the consumer this is1449where it is made.1450    Even developing that website by this author team that we1451worked on this paper has been very hard for us because it is a1452difficult step to go from a national code, which is on every1453drug label, to a country manufacturer, which is very hard to1454find out.1455    Senator Alsobrooks. Thank you.1456    The Chairman. Thank you, Senator Alsobrooks. Mr. Baker, in1457your testimony, you mentioned that Indian generic drug1458manufacturers using fake labs to pump out fake results to show1459a product was never tested. Can you talk us through what is1460supposed to be happening, and what you found and how you found1461it?1462    Mr. Baker. Thanks for the question. Yes, what is supposed1463to be happening is that the FDA publishes manufacturing1464standards and the Code of Federal Regulations that they are1465supposed to follow says when you test something, for example,1466you are supposed report all the results that you generate.1467    You can't just pick one or two that you like and then use1468that as the data to release the product. That is what is1469supposed to happen. What we found when we started the1470unannounced inspection pilot back in 2012 and 2013 is that1471those standards aren't being always followed. Some players are1472following those standards, but some aren't.1473    It is difficult because the ones that want to follow the1474rules oftentimes won't be able to win a contract to ship those1475products to the U.S. because they can't compete with the folks1476that aren't actually testing it. Because as already mentioned,1477it does cost a few more cents to do it right, but not a lot.1478That makes a difference when the margins are so small.1479    The Chairman. Mr. Baker, in the book, A Bottle of Lies, it1480talks about how foreign companies plan guided tours, but you1481rejected that, instead wanting to go directly to the quality1482control labs. Can you talk about your experiences with foreign1483companies? Why did they start with the tour?1484    Why did you decide to change things up and go directly to1485quality control instead? How has that changed the inspection1486process? Were you the only one doing that? Do other inspectors1487do similar things?1488    Mr. Baker. I remember the moment that we decided to focus1489on the unannounced inspection pilot, and, you know, I had been1490trained to do inspections here in the U.S., and we did those1491before I got deployed into New Delhi.1492    Fraud happens here, too, but it is much more limited, like1493one person or a small group. I remember that moment being over1494there, and I was with a co-inspector, and I just remember like1495we looked at each other and we thought, actually, this is--1496everybody is involved in this. It is not just a single person1497or a small group. It comes from the top down, and it was kind1498of like an aha moment.1499    It is like, have we got to do something about this. We went1500back and worked with folks at the embassy to develop ways where1501we could gain further insight into what is actually happening,1502and that involved showing up unannounced, which hadn't been1503done prior to that.1504    We would arrive unannounced, and we would skip the1505conference room presentation and go straight to the lab, and1506what we found, like for example, I can think of one that really1507just sticks out, one of the larger aseptically filling sites in1508the entire world. I mean, some of these are the size of a small1509town, and instead of going to the conference room, we went1510straight to the microbiology laboratory where they do the1511sterility testing. I mean this is a life or death test.1512    We walked in and there was only one microbiologist on1513staff. That was unusual, right. We walked into the chambers1514where they are supposed to be testing all these products, and1515they were all there, but they were all unlabeled, and so, we1516are like, well, where is the sample number on all these samples1517that you are supposed to be testing?1518    All the paperwork was completed, you know, no growth, no1519growth, it is sterile, it is sterile, but in reality, none of1520the products were getting tested, and once we sort of caught on1521that this was happening, that program expanded and continues to1522today, and again, like I mentioned, when those inspections are1523performed, they result in an ability to find those problems1524that are causing these adverse events.1525    About 40 percent of the time we find issues. Whereas on an1526announced inspection, where we show up and the dog and pony1527show continues, that is about a five to ten percent chance of1528finding those problems, because it is so much more difficult.1529    We don't do announced inspections in the U.S. Why would you1530do that? You show up unannounced and you want to see what is1531the real quality of the product. You know, this is shown that1532maybe the playing field isn't so level.1533    The Chairman. You mentioned that the bad players list is no1534secret, and these bad companies continue to avoid any1535significant consequences. That is telling me that the FDA knows1536which are the problem companies, but they aren't being1537inspected frequently enough or are still being allowed to1538import drugs. Does the FDA have a list of bad companies? What1539consequences should these companies be facing?1540    Mr. Baker. Yes, that list exists. Yes, I mean, I could just1541look into the data base and see if which--if I was going to1542fill a prescription, which provider I would like to choose, and1543I will do that pharmacy hopping to find it, and--sorry, what1544was the second part of your question?1545    The Chairman. Well, what consequences should they--?1546    Mr. Baker. Oh, yes. The consequences should be, if you are1547caught breaking the law, you know, as outlined in the1548regulations, you should be prevented from shipping products to1549the United States.1550    The Chairman. They have got a list----1551    Mr. Baker. Yes.1552    The Chairman. There is no consequences.1553    Mr. Baker. Very little consequences. When the FDA takes1554action, what they will do is they will just shift those1555products to another facility in their network, and so, it is1556this cat and mouse game, right.1557    Then this facility gets shut down, so now they are shipping1558out of this one. Then FDA goes over here, but by this time--by1559that time, this one is already back in the market, you know,1560because they will go back two years later.1561    It will sometimes be an announced inspection and the game1562resets. It is just I go here, I go here, and so, you know, just1563enforcing the law and saying, if you break the laws, you are1564not going to be allowed to participate, could go a long way.1565    The Chairman. Then we put that in our bodies.1566    Mr. Baker. That is correct, yes.1567    The Chairman. Ranking Member.1568    Senator Gillibrand. Very depressing. Dr. Ball, you have1569studied the impact of five-star quality ratings and country of1570origin labeling on consumer choice. As you know, not everybody1571has the skill set that Mr. Baker described of being able to1572know which vendor is actually safe.1573    Patients don't have much choice in choosing which medicines1574their pharmacies or hospitals or nursing homes choose to stock,1575and they arguably don't have the level of sophistication they1576would need to be able to choose anyway. In hospitals and some1577nursing homes, patients may not have access to containers where1578the five-star quality rating or country of origin labels would1579be placed.1580    How can a five-star quality rating system and country of1581origin label promote the use of high-quality drugs when1582patients often don't have much choice? How can this proposal1583incentivize hospitals and other purchasers to purchase high-1584quality drugs when institutions often face pressures to keep1585costs low?1586    Third, how would you recommend that the FDA conduct1587inspections and update their five-star quality ratings?1588    Dr. Ball. Thank you Senator for the great questions. Our1589solution that we have tested in our paper is a first step. The1590first step is--and I have had my parents and elderly family1591members ask me, how do I know where this drug is made and if it1592is safe. If you arm the person at the pharmacy desk or the1593patient to look at a bottle and say, now, why is this a three-1594star drug?1595    That question in and of itself could make a big difference1596because groups like the AARP could all of a sudden have a voice1597to say, why are we selling three-star or two-star drugs to our1598constituents? You are correct that it wouldn't fix everything1599overnight. That hospitals, when they buy it in group packaging,1600may not have the stars on them until the solution get properly1601fixed there. That group purchasing organizations may be less1602sensitive.1603    The notion is that if it becomes transparent for every1604level of the supply chain, the manufacturers are no longer able1605to hide, and they have to somehow figure out a way to compete1606on quality.1607    It wouldn't fix the problem overnight, but it would also1608allow group purchasing organizations who change suppliers based1609on pennies, which is often the case that we hear in our1610research, to look at this and say, yes, we may save a penny,1611but this is going from a three star drug to a two star drug.1612    That has consequences for the people that are in the1613insurance program that they serve, or the elderly person that1614picks it up at CVS and asks their pharmacist, why are you1615giving me a two-star drug? That conversation is the starting1616point to put pressure on firms. It is not perfect, but it is1617the beginning, and it is much better than what we have now.1618    Senator Gillibrand. Thank you. Mr. Baker, off of Dr. Ball's1619answers, how should country of origin labeling be implemented1620to take into account the origins of a generic drug's components1621versus the manufacturing site of the generic in its final form?1622    Mr. Baker. Yes, I have been thinking a lot about that1623because over the years, having seen the sites and thinking1624about transparency, that this would eventually come based on1625what we were uncovering.1626    There is no real perfect solution, but there are some--for1627each different type of drug, if you are talking about a solid1628oral product or an injectable product, there are--at least one1629step that is very critical to quality, for the purity and in1630some cases, sterility.1631    Putting that on the label would force companies to take1632that step seriously, and also possibly diversify supply chain1633for those critical steps to have those in areas that are1634reliable, and so, for example, an aseptically filled product,1635where is that bottle being filled? Because that is, again--1636there are other players, but that one is the most critical.1637    Senator Gillibrand. Dr. Piervincenzi, your written1638testimony indicated the United States relies heavily on Indian1639and China, and I think the chairman's questions about those two1640countries have been very insightful.1641    The majority of these KSMs are produced in China. You also1642highlighted how one KSM, thymidine, is produced only in China.1643Can you speak to why the United State is currently unable to1644produce certain key starting materials, beyond the1645environmental impacts of the manufacturing process?1646    Dr. Piervincenzi. Yes, so thank you, Senator. The key1647starting material is a fancy term, I think Senator Scott you1648sort of said this earlier, that is only relevant to its use in1649a pharmaceutical arena.1650    What the rest of the world will call them is chemicals.1651They are chemicals. The chemical industry left the U.S., for1652the most part, a long time ago, before pharma. In fact, that is1653how pharma started in the U.S. It followed the chemical1654industry in New Jersey--it became pharma.1655    There is no mystery as to why it left the U.S.--for1656environmental reasons and just cost and all the reasons we1657know. There is something unique about medicines is that they1658are very light users of very expensive chemicals. What I mean1659is--and many of the chemicals used in drugs are used for lots1660of other industrial and other purposes, but in much, much1661larger quantities.1662    That the chemical company--so they are very rarely to have1663a key starting material company, because most of them are1664chemical companies who sell some key starting materials. They1665therefore are a small portion of their business.1666    This further complicates the supply chain, because later1667on--we are talking about medicines all the way along, API,1668finished dose, regulated by FDA, but these chemical companies,1669they are not even in the medical business, so the incentive or1670to think about how do we secure our key starting materials, it1671is not only in the area of greatest risk.1672    It is what we least have in the U.S., or even among U.S.'s1673allies. It is also the hardest of the three pieces to solve,1674and we think we have to look at the KSM model, your chemicals,1675and think, well, how do we start to source it? Where else in1676the world--I think we need to be more flexible about the world1677and think about it.1678    We may consider more onshoring on API, but we have to be1679pretty flexible on the key starting materials, but the current1680model is unsustainable, but we will have some real numbers in a1681couple of months. I think it is about even less than two months1682where we can start to look at them as tangible.1683    Senator Scott, to your point earlier, we have to be able to1684have some data. Otherwise, it is very hard to get action going,1685and hopefully, this will be the first time we have data on1686specifically what key starting materials, where, and then we1687have the very important next conversation, is how else can we1688make them.1689    Maybe just to wrap up there, but there are some cases we1690can make them a different way that doesn't follow the chemical1691industry but uses biotech processes, and that we could do in1692the U.S.1693    Senator Gillibrand. That is good. Thank you, Mr. Chairman.1694Great hearing.1695    The Chairman. Mr. Baker, you highlighted the story of your1696grandmother. What was your experience pharmacy shopping? How1697many pharmacies did you visit? Did you find that they had the1698same drug from the same company? Was there diversity in1699manufacturers?1700    Mr. Baker. Yes, I come from a pretty small town in Oregon1701called Lebanon, and there is about three pharmacies in the1702area, and so, we went to all three, and each one actually had1703the same product by the same manufacturer, so we reluctantly1704made that choice, and I felt bad because already then--at the1705first pharmacy, I had already sort of hinted that this was not1706going to go well, and so, you know, it is an experience that is1707going to stay with me for the rest of my life because it1708shouldn't be like that. I think we can do better.1709    The Chairman. How would you feel buying a drug from a1710company that just settled with the DOJ for faking lab data?1711    Mr. Baker. Yes, it was a tough decision, and again, as I1712mentioned, trying to stay positive is the one thing because you1713don't want to cause unnecessary panic in someone, and, you1714know, a lot of people ask me before they will take it. They1715will give me a call or send me an email, like, hey, what do you1716think about this one?1717    I will give them advice, and to be honest, over the years,1718sometimes I have to fake that advice because I know there is no1719alternative, and I will have to just send a positive email when1720in fact inside I know that that is not the truth.1721    The Chairman. How do you do it when you buy drugs for1722yourself?1723    Mr. Baker. For myself, I would do the same thing. I live1724now in Austin, so I have more choices there and try to do my1725best to shop around or even consider like an online pharmacy if1726I can call them and find out where--you know, what manufacturer1727they are going to use to fill that prescription.1728    The Chairman. Do you believe Americans are dying because of1729poor oversight done at foreign generic drug manufacturing1730facilities?1731    Mr. Baker. Not poor oversight, but poor enforcement, but1732again, it is complicated to enforce because of the drug1733shortage issue. Again, it is not one person or one1734organization's fault. It is just--it is the system.1735    The Chairman. Why did the FDA set up this foreign1736surveillance system the way they did?1737    Mr. Baker. It was a collaboration with embassy, and FDA,1738and folks at HHS to sort of evaluate--to tell the story. You1739know, what we were finding in our initial times when those1740foreign--you mentioned Heparin earlier.1741    That was the reason, one of the reasons, but I think the1742main one why the foreign offices were established in strategic1743locations around the world was to be that sort of rapid1744response and gain further insight into what was happening with1745our supply chain. I think, you know, 15 years later, the1746picture is pretty clear.1747    The Chairman. Dr. Ball, so what causes--if they are all FDA1748approved, what are some of the things that causes one to be1749different than the other one?1750    Dr. Ball. I think the notion that if it has the same active1751pharmaceutical ingredient dosage form and route of1752administration, which is kind of what a generic equates to an1753original, if you match those, the drug will work. That1754discounts all of the manufacturing influence on quality.1755    These are subtle changes, and my intuition is that they are1756often not on purpose. If I was in a market where I was only1757competing on cost, I would find the very cheapest place to make1758my product, the cheapest labor, the cheapest equipment, the1759cheapest suppliers. It is the rational thing to do.1760    When Peter says it is the system, it truly is, because I1761believe these manufacturers are acting very rationally. If you1762cannot judge quality and it is opaque, cost is the only thing1763that matters, that will inevitably reduce quality. It actually1764must. It is like a scientific fact.1765    If you cut the corner in every part of making a product, if1766quality doesn't suffer, something is wrong. You haven't cut1767corners enough, so quality will suffer eventually. It is in1768every aspect of the supply chain.1769    The Chairman. Mr. Baker, when you did a foreign site1770inspection, did the FDA or the foreign facility pay for your1771translator? Is that a problem either way?1772    Mr. Baker. Yes, so in my experience, most of the1773translation is provided by the sales department within that1774company, who oftentimes has the best English because of their1775job. They don't know much about manufacturing, but they know1776they are supposed to tell the story well. That is oftentimes1777what I experienced.1778    Luckily for me, I had studied Mandarin for about 15 years1779prior to going to China, so I could sort of overcome those1780challenges, but yes, that is the norm. Not always. Sometimes1781they will provide an independent translator, but it is1782voluntary.1783    The Chairman. Mr. Baker, when you went to China, did they1784let you just go anywhere you want?1785    Mr. Baker. Yes.1786    The Chairman. You could go, but the Government would let1787you go anywhere, and you could walk in any facility--and you1788can walk around any facility you wanted?1789    Mr. Baker. Oh, yes. Yes, we had a very good working1790relationship with what they would call CFDA at that time, and1791they would shadow us on a lot of our inspections to learn our1792techniques.1793    The Chairman. Why would they shadow you?1794    Mr. Baker. To learn how we uncovered the issues that we1795were finding using forensic computer inspection techniques,1796things like that.1797    The Chairman. What would be--what would--give me an example1798of a facility that you were most disappointed.1799    Mr. Baker. Most disappointed, I think, are the ones where--1800there is multiple, but you would show up at the show--I1801mentioned this in the five-minute testimony where you would up1802at show facility. This is the clean one. We knew, like showing1803up, you knew that there is no way they are making the amount of1804products that I can see on the customs import list, right.1805    There is just no way, and so, what you will do is you will1806try to find--you will show up midnight and just watch1807operations, you know, from the outside and try to out what is1808going on, and then you will eventually uncover like a shadow1809facility. It could be like next door, or it can be somewhere1810else you will watch trucks come in, right.1811    When you find that shadow facility, that is I think one of1812the most concerning things because those are totally off the1813radar. I mentioned the problems with announced inspections, but1814just exponentially worse when you don't do any inspections1815there, and so, that is the--and I think when we were there we1816probably figured that 10 percent of the API getting exported to1817the U.S. was from shadow facilities.1818    I have no data to support that. That was just a rough1819number that we sort of came up with, and compounding pharmacies1820are really suffering as a result of this because they are1821importing products, and they really don't have any ability to1822determine where they are coming from.1823    The Chairman. How long could the facility that was doing1824the wrong thing stay in business before they are shut down?1825    Mr. Baker. A long time, especially if they had any drug1826that was on the shortage list, and so, you could prevent some1827of their products from reaching the U.S., but they would1828continue to ship a couple that we called them carve-outs,1829right, because we just couldn't prevent the supply, and then1830they will ask for a re-inspection in about one to two years.1831    It will--FDA will go back, and oftentimes that will be1832announced because it is resource intensive to do unannounced1833all the time, and then that would be a choreographed inspection1834and the clock resets. They can hang on for years because we are1835addicted to these sites.1836    The Chairman. Dr. Ball, you reviewed adverse event data1837that the FDA had cross-referenced to drugs made in India,1838right?1839    Dr. Ball. Correct.1840    The Chairman. Okay. Where does the adverse event data come1841from? What did you consider to be an adverse event? What1842conditions were eliminated as an adverse event?1843    Dr. Ball. An adverse event--we used FDA's FAERS data base,1844and they make the determination. The manufacturer must report1845an event that occurs, that they hear about, where a consumer1846was injured, hospitalized, or died because of a drug, and then1847through the FDA's analysis of these adverse events, there are1848flags that are put on to the adverse event. Things like a drug1849characterization field.1850    That field means that the drug is the likely cause of the1851event, and a de-challenged field. The de-challenged field means1852that if the patient was taken off the drug, the problem that is1853discovered went away.1854    We tested just the de-challenged drugs, which was very1855convincing for us as an author team, we are really onto1856something here because our effects still hold on the de-1857challenged drugs on those that cause death, hospitalization, or1858injury. To answer your very first question, the firm must1859report it when they hear about it. It is mandatory.1860    The Chairman. The firm, who is that?1861    Dr. Ball. The manufacturer. The manufacturer hears about1862adverse events from patients, from physicians, from lawyers.1863    The Chairman. There is no obligation that a patient says1864it?1865    Dr. Ball. Correct.1866    The Chairman. There is no obligation to the hospital, and1867there is no obligations that a doctor?1868    Dr. Ball. Correct. In the order you just gave though, the1869nurses and physicians are much more attuned to how the system1870works than patients, and so, from our experience, like1871physicians and hospitals know that this FAERS data base is1872there and that they need to report what they have found, but1873there is no obligation.1874    There is a selection bias there. It must be under-reported.1875It has to be because it is not forced, but this does come back1876to the FDA's enforcement authority because these reports come1877into firms, and these firms maintain complaint data bases.1878    When you can access those complaint data bases on an1879unannounced inspection, you are going to get a real honest look1880into how the quality of the firm is operating, versus if you1881give them even a week's notice, the look may not be the same.1882    The Chairman. How many--what is the total list of adverse1883reactions? Do you have a list of how many?1884    Dr. Ball. I can get that to you. It is incredibly long.1885    The Chairman. A half a million?1886    Dr. Ball. I know it is in the thousands. It is a very long1887list.1888    The Chairman. Why do you think it is different in the1889United States if it is manufactured in the United States versus1890India or China?1891    Dr. Ball. This is speculation somewhat because in the study1892we were not able to get at that core mechanism.1893    Theoretically it makes a lot of logical sense that when you1894source a product in the lowest cost place where you are1895furthest from the regulator, the temptation to cut corners that1896will affect quality just goes up and up, and then to accentuate1897that temptation, if quality is assumed to be high, as soon as1898you get FDA approval, you have that stamp of approval, you no1899longer have to worry about quality.1900    The difference I think lies in the fact that in the United1901States, you are much closer to the FDA, their authority is much1902more felt, and the costs of the suppliers and the raw1903materials, they are more, and as soon you get that far away,1904the FDA's authority is more distant and the cost of everything1905is lower, and that lower cost will come through in lower1906quality.1907    The Chairman. You don't have oversight.1908    Dr. Ball. The oversight is much more distant. It is much1909more distant. I don't envy the FDA. It is much harder to1910enforce their standards there.1911    The Chairman. If I understand correctly, according to your1912study, generic drugs manufactured in India have a 54 percent1913higher chance of an adverse event, which hospitalization,1914disability, and death compared, to similar drug made in the1915U.S., right?1916    Dr. Ball. It is more precise to say that the predicted1917number of serious adverse events for older generic drugs made1918in India (those generics that have been on the market for eight1919years or more) is more than 54 percent higher than the number1920of serious adverse events for equivalent, older generic drugs1921made in the U.S.1922    The Chairman. Let's say you are going to buy two of1923anything. Let's say, you are going to buy two cars. If you knew1924if you bought one of them, you bought like one car, you had a192554 percent chance of something bad happening to you, so, what1926would you do?1927    Dr. Ball. Well, because cars have quality ratings, like1928J.D. Powers, I would buy the higher quality rated car, but that1929can't be done in drugs, but if I knew the difference, then I1930would spend the money to buy the higher quality product.1931    The Chairman. You think the National Highway Traffic Safety1932Administration would let a car that was 54 percent more1933dangerous on the road?1934    Dr. Ball. See, and the regulator--NHTSA doesn't have to1935worry too much about that because car quality is accessible to1936the consumer before they buy it, and that is the difference1937between that and the pharmaceutical industry.1938    It is inaccessible before you buy it and oftentimes even1939after you buy. This adverse event increase is hidden in1940millions of adverse events. That is what makes studies like1941this so difficult. There is so many data points that it is easy1942for these types of increases to hide.1943    The Chairman. What was the FDA's reaction to your study?1944    Dr. Ball. While I have worked with the FDA before, since we1945published that paper, I have not had a lot of interaction with1946the FDA, and in the last several months, some of my contacts1947have left, and so, I don't honestly know what the FDA's1948reaction is.1949    The Chairman. Did your studies show a difference in quality1950between generic drugs made in developed nations like Canada or1951the EU compared to India?1952    Dr. Ball. There is an overall difference between emerging1953economies and advanced economies, but when we took that1954difference and we broke it out by country, the only country1955that showed a difference was India to U.S.1956    No, there wasn't a difference between U.S and Canada.1957However, the volume of drugs in our study was overwhelmingly1958advanced economy drugs were U.S., and overwhelmingly emerging1959economy drugs are India.1960    The volume helped make the difference findable, but it was1961something that we didn't see when we compared like us to Canada1962for instance.1963    The Chairman. What was the landscape of generic drugs that1964you looked at? Did you limit it to sterile injectables, or did1965you try to look at everything?1966    Dr. Ball. We looked at everything that we could get label1967data on.1968    The Chairman. Statins, antibodies--antibiotics, and blood1969pressure medicine?1970    Dr. Ball. All of those. Everything that had a label on the1971data base we used, we measured it.1972    The Chairman. Why do you think the FDA doesn't put in,1973require, you know, country of origin of ingredients and country1974of origins of manufacturing? Why don't they do it?1975    Dr. Ball. This is speculation, of course, but I believe1976that there is a few reasons. I have heard that through some of1977our discussions with them that if they were to put quality or1978country labeling, it could cause some unexpected market1979reactions. It could cause shortages, for instance, because if1980you look at a drug and there is----1981    The Chairman. People might buy American first?1982    Dr. Ball. If the supply isn't there, then all of a sudden1983we have overnight shortages because we have made the market1984transparent. That is one of the concerns I have heard. The1985other is that I believe, and this is speculation, that the FDA1986doesn't think they have the authority to force the manufacturer1987to put the country on there.1988    They believe that is company confidential information, and1989then the quality rating is something that we have taken from1990data that they possess, and we have come up with a measure that1991we believe they could translate it to, but it is not something1992that is immediately available right now.1993    The Chairman. Mr. Daniels, I think you said that challenge1994supplies about 90 percent of antibiotic APIs consumed in the1995U.S. Can you talk about how you figured this out?1996    Mr. Daniels. Yes. What we found was that 90 percent of the1997antibiotic APIs used by India, and India being the vast1998majority of the generic antibiotics that we were getting, were1999manufactured in China, and the way that we mapped this, we took2000every single, critical medicine that we had in our study. We2001built a bill of materials for each of them.2002    Every single component of that pharmaceutical, of that2003drug, and what we did was we, once we had that bill of2004material, we identified each supplier, each supplier that was2005connected to every single one of those components. Once we2006identified the supplier, we knew how much of the active2007ingredient was in every dose, and we could see the doses that2008were being consumed in the United States.2009    We mapped that up to supplier capacity, supplier volumes2010coming into those companies, which we have proprietary data and2011customs, trade, shipping, invoicing data that informs us as to2012what is happening between those two companies, and we can see2013where the next company was sourcing their key starting2014materials, excipients, whatever it might have been, at that2015next level.2016    We just kept tracing down the line to the facility, so we2017knew which facility was actually producing which chemical2018compounds. Once we got down to that facility, we cross-2019referenced the data that we had pulled through with their2020certification levels, their employee information, their square2021footage to ensure that that capacity was visible and to2022identify things like shadow facilities, which there certainly2023is a significant volume of that kind of product coming through.2024    Then we rolled that all the way back up to the supply chain2025and identified that essentially these manufacturers in India2026were using this significant cost differential between the2027locally made goods and what was being made in China and were2028utilizing that to accelerate and to expand margins and the2029goods being sent to the United States.2030    The Chairman. Are there other drugs that you are aware of2031that we have such acute dependency on, on Communist China or2032another adversarial country?2033    Mr. Daniels. Yes, about 50 percent of our critical2034medicines are in that category.2035    The Chairman. Do you think this is a national security2036risk?2037    Mr. Daniels. It 100 percent is.2038    The Chairman. I am a grandfather. Kids usually get ear2039infections and strep throat, so if China were to drop liability2040and limit antibiotic-related APIs from being exported, would it2041impact us?2042    Mr. Daniels. Yes. You would see at least 50 percent of the2043antibiotics that your kids have access to evaporate. In fact,2044the next time one of your grandchildren gets a strep throat or2045an ear infection, I encourage you to look at it. I bet you2046dollars to doughnuts, it is made by Aurobindo, which is an2047Indian manufacturer using Chinese KSMs and APIs.2048    The Chairman. Do you think this could create a public2049health emergency?2050    Mr. Daniels. It almost did during COVID. I experienced it.2051I was working with Ellen Lord, Honorable Ellen Lord and Jen2052Santos and Stacey Cummings, and when they said they were going2053to drown us in a sea of COVID--I mean, those calls really did2054happen.2055    The Chairman. How long do you think--if they shut it off2056tomorrow, how long you think our supply is for?2057    Mr. Daniels. I mean, it is months. As Dr. Piervincenzi2058said, it is months. It is month with severe constraints. I mean2059you would probably be treating--you know, you would be treating2060people in sepsis. Kids would have to weather through, and that2061could be very dangerous.2062    The Chairman. Are there any sole source drugs, which, you2063know, there was only one supplier?2064    Mr. Daniels. There are.2065    The Chairman. They are relying on Communist China or India?2066    Mr. Daniels. There are--I don't have the names off the top2067of my head, but I remember looking in the study, there were2068significant volumes.2069    The Chairman. Let me make sure I got this right, 95 percent2070of ibuprofen is imported from China?2071    Mr. Daniels. Ninety-five percent of ibuprofen, so there is2072a key starting material that is--that 95 percent of it I2073believe is pulled from China, is sourced from China, and that2074ingredient then goes into ibuprofen.2075    There are other ways in which to source that same material.2076The same goes for acetaminophen. There are other ways to source2077that material, but they are not cost advantageous and so2078therefore are not used.2079    The Chairman. Ninety-one percent of hydrocortisone is2080imported from China. Does that sound right?2081    Mr. Daniels. That sounds right.2082    The Chairman. Ingredients. Half of U.S. Penicillin and2083Heparin are imported from China?2084    Mr. Daniels. Yes.2085    The Chairman. The Federal Government knows this and has2086done absolutely nothing about it.2087    Mr. Daniels. At the moment, after COVID, there was a huge2088fervor. It died. We started studying the problem and stopped2089executing against the reshoring and strategic activities, and,2090you know, I am hopeful that HHS, particularly the FDA picks2091this up, but as of right now, we are not actively policing2092these supply chains.2093    The Chairman. Are you familiar with the Uyghur Forced Labor2094Prevention Act?2095    Mr. Daniels. I am, Chairman, yes.2096    The Chairman. Do you think that is being complied with?2097    Mr. Daniels. I do not believe we are conducting significant2098or thorough investigations in this pharmaceutical space, and at2099the beginning of the year, there was a significant drop in2100detentions that would indicate a lower volume of enforcement.2101Those have since rebounded, Chairman Scott. I think we could2102significantly stiffen and significantly strengthen our policing2103of that law.2104    The Chairman. Have you tracked the Department of Defense's2105reliance on China for drugs?2106    Mr. Daniels. I have, yes.2107    The Chairman. Do we have our own source, so our military is2108never dependent on China?2109    Mr. Daniels. We do not.2110    The Chairman. Why wouldn't we?2111    Mr. Daniels. We, in many areas, are reliant on--it is kind2112of like we have in critical minerals and in magnets, Chairman2113Scott, where the commercial markets have so deeply been usurped2114by China that we don't have the investment capital coming in to2115offset it.2116    Just like we are doing in MP materials and neodymium, iron,2117boron magnets and things like that for our weapons systems, we2118have to make those same kind of investments in our2119pharmaceutical supply chains.2120    The Chairman. If China invades Taiwan or continues to2121attack the sovereignty of the Philippines and we go to their2122defense, do you think they will keep shipping us drugs?2123    Mr. Daniels. I think Chairman Scott, it would be a key2124tactic to stop doing this.2125    The Chairman. Do you think it would be safe for our2126military to continue taking Chinese drugs?2127    Mr. Daniels. No, sir.2128    The Chairman. Can you explain the role that Chinese2129Communist Party and the People's Liberation Army links play2130into the generic drug supply chain, and how federal programs2131like Medicare and Medicaid are paying for it?2132    Mr. Daniels. Yes, Chairman Scott. The PLA is infused into2133the Chinese economy. It is called the military-civil fusion,2134and in many cases, and as we have pointed out in the Bitter2135Pill Report, several of the organizations that are producing2136these active pharmaceutical ingredients or KSMs are actually2137sponsored and funded by PLA-funded entities are directly by the2138PLA.2139    Those situations create a significant amount of command and2140control, what we call foreign ownership control and influence2141risk, in those companies, and make them essentially beholden to2142not only the CCP, but the PLA.2143    The Chairman. Would you say that the U.S. health care2144system is entirely beholden to the Communist Party of China?2145    Mr. Daniels. At the moment, yes, sir.2146    The Chairman. Dr. Piervincenzi, how many sole-sourced APIs2147come from Communist China?2148    Dr. Piervincenzi. Thank you, Senator. We are aware of 112149that are directly coming from China, but that is not the real2150answer. The real answer is the APIs are coming from China to2151India, and we know that is where 95 percent of our challenges.2152I think antibiotics are a unique case, and it is real, and it2153was strategic.2154    It was a choice in China many years ago, in fact, 15 years2155ago to have that as a strategic asset, and it was successful,2156while the world wasn't really paying attention, but that is a2157bit of an outlier. I think the vast majority of reliance on2158China is coming back to the starting materials, the chemicals,2159in some cases the excipients as well--less often, but in some2160case.2161    The Chairman. How many generic drugs use key starting2162materials from China?2163    Dr. Piervincenzi. We are going to have a real answer for2164that, but it is going to be somewhere in the range of 20 to 402165percent would be my guess, but give me about two more months2166and we will have a better answer for you.2167    The Chairman. How about brand name drugs? Do they use APIs2168from India or China?2169    Dr. Piervincenzi. Rarely, and it just goes to the different2170incentives. It is not that they couldn't. It is just that it is2171not necessary. The incentive is high value product. We need to2172have a very reliable supply chain.2173    Their finished dose is rarely in those countries. They2174don't want to have a big, complicated supply chain halfway2175around the world, so they try to simplify, and so, therefore,2176you see the APIs manufactured mostly in U.S., Europe, Canada.2177If you think of those, that is going to be your majority. A bit2178more in Europe than the U.S. in this case.2179    The Chairman. What sort of random testing of generics drugs2180happen in our marketplace?2181    Dr. Piervincenzi. The U.S. market is a bit unique in the2182world today. There is a risk-based approach at FDA, which is2183taking into account known issues and that drives testing, and2184FDA has its own labs and of course can outsource testing as2185well.2186    There is very little random testing, and currently today2187there really is no private sector solution to do so. This is2188relatively common practice in most markets including in Europe,2189but in middle-income countries as well. It is generally called2190post-market surveillance, which is a fancy way to say you buy2191something from the pharmacy and you test it.2192    The Chairman. Does USP track how many drugs Americans are2193taking that rely on Chinese APIs?2194    Dr. Piervincenzi. Yes.2195    The Chairman. Does that present a risk to our supply chain?2196    Dr. Piervincenzi. If you believe that China supplying our2197drugs is a risk, then the answer would be yes.2198    The Chairman. How many of you would buy a generic drug made2199in India or China if you knew there was American-made drug2200available?2201    Dr. Piervincenzi. Senator, if I have an offer, I would if I2202had the assurance on the front end of the system. The system as2203we described is tilted today and that is the issue, and that it2204is an important nuance to me because that is where the solution2205lies, is that un-tilting and I think that is a consistency that2206you hear from us.2207    The Chairman. I think, if you listen today, based on the2208testimony, Americans, we have hospitalizations, we have illness2209and death because of adverse effects from some foreign-made2210generic drugs.2211    Does anybody disagree with that? Bad drug quality doesn't2212just mean drugs are less effective, which it could be, right?2213Also make you sick or could kill you, so every American2214senior--see if you agree with this, every American Senior needs2215to look into their medicine cabinet and ask this question, am I2216confident that the generic drugs I am taking are truly safe?2217    Do you believe today they could say that? Do they have any2218ability to say that? Do any of you think they have any ability2219to that today that if they look in their medicine cabinet, or2220they go to their pharmacy, they can say it is safe? I talked2221about LeRoy Hubley, lost his wife at 48 years, Bonnie and his2222son, Randy, just weeks apart due to contaminated Heparin that2223they needed for their dialysis treatment. It is horrible.2224    This should never happen in this country. If Americans2225don't know where the generic drugs are taken or made, if there2226is no measurement system, there is nowhere they can feel2227confident, they can feel safe. It is clear that we have a big2228problem.2229    I am from Florida. I was the Governor. We have hurricanes.2230At least in hurricanes, in contrast to some other things, at2231least you can get out of the way, or you should. I always tell2232people that you can rebuild a house, but you can't rebuild your2233life, and you tell people to get prepared.2234    It seems like we are number one, even if we didn't have the2235concern about the way that Communist China acts, we say to2236ourselves, it is crazy that we are not focused on quality and2237focused on supply.2238    On top of that, we know that we have Communist China that2239is threatening Taiwan and threatening the Philippines, and why2240in God's great Earth would we ever allow our country to be2241dependent, whether you are talking about anybody that takes a2242generic drug, including our seniors, or why would we ever, ever2243put our military in that position? It just doesn't make any2244sense.2245    I think the bottom line is we have no choice, but we have2246to make significant changes. I hope the new head of the FDA2247will take this seriously and hope we will see change. I think2248we are going to see change is if the American public demands2249it.2250    My experience as Governor of Florida, my experience in this2251job is that if people demand it, then it is going to happen.2252People continue to be complacent, it is not going to happen. I2253would like to thank everyone for being here today and2254participating. I look forward to continuing to work with2255members across the aisle.2256    If any Senators have additional questions for the witnesses2257or statements to be added, the hearing will be open until next2258Wednesday at 5:00 p.m. Anything else anybody wants to add? [No2259response.]2260    The Chairman. Thanks, everybody. Thanks for being here.2261    [Whereupon, at 05:23 p.m., the hearing was adjourned.]2262=======================================================================22632264                                APPENDIX22652266=======================================================================22672268                      Prepared Witness Statements22692270=======================================================================22712272                 U.S. Senate Special Committee on Aging22732274         "Prescription for Trouble: Drug Safety, Supply Chains,2275                    and the Risk to Aging Americans"22762277                           September 17, 202522782279                      Prepared Witness Statements22802281                              Peter Baker2282[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]22832284                 U.S. Senate Special Committee on Aging22852286         "Prescription for Trouble: Drug Safety, Supply Chains,2287                    and the Risk to Aging Americans"22882289                           September 17, 202522902291                      Prepared Witness Statements22922293                            Dr. George Ball2294[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]22952296                 U.S. Senate Special Committee on Aging22972298         "Prescription for Trouble: Drug Safety, Supply Chains,2299                    and the Risk to Aging Americans"23002301                           September 17, 202523022303                      Prepared Witness Statements23042305                            Brandon Daniels2306[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]23072308                 U.S. Senate Special Committee on Aging23092310         "Prescription for Trouble: Drug Safety, Supply Chains,2311                    and the Risk to Aging Americans"23122313                           September 17, 202523142315                      Prepared Witness Statements23162317                        Dr. Ronald Piervincenzi2318[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]2319=======================================================================23202321                        Questions for the Record23222323=======================================================================2324[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]2325                 U.S. Senate Special Committee on Aging23262327"Prescription for Trouble: Drug Safety, Supply Chains, and the Risk to2328                            Aging Americans"23292330                           September 17, 202523312332                        Questions for the Record23332334                            Brandon Daniels23352336                        Senator Elizabeth Warren23372338Questions:23392340How would requiring drug manufacturers to disclose the source2341of active pharmaceutical ingredients (APIs) and key starting2342materials (KSMs) used to make drugs consumed in the U.S.2343increase the supply of safe and effective drugs for U.S.2344consumers?23452346During the hearing, you explained that supply chain mapping can2347help to anticipate supply chain disruptions and critical drug2348shortages. Would requiring pharmaceutical manufacturers to2349report API and KSM sources to the federal government improve2350supply chain mapping?23512352Would a federal database with this information help avoid2353supply chain disruptions and critical drug shortages?23542355Based on your experience at Exiger, which components of the2356pharmaceutical supply chain need the greatest scrutiny or2357investment to increase the supply of safe and effective2358pharmaceuticals?23592360      a.What are the most significant barriers preventing the2361United States from onshoring more pharmaceutical manufacturing2362that Congress should prioritize addressing?23632364      b.How would you suggest Congress address these barriers?23652366In your testimony, you highlighted that there are national2367security risks to the Department of Defense (DoD) being2368overreliant on foreign pharmaceutical manufacturing. How do2369these risks undermine military readiness?23702371How do U.S. national security risks increase with higher rates2372of unsafe, foreign pharmaceutical manufacturing?23732374Which essential medicines should DoD prioritize securing safe,2375reliable access to for service members?23762377As you noted in your testimony, DoD revealed that "54% of the2378DoD pharmaceutical supply chain is considered either high or2379very high risk, with dependency on non-[TAA] compliant2380suppliers, sourcing from China, or unknown." What would be the2381impact on the military readiness if DoD lost access to 54% of2382the supply chain?23832384Can you provide examples of how DoD has been adversely impacted2385by pharmaceutical supply chain disruptions?23862387Can you provide examples of how DoD has been adversely impacted2388by drug shortages?23892390Can you provide examples of how DoD has been adversely impacted2391by unsafe pharmaceuticals?23922393How do DoD pharmaceutical supply chain challenges, drug2394shortages, or access to unsafe pharmaceuticals result in direct2395additional health care expenditure?23962397What types of indirect costs result from higher rates of2398illness if DoD experiences pharmaceutical supply chain2399challenges, drug shortages, or access to unsafe2400pharmaceuticals?24012402What other costs to DoD occur as a result of supply chain2403challenges, drug shortages, or access to unsafe2404pharmaceuticals?24052406How would DoD benefit from domestic manufacturing of2407pharmaceuticals?24082409What are the dangers of DoD being overreliant upon a single2410supplier for pharmaceutical products?24112412How would DoD benefit from government-owned, contractor-2413operated pharmaceutical manufacturing facilities? Please2414provide relevant examples.24152416How would DoD benefit from government-owned, government-2417operated pharmaceutical manufacturing facilities? Please2418provide relevant examples.24192420How would the civilian population benefit from government-2421owned, contractor-operated pharmaceutical manufacturing2422facilities? Please provide relevant examples.24232424How would the civilian population benefit from government-2425owned, government-operated pharmaceutical manufacturing2426facilities? Please provide relevant examples.24272428What are the dangers of DoD being forced to purchase drugs or2429medical countermeasures considered less secure under the2430Defense Logistic Agency hierarchy of drug security due to2431shortages or supply chain challenges? Please provide examples2432of when this has occurred.24332434What are the dangers of DoD being forced to adjust dosages or2435dispensing of drugs and medical countermeasures due to2436shortages or supply chain challenges? Please provide examples2437of when this has occurred.24382439What are the dangers of DoD being forced to pay a higher cost2440for pharmaceuticals and medical countermeasures due to2441shortages or supply chain challenges? Please provide examples2442of when this has occurred.24432444What are the dangers of DoD being forced to use different,2445less-optimal medication due to shortages or supply chain2446challenges? Please provide examples of when this has occurred.24472448What challenges could DoD face in finding enough adequate and2449cost-efficient suppliers for pharmaceuticals and medical2450countermeasures in instances where DoD represents all or nearly2451all of the U.S. commercial marketplace for that drug or medical2452countermeasure?24532454Response:24552456Responses were not available at the time of printing. Please2457contact the Committee if there are questions.24582459                        Senator Raphael Warnock24602461Questions:24622463In your testimony, you emphasized the role of advanced data2464analytics in identifying vulnerabilities before crises occur as2465well as the importance of "stress testing" the pharmaceutical2466supply chain.24672468Looking back at Hurricane Helene, could predictive modeling2469have flagged Baxter's IV fluid facility as a single point of2470failure for the U.S. health system, and how can Congress better2471leverage supply chain mapping to prevent similar crises?24722473What would a meaningful stress test look like in practice,2474particularly for scenarios such as a natural disaster or2475international trade disruption, including a Chinese export ban?24762477In Georgia, we have both a rapidly aging population and one of2478the nation's largest Veteran populations. Veterans represent a2479uniquely vulnerable population in the U.S. drug supply chain-2480not only because they are aging, but also because they often2481need a greater number of medicines to manage service-connected2482injuries, Post-Traumatic Stress Disorder (PTSD), and other2483chronic conditions. When shortages occur, as we saw after2484Hurricane Helene with IV fluids, Department of Veterans Affairs2485facilities could be forced to ration care.24862487How should Congress ensure that resilience planning and2488procurement contracts specifically account for the higher2489medication needs of Veterans, especially aging Veterans, so2490that this population is never left behind in a crisis?24912492Transparency into where and how medicines are made is critical2493for both patient safety and supply chain security.24942495How would requiring country of origin or manufacturing facility2496information on labels improve the security of our drug supply2497chain, particularly for seniors in states like Georgia?24982499What steps should Congress take to enforce existing reporting2500requirements and ensure greater transparency overall?25012502Response:25032504Responses were not available at the time of printing. Please2505contact the Committee if there are questions.2506[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25072508=======================================================================25092510                       Statements for the Record25112512=======================================================================25132514                 U.S. Senate Special Committee on Aging25152516         "Prescription for Trouble: Drug Safety, Supply Chains,2517                    and the Risk to Aging Americans"25182519                           September 17, 202525202521                       Statements for the Record25222523                             AARP Statement2524[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25252526                 U.S. Senate Special Committee on Aging25272528         "Prescription for Trouble: Drug Safety, Supply Chains,2529                    and the Risk to Aging Americans"25302531                           September 17, 202525322533                       Statements for the Record25342535     American Society of Health-System Pharmacists (ASHP) Statement2536[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25372538                 U.S. Senate Special Committee on Aging25392540         "Prescription for Trouble: Drug Safety, Supply Chains,2541                    and the Risk to Aging Americans"25422543                           September 17, 202525442545                       Statements for the Record25462547                  Amneal Pharmaceuticals LLC Statement2548[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25492550                 U.S. Senate Special Committee on Aging25512552         "Prescription for Trouble: Drug Safety, Supply Chains,2553                    and the Risk to Aging Americans"25542555                           September 17, 202525562557                       Statements for the Record25582559             Association for Accessible Medicines Statement2560[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25612562                 U.S. Senate Special Committee on Aging25632564         "Prescription for Trouble: Drug Safety, Supply Chains,2565                    and the Risk to Aging Americans"25662567                           September 17, 202525682569                       Statements for the Record25702571            Indian Pharmaceutical Allicance (IPA) Statement2572[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25732574                 U.S. Senate Special Committee on Aging25752576         "Prescription for Trouble: Drug Safety, Supply Chains,2577                    and the Risk to Aging Americans"25782579                           September 17, 202525802581                       Statements for the Record25822583                  National Consumers League Statement2584[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25852586                 U.S. Senate Special Committee on Aging25872588         "Prescription for Trouble: Drug Safety, Supply Chains,2589                    and the Risk to Aging Americans"25902591                           September 17, 202525922593                       Statements for the Record25942595                Partnership for Safe Medicines Statement2596[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]25972598                              [all]