Strengthening the Supply Chain & Industrial Base

Public Health Supply Chain and Industrial Base
One-Year Report

HHS performs a vital role in the public health supply chain and industrial base. It does this in part by leveraging its convening power to bring stakeholders together to monitor and improve public health supply chains. HHS agencies and offices work, often in collaboration with other departments, such as the Departments of Defense (DoD), Commerce (DOC), and Labor (DOL), to address cross-cutting supply chain challenges and to strengthen the public health supply chain to ensure the United States has the resources it needs to prepare for and respond to public health emergencies. HHS accomplishes these responsibilities by contributing to the advanced development of critical MCMs; acquiring, stockpiling, and distributing needed public health supplies; implementing regulatory standards; and partnering and communicating with industry and other stakeholders to enhance supply chain visibility and to develop solutions to supply chain challenges.

In addition, HHS, ensures medical products are safe for the American public to use. The Centers for Disease Control and Prevention’s (CDC) National Institute for Occupational Safety and Health (NIOSH) tests and approves respirators to ensure they meet regulatory standards and conducts studies on other PPE types to inform implementation guidance and performance specifications for voluntary consensus standards.^ix The Food and Drug Administration (FDA) ensures medical devices, drugs, and biological products, including vaccines, are safe and effective before they are approved for use by the public. FDA’s shortage prevention programs and generic review processes help ensure that essential medical products are available and accessible to the people who need them. FDA advances public health by helping to speed innovations that make public health products more effective, safer, and affordable, by bringing efficiencies to the drug development and review process and promoting robust competition for established drugs, and by providing accurate, science-based information to the public.

Current Actions to Build Public Health Supply Chain Resilience

Themes within the National Strategy for a Resilient Public Health Supply Chain include

manufacturing and industrial base expansion (IBx) investments;
stockpiling, allocation, and coordination;
innovation;
trade policy and Buy American;
regulations, policy, and standards;
workforce development;
global partnerships and standards;
governance;
external stakeholder engagement and coordination.

HHS’s role in the public health supply chain has grown and is increasing as part of the COVID-19 response. Efforts under EOs 14017 and 14001 (A Sustainable Public Health Supply Chain, issued January 21, 2021) have already galvanized a large part of the interagency to fully implement HHS and national strategies. For example, HHS is expanding the PHIB and developing innovative solutions to address critical deficiencies in the public health supply chain by working across the U.S. Government and with academia and the private sector.^x Since the COVID-19 pandemic began, HHS and DoD have collaborated on more than $4B of investments to increase domestic production of MCMs to provide a reliable supply chain of medical products and to reduce risk to industry partners by connecting their products with actual customers in the government and the private sector. Stability is essential if the Nation is to count on the private sector to invest in innovations, new facilities, and an expanded workforce. These improvements in domestic manufacturing must occur across the entire supply chain; the companies involved want to know there will be enough demand now and in the future to sustain these expansions.

HHS is implementing recommendations outlined in the National Strategy to address critical gaps in the public health supply chain. Each recommendation is tied to specific interagency actions to mitigate root causes and bolster domestic manufacturing resilience. Recommendations that affect the entire public health supply chain—including PPE and DME, testing and diagnostics, and pharmaceuticals and vaccines—and related activities are outlined below.

Manufacturing and Industrial Base Expansion Investments

Create Public Health Industrial Base and Supply Chain Management Program: HHS is consolidating IBx and DPA-related activities into a new program office in 2022 to align resources and strategic intent to build domestic manufacturing capacity. This new IBx office will work with industry to identify levers to support domestic manufacturing. Subsequent efforts will focus on industrial base partnerships, emphasizing a sustainable and diverse manufacturing portfolio to mitigate a future public health emergency.

Establish DPA Title III⁹ Program to build domestic industrial resources: HHS’s DPA Title III Program will launch in Summer 2022 as part of broader Departmental efforts to strengthen the public health supply chain and to enhance industrial base capabilities. Dedicated to ensuring the timely availability of essential domestic industrial resources to support national defense, homeland security, and emergency preparedness requirements, the DPA Title III Program will target investments to sustain critical production, commercialize research and development investments, and scale emergency technologies to enhance or expand domestic PHIB capabilities.

The program will work in partnership with key internal and external stakeholders—including HHS offices, interagency partners, and industry—to identify areas where critical industrial capacity is lagging or non-existent. It will help reduce the Nation’s reliance on foreign supply chains, ensure the integrity of materials supplied to the American people, and enhance national defense. The program is one of the key investment tools for HHS and the U.S Government to prepare for and respond to future public health and other threats to the national defense.¹⁰

Identify Mechanisms for Sustainable Funding: HHS is building sustainable funding streams for IBx and supply chain activities. For example, the Critical Supply Chain Resilience Program (CSCRP) at DOC provides HHS with additional financing mechanisms to promote resilience for designated critical products in the face of supply chain risks. The DPA Title III Program will establish the necessary authorities and mechanisms to allow the CSCRP to be used for PHIB management. This funding will support extended long-term contracts, on-hand inventory, vendor-managed inventory, and ensure sufficient manufacturing capacity such that the U.S. Government could trigger procurement or production of critical supplies at the start of a public health emergency.

Build Visibility: HHS is building and improving end-to-end visibility of the supply chain, including through the Supply Chain Control Tower (SCCT)¹¹ and the FDA’s Resilient Supply Chain and Shortages Prevention Program, administered by the Center for Devices and Radiological Health.¹² Enhancing supply chain surveillance and monitoring will enable earlier identification of concerns, issues, and challenges and help bring this information to leadership and relevant agencies sooner than might have been possible before. HHS is developing conceptual frameworks to support informational needs, recruiting staff with supply chain and data analytic skillsets, and employing technical integration of existing data platforms and designs for future growth.

Currently, the SCCT has eight distributors who voluntarily provide limited data about the supply of five PPE categories, 30+ pharmaceuticals, and other medical products on a near-daily basis. The SCCT receives data from distributors who represent 80 to 85 percent of the volume for the commodities it is tracking, and the total number of distributors varies by commodity. HHS Protect ingests and normalizes the data to create reports and dashboards that provide unprecedented visibility into commercial supply chains. The SCCT has also integrated supply status from around 5,000 hospitals and 15,800 long-term care facilities. The SCCT works closely with federal partners to share information, develop capabilities, and support decision making.¹³ HHS will share industry insights with the Office of Management and Budget’s Made in America Office and work with procurement category managers to promote domestic sourcing in Federal procurement pursuant to Executive Order 14005 (Ensuring the Future Is Made in All of America by All of America’s Workers, issued January 25, 2021).

Advance Manufacturing Technologies to Build Domestic Manufacturing Capacity: HHS recently launched efforts to enable, engage, and enhance domestic supplies of and improved access to critical drug substances and drug products, which would be subject to future review and approval. It has done this by developing and commercializing advanced manufacturing technologies to reduce overall production costs to ensure price competitiveness with foreign industry while maintaining appropriate quality standards consistent with current good manufacturing practice (cGMP). These advances include development and deployment of 1) platform technologies that enable on-demand, continuous practice (cGMP)-compliant production of pharmaceuticals, and 2) a platform technology that enables distributed on-demand production of cGMP-compliant intravenous saline solution and other supportive care fluids. Continuing innovation, development, and commercial deployment of these platforms, including through coordination with the Made in America Office and the Manufacturing Extension Partnership, will enable distributed domestic drug substance and drug product manufacture. At the same time, these platforms will help strengthen supply chain resilience, grow the bioeconomy, and deploy increasingly renewable and sustainable pharmaceutical resources capable of immediately responding to surges in demand caused by public health emergencies.

Ensure Safe Waste Management Strategies: HHS is investing in research and development efforts to deliver safe and effective long-term waste management strategies to protect human health and the environment. HHS will work in partnership with other federal agencies to design and execute this work.

Stockpiling, Allocation, and Coordination

Transform the SNS: HHS is transforming the SNS to create a larger, more diverse, and interlinked supply chain with SLTT and private partner capabilities, which are critical to the Nation’s ability to prepare for and respond to public health emergencies. This transformation requires focusing on the SNS’s contents and ensuring the SNS has access to additional supplies of MCMs by expanding the domestic PHIB and integrating comprehensive supply chain solutions. HHS is leveraging creative acquisition strategies and targeted stockpiling approaches that optimize shelf-life, enhance distribution, enable product rotation strategies with health delivery facilities, and account for scarce resource allocation decisions. The SNS teams are working to increase and sustain funding and promote horizontal coordination across government, SLTT, and industry stakeholders to improve supply chain situational awareness and analytics for manufacturers.

Develop MCMs Stockpiling Plan: HHS is developing a United States Medical Countermeasures Stockpiling Plan to transform the U.S. Government’s ability to monitor, manage, and grow the public health supply chain through stockpiles, visibility, and engagement. This plan will recommend enhancements to information sharing and ensure jurisdictional stockpiles, which are maintained by SLTT and private sector entities, employ coordinated and complementary stockpiling strategies to those maintained by the U.S. Government and private sector. This information sharing and coordination will ensure MCMs that are necessary to prevent, diagnose, and treat diseases are readily available and deployable, if needed in the future. The plan will explore alternative approaches to stockpiling MCMs, including vendor-managed inventory, as well as build strategies to develop a common operating picture of MCM stockpiles. These changes will build stronger, more resilient stockpiles across all sectors and levels of government.

National Framework for Allocation of Constrained Resources: The establishment of a national framework for SLTT planning, preparedness, and response is essential to ensure fair, equitable, and effective allocation of constrained resources. The framework would establish a shared understanding of roles, responsibilities, risks, processes, and systems required for pre-, intra-, and post-pandemic governance and management. The framework will facilitate coordinated information sharing, enable cross-jurisdictional support during public health emergencies, and ensure consistent and coordinated continuity of support.

Innovation

Speed Innovation and Development of Public Health Supplies: HHS is in the early stages of launching a virtual innovation center that will serve as a hub to speed the pace and direction of innovation for public health supplies and facilitate the processes and approvals required for manufacturing products. The innovation center will incorporate an effective organizational design, leverage novel public-private partnerships, and sustain interagency collaboration that will invigorate an underfunded sector and catalyze new technological advances in PPE and broader MCMs. A key purpose of the innovation center is to facilitate expedition of the processes and approvals required for domestic manufacturing of these products. The innovation center will provide a platform for entrepreneurs, manufacturers, and product developers to obtain early regulatory feedback, and serve as a multi-sided matchmaking platform for new domestic manufacturers to connect with SLTT and private sector end-users seeking reliable supplies of quality products, particularly during surge events when normal distribution channels are limited.

Regulations, Policy, and Standards

Promote Environmentally Sustainable Manufacturing Practices: HHS, in consultation with the Environmental Protection Agency (EPA) and the Department of Energy (DOE), will promote environmentally sustainable manufacturing practices that protect the environment and public health, including for communities adjacent to manufacturing facilities. This effort will draw on COVID-19 lessons learned to strengthen the PHIB and address the interests and needs of communities with environmental justice concerns.

Promote Ethical Production and High-Quality Product Standards: To promote adoption and enforcement of ethical production and high-quality product standards, HHS is supporting other agencies, including the Department of State (DOS), in mitigating risks caused by forced labor, counterfeits, and deficient product quality in the public health supply chain.

Workforce Development

Train and Build the Supply Chain Workforce: HHS is making strides to audit the U.S. Government’s public health supply chain workforce talent and build strategies to address demands for a skilled workforce. This effort will include close coordination and collaboration with DOL to catalogue opportunities and understand functional competencies needed to train and build the workforce.

Specifically, DOL is implementing efforts to bolster the U.S. supply chain workforce with the people and skills needed for pandemic preparedness. Planning is underway to expand apprenticeships alongside the private sector to ensure a steady pipeline of talent into the industry. Additional investments support expanding existing workforce grants and programs across the interagency to strengthen job training and skill and knowledge development programs.

Global Partnerships

Leverage Global Partnerships: HHS and DOS are building a framework to leverage global partnerships to strengthen and expand the regional PHIB that complements domestic manufacturing expansion efforts to ease supply chain barriers and promote near-shore production of essential products.

Trade Policy and Buy American

Strategic Near-Shoring and On-Shoring: The Made in America Office and the DOC are coordinating efforts to foster the use of domestic sourcing, including Buy American and Berry Amendment policies, in the public and private sectors to sustain reliable domestic manufacturing capacity for critical MCMs over the long term. This requires sustaining a reliable manufacturing base, leveraging partnerships with industry and international neighbors and allies, and reviewing domestic sourcing and international procurement commitments to ensure they support U.S. supply chain capacity and resiliency. Further efforts are underway to bolster the resiliency of the healthcare sector through emergency preparedness, which the COVID-19 pandemic has shown deserves renewed focus.

Increase Competitiveness of the U.S. Economy: The U.S. Government recognizes the critical importance of producing PPE in the United States, and towards this end, is implementing Buy American provisions to expand the industrial base for domestic PPE production capacity. It is also working to increase the competitiveness of the U.S. economy through the Infrastructure Investment and Jobs Act’s (IIJA) Made-in-America requirements aimed at bolstering domestic manufacturing and manufacturing supply chains.^xi Section C of the IIJA, the “Make PPE in America Act,” establishes a PPE production program requiring the Department of Homeland Security (DHS), HHS, and the Department of Veterans Affairs (VA) to secure long-term contracts (of at least two years) for domestically manufactured PPE (e.g., powered air purifying respirators, protective eyewear, and gloves) to help ensure the sustainment and expansion of domestic PPE production.

Governance

The National Security Council and National Economic Council will lead interagency efforts to coordinate existing programs that address national supply chain efforts.

Transform the Public Health Emergency Medical Countermeasure Enterprise (PHEMCE): Efforts are under way within HHS to transform and reinvigorate the PHEMCE as a coordinating body across the interagency entities that govern or otherwise influence the supply chain to address public health supply chain issues. The PHEMCE will guide implementation of resilient public health supply chain processes based on adaptive and responsive inventory management practices for the SNS.

Develop Annual Report: HHS is actively monitoring progress of implementation for each activity within the National Strategy through an annual report that summarizes and assesses ongoing activities intended to increase the public health supply chain’s resilience. The report will outline key recommendations to mitigate vulnerabilities and provide updates on current implementation and mitigation measures. The first annual report is expected in July 2022.

External Stakeholder Engagement

External stakeholders—including the HPH sector, regulated industry and trade groups, academia and other researchers, SLTT authorities, and non-governmental organizations—play a pivotal role in pandemic preparedness and response efforts. To realize a resilient domestic public health supply chain, the U.S. Government must continue to build partnerships with external stakeholders.

HHS aims to improve coordination and information sharing to increase government visibility into the public health supply chain. Several public-private partnership mechanisms enable transparent, real-time dialogue and data sharing between government and industry partners. HHS is engaging supply chain industry experts to partner directly with HHS and DHS to strengthen supply chain resilience. HHS is also working with external stakeholders to better identify and understand the impact of cyber vulnerabilities on supply chain and critical infrastructure functionality.

HHS will remain active and flexible to respond to dynamic supply chain priorities and support long-term viability of U.S. Government investments in supply chain industry owners and operators. For example, the Office of the Assistant Secretary for Preparedness and Response (ASPR) is promoting business models supporting sustainability in the domestic MCM enterprise and taking significant steps to protect U.S. Government capacity investments made in the last 18+ months in response to the COVID-19 pandemic. These efforts will help to strengthen and build the resilience of the public health supply chain beyond the COVID-19 pandemic. Additional activities for engaging with external stakeholders include:

Streamline U.S. Government External Engagement: HHS is coordinating across the interagency to streamline U.S. Government engagements with external stakeholders on the public health supply chain. The efforts will outline pathways to engage with external stakeholders about supply chain issues during a public health emergency and identify and address potential gaps in existing engagement platforms. HHS and FDA will coordinate with the Made in America Office and the Manufacturing Extension Partnership to connect stakeholders with domestic manufacturing support programs.

Launch ‘IBx Connect’ Platform: HHS values the longstanding history of the U.S. Government’s connection with external stakeholders to accelerate success, as illustrated through existing platforms between the Biomedical Advanced Research and Development Authority (BARDA) at HHS, academia, and industry. HHS is reimagining the BARDA electronic platform and applying its principles to PHIB expansion and supply chain efforts through IBx Connect. IBx Connect will provide a fair and equitable platform to keep HHS and the broader U.S. Government apprised of valuable industry innovations and insights that will shape the broader IBx strategy and provide opportunities to engage with and inform industry. Beyond the IBx Connect platform, HHS is actively evaluating and identifying new ways to engage external stakeholders to promote innovations and potentially shape new policies to support domestic manufacturing capacity.

Build Capacity to Test and Evaluate Public Health Supply Chain: HHS is building capacity to test and evaluate preparedness within the public health supply chain across the whole community, including all levels of government and the private sector.

^9.DPA Title III is dedicated to ensuring the timely availability of essential domestic industrial resources to support national defense and homeland security requirements, accessed January 24, 2022.

^10. For the purposes of the DPA, the definition of national defense includes military and energy production, military or critical infrastructure assistance to any foreign nation, homeland security, space, stockpiling, emergency preparedness activities under The Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C 5195 et seq.), and critical infrastructure protection and restoration, accessed February 16, 2022.

^11. The Office of the Assistant Secretary for Preparedness and Response runs the SCCT.

^12.FDA’s Resilient Supply Chain and Shortages Prevention Program will enhance Center for Devices and Radiological Health’s capacity to enable rapid intervention to prevent and mitigate supply chain interruptions, accessed February 16, 2022.

^13. The SCCT does not control the number of participating hospitals and long-term care facilities. It is based on the number reporting through teletracking and the CDC’s National Healthcare Safety Network.

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