Dive Brief:

• A National Academies of Sciences, Engineering, and Medicine (NASEM) committee, mandated by Congress, has recommended against relying on onshoring to improve the resilience of medical device supply chains, arguing that a "knee-jerk" rejection of globalization would have negative consequences.
• NASEM's Committee on Security of America's Medical Supply Chain has instead made a series of recommendations intended to make supply chains more transparent and encourage health systems to factor the quality and reliability of products into their purchasing decisions.
• The recommendations include a call for device manufacturers to disclose the manufacturing site for primary and final assembly steps for all products and major components sold in the U.S. NASEM also wants device manufacturers to publish details of volume and capacity. The report comes on the heels of a recent HHS plan on the topic, which emphasized domestic production of raw materials and increasing stockpile inventory. 

Dive Insight:

Disruptions to the supply of medical products predate COVID-19, but problems such as shortages of N95 masks early in the pandemic emphasized the limitations of the current system. Congress responded by ordering the formation of an ad hoc committee to examine the security and resilience of U.S. medical product supply chains. NASEM has now published the conclusions of the committee.

The report notes the "knee-jerk response in the media and elsewhere has been to blame globalization" for supply chain failures. However, while the report acknowledges that long, global supply chains have "more failure modes" that short, domestic supply chains, it also discusses the reasons why globalization happened and the downsides to trying to reverse the process. Moving manufacturing to the U.S. would hit cost and availability, the report states, and may decrease resilience by concentrating production on a single location.

"It would be irresponsible to onshore medical products if there were more cost-effective ways to achieve medical product supply chain resiliency. For example, if holding a vast stockpile of a critical medical product would provide more protection for less cost than onshoring the product, why wouldn't we do it?," the report states.

Having picked apart the case for onshoring, the committee proposed its own recommendations for supply chain resilience. The first is for the FDA to take steps to make sourcing, quality, volume, and capacity information publicly available for all medical products approved or cleared for sale in the U.S.

That would entail manufacturers of medical devices publishing the production location for products and major components sold in the U.S. on their labels and in a publicly accessible database. Device labels and a database would also carry the risk-based Site Selection Model score for the primary manufacturing and final assembly plants, which the FDA uses to prioritize inspections based on risk.

The committee also wants to extend the provisions of the CARES Act, which requires manufacturers to report drug volume details via a dedicated portal. The proposal is to extend the reporting requirement to medical devices, add capacity to the list of information that must be reported and make the data available publicly. 

Other recommendations go beyond FDA's role in ensuring resilience. The committee wants U.S. health systems to include "failure-to-supply penalties for contracts requiring a committed purchase or purchase volume" in their agreements with medical product suppliers, and to preferentially award contracts to "suppliers that can demonstrate superior quality and reliability."  

The range of recommendations reflects a belief that "there is no single 'silver bullet' for the medical product supply chain problem" and, as such, "a host of coordinated activities by medical product supply chain managers, government agents, and medical providers" are needed to make the U.S. safer the next time a crisis happens.