Q&A: USP CEO Urges Manufacturers to Act Now to Stop Drug Shortages

The US Pharmacopeia (USP) is working with stakeholders and lawmakers on a Drug Supply Chain Resilience Benchmark Initiative intended to create a measurable mechanism for incentivizing resilient purchasing. In this interview with PharmTech, Ronald T. Piervincenzi, CEO of USP since 2014, explains how procurement benchmarks, supply mapping, and regulatory capacity building fit together.

Access Part 1 of this interview, in which Piervincenzi explains how benchmarking could reward reliable generic drug suppliers.

Access Part 2 of this interview, in which Piervincenzi urges drugmakers and purchasers to act on supply chain resilience to curb drug shortages and shape better policy.

Access Part 3 of this interview, in which Piervincenzi explains why drug supply resilience needs a system approach, from procurement benchmarks to regulatory capacity building.

How Should Drug Manufacturers Respond to Supply Chain Policy News?

There's so much policy news that companies fear overreacting, but they don't want to ignore these important factors. The clear trend is toward action. In the US, Europe, and increasingly across the globe, there is a strong push to change the trajectory of supply chain resilience, affecting manufacturers upstream and purchasers downstream. My advice is to take the broader goal seriously, look for solutions, and not wait for others to put demands on the industry.

How Does USP Address the Cost of Resilience?

We've spoken with leading generic firms and their associations and understand the pinch they feel. Our approach focuses on downstream incentives, making the case that resilience is worth paying for and creating that expectation among buyers. There's considerable support; the challenge has been a lack of information and systems. Our benchmarking initiative provides tools that transparently show where supplies are resilient, so health systems and large procurers can prefer those purchases. It's less about direct cost to manufacturers and more about creating the incentive at the point of purchase.

Where Does the USP Resiliency Center Stand Today?

It's launching now, and we're actively hiring. We have a proof of concept for a methodology, but methodology and implementation are different, so the next step is doing the work. We're building mechanisms within our standard-setting process to create these benchmarks transparently, as we do for other standards. Then we'll work to incorporate them into buying decisions in both the private and public sectors.

Is Policy on Onshoring and Friendshoring Translating into Action?

There have been more news items than actions, which is typical for a hot policy topic, but actions are happening. European laws have made small but real differences on onshoring, and we're informing policymakers about what friendshoring could look like. With 2,000 different medicines, manufacturing everything in every country is impossible and would be incredibly expensive. Waiting on more reasonable solutions risks policy that goes too far or isn't well-informed, so we're urging purchasers and industry to act early and help shape better policy.

What Near-Term Steps Can Strengthen Supply Chain Resilience?

Data sources such as USP's Medicine Supply Map now show where medicines come from, including active pharmaceutical ingredients and, increasingly, key starting materials. Most shortages stem from quality issues or too much sourcing from a single location or manufacturer. Now we can pinpoint and evaluate those risks, then shift supply toward suppliers with better quality track records. Procurers can drive those changes by rewarding companies with strong records.

Why Can't One Resilient Supplier Prevent a Drug Shortage?

Consider a drug supplied roughly equally by two manufacturers. One has a strong resiliency program, including alternative sourcing, modest stockpiles, and a quality distribution system. The other offers a very low price without those factors. If the second has a disruption, the shortage hits everyone, because for humanitarian reasons, available supply must be distributed. No single supplier or procurer can ensure a robust supply, which is why a system approach is the only way.

How Does Regulatory Capacity Building Connect to Resilience?

As access to medicines expands globally, more regulators are becoming sophisticated, which adds complexity. No one has asked the most stringent regulators to lower their standards, so the solution is raising nascent systems toward international standards. If Latin American countries continue their progress and approach FDA-level systems, US sourcing options could expand dramatically as part of a nearshoring strategy. USP has done this capacity-building work for 35 years across Latin America, Southeast Asia, and Africa.

Why Hasn't This Problem Been Solved Already?

There's limited disagreement on what would help. It's a collective action challenge: one procurer can't solve it alone, so everyone waits. At USP, we're taking a risk, with full-time staff creating benchmarks and putting them in procurers' hands. We're bullish that acting now can lead to more aligned policies rather than short-term thinking that could disrupt the medicine industry.