ISPE Experts Join National Dialogue on Drug Supply Chain Security

The workshop provided a platform for discussions and insights that would inform the development of a decision framework for policymakers and stakeholders to strengthen the US prescription drug supply and protect national health and security. The workshop objectives were to:

• Define the systemic challenges affecting the US pharmaceutical supply chain and their implications for national security and public health
• Review prior policy proposals and industry responses to identify barriers that have hindered implementation
• Analyze the key factors that should guide make-buy-invest strategies across pharmaceutical markets from a national security standpoint
• Discuss mechanisms that can effectively incentivize and sustain strategic action from a national security perspective
• Assess how systemic enablers can facilitate implementation, exploring practical pathways and cost trade-offs for make-buy- invest strategies
• Identify the public and private stakeholders essential to executing make-buy-invest strategies, emphasizing where leadership, coordination, and accountability are most needed

Celeste Frankenfeld Lamm, PhD, Senior Director, Quality and Regulatory CMC Policy, Merck, and Co-chair of ISPE’s Product Quality Lifecycle Implementation (PQLI)® initiative, was a member of the workshop planning committee and moderated a panel that explored the criteria that guide make-buy-invest decisions.

Diane Hustead, Executive Director, Regulatory Affairs, Merck, who is the Immediate Past Chair of ISPE’s Drug Shortages Initiative, was a featured participant in a panel that examined why past proposals have struggled in national security contexts, and whether market forces prioritize cost over reliability.

The workshop was sponsored by Johns Hopkins University, with funding provided by the Uniformed Services University Center for Health Services Research via a grant from the US Defense Health Agency, Department of War.

Workshop Day One

Martin Makary, MD, Commissioner of the US Food and Drug Administration (US FDA), opened the workshop with a wide-ranging keynote address, reflecting on his transition from clinical surgery to federal leadership.

Makary outlined the US FDA’s renewed focus on accelerating access to meaningful treatments and cures. He introduced several initiatives aimed at improving efficiency and responsiveness, including the “pre-check” program for domestic manufacturing and a national priority review voucher system to fast-track applications. These efforts are designed to support companies committed to U.S.-based production and to strengthen the nation’s pharmaceutical supply chain. He acknowledged the global competition in drug development and clinical trials, noting that countries like China and Australia have streamlined processes that attract US business. To remain competitive, the US FDA is working to modernize its own systems, reduce bureaucratic delays, and convene stakeholders to improve trial infrastructure and review timelines.

Makary also discussed pricing reforms, including the “Most Favored Nation” strategy, which seeks to ensure Americans pay prices for medications comparable to those in other wealthy nations. He highlighted recent successes in securing significant price reductions and emphasized the importance of transparency and ethical decision-making in regulatory practices. In addressing inspections and safety, he shared plans to strengthen oversight of foreign manufacturing and ensure consistent standards across all facilities. He also spoke about the potential of computational modeling and artificial intelligence to enhance drug review processes, reduce reliance on animal testing, and lower research and development costs.

Throughout his remarks, Makary stressed the US FDA’s commitment to modernization, scientific rigor, and public trust, and expressed confidence in the agency’s ability to deliver on its mission. He closed by reaffirming his dedication to ethical leadership and collaborative progress.

Four panel discussions followed the keynote. The first two were aimed at establishing a shared understanding of the challenges facing the US pharmaceutical supply chain and creating a lens of defense readiness, disaster response, and critical care continuity through which the rest of the workshop discussions would be conducted.

The first panel, “Supply Chain Vulnerabilities Through a National Security Lens,” examined pharmaceutical supply chains through a national security framework, setting a focus for the rest of the workshop, and shifting from a purely economic or public health perspective to one that includes geopolitical risks, strategic dependencies, and preparedness for disruptions (natural or man-made).

The objective of the second panel, “Disconnect Between Proposed Solutions and Action,” was to examine why existing proposals have failed to scale or gain traction, especially when applied in the context of national security, and identify persistent implementation barriers, explore whether current market dynamics reward cost minimization over reliability, and whether stakeholders are willing to invest in resilience. The panelists included Diane Hustead, along with Marta Wosińska, PhD, Senior Fellow, Center on Health Policy at The Brookings Institution, and Erin Fox, Associate Chief Pharmacy Officer, Shared Services at the University of Utah Health, who also moderated the discussion.

Hustead’s opening remarks highlighted ISPE’s Drug Shortages Initiative, which began in 2012. ISPE focuses on the technical, scientific, manufacturing, quality, and compliance issues associated with a company’s supply chain and related to its ability to source, manufacture, and distribute products that have resulted in drug shortages. The body of work created as part of this initiative includes the Drug Shortages Prevention Model, which serves as a guide to help prevent shortages by providing quality, regulatory, and technical recommendations for the pharmaceutical manufacturing industry.

Hustead noted that in manufacturing and quality, shortages rarely have a single cause. They generally stem from systemic problems—where production, suppliers, regulations, and market dynamics all intersect. She offered ISPE’s perspectives on the panel’s four questions: why proposals haven’t scaled, the barriers that keep returning, how market dynamics influence reliability, and what lessons suggest a better path forward:

• Scaling Challenges: Global regulatory complexity and slow digital transformation hinder scalable solutions for supply chain resilience. Differing international regulations and a lack of interoperable digital tools make it difficult to modernize and respond quickly to disruptions.
• Inflexible Risk Management Approaches: Current frameworks often over-prescribe methods rather than focusing on outcomes. A flexible, evolving approach tailored to specific products and lifecycle stages is more effective for building resilience.
• Economic Disincentives: Market dynamics tend to prioritize cost over reliability, making it hard to justify investments in resilience—especially for older, low-margin products. Targeted incentives and a risk-based regulatory approach are recommended to address this.

She challenged the assemblage to inspire a “Race to the Top,” for example, by recognizing high performers in manufacturing to speed improvements that strengthen supply and reduce cost; creating a regulatory fast track for manufacturers with strong, consistent performance; focusing oversight where it is needed and meaningfully reducing filing requirements and review burden where risk is low.

The second session of Day One introduced the make-buy-invest strategic framework as a structured, flexible method for decision-makers to assess market conditions and determine the most effective interventions. The discussion panel, “Make, Buy, or Invest Criteria – Baseline Conditions,” was moderated by Frankenfeld Lamm. Panelists included Christine Baeder, President, Apotex Inc.; Rachel Haddock, Vice President, Medicine Development and Industrialization, GSK; Michael Ganio, Senior Director, Pharmacy Practice and Quality, American Society of Health-System Pharmacists (ASHP); and Stephen Colvill, Assistant Research Director, Duke-Margolis Institute for Health Policy.

The panel underscored several supports needed to strengthen domestic pharmaceutical manufacturing: expanding the skilled workforce to operate facilities; building capabilities for specialized products and advanced processes; ensuring guaranteed demand for US-made drugs; and providing economic support to offset higher domestic production costs. They also highlighted operational factors that drive success, such as co-locating drug substance (DS) and drug product (DP) operations to reduce lead times and accelerate time to market. Participants noted that purchaser decision-making is currently constrained almost exclusively to price, as other value dimensions—such as quality, advanced manufacturing, and supply reliability—are not meaningfully reflected in the market. This dynamic pushes competition toward the lowest cost rather than toward improvements in quality or resilience. In discussing policy levers, the panel suggested optimizing across the full set of “make-buy-invest” options and aligning incentives with existing tools—for example, mapping efforts to Administration for Strategic Preparedness and Response (ASPR)’s direct investments and CMS payment policies—to better reward reliable supply, quality, and innovation.

Workshop Day Two

The final day of the workshop shifted the discussions from “what should be done” to “how it can get done”—mapping the mechanisms and incentives, system enablers, and actors needed to implement make-buy-invest strategies effectively. The discussions established a baseline understanding of existing levers and incentives that had historically supported pharmaceutical supply chain resilience, while also exploring new or adapted mechanisms aimed at enhancing national security readiness. Participants examined implementation considerations from a national security perspective, including economic viability, workforce preparedness, and value chain transparency. The conversation also emphasized the broader ecosystem of stakeholders—federal and state agencies, payers, manufacturers, and procurement bodies—and identified key areas where leadership, coordination, and investment had been most needed.

Conclusion

At the close of the workshop, the workshop planners extended their thanks to the participants, noting that the workshop benefited from a broad and diverse range of expertise, including groups not traditionally involved. Emphasis was placed on continuing the conversation beyond the event, exploring actionable next steps, and leveraging existing coalitions. Several important topics—such as data obfuscation from national security contexts, workforce challenges in training and retention—were acknowledged as areas for future exploration.

The workshop proceedings will be published by NASEM in early 2026.

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