How COVID-19 Has Affected the US Pharmaceutical Industry


Sarah Peddie

The United States of America is one of the hardest hit countries by the coronavirus pandemic with the highest number of cases and highest death toll worldwide. Along with the high figures, the healthcare system has been greatly affected by the virus and many hospitals and clinics are struggling to stay in business as funds are low. 

Currently, the USA now has over 1.8 million cases of coronavirus and over 108,000 deaths (as of 3 June) but is the hardest hit in the east coast of the country.

The coronavirus pandemic has hit the American healthcare system in many different ways. A lot of workers have lost their jobs and hospitals have had to close down due to cancellation of elective procedures that they rely on to make money. However, the pandemic has also caused a stir in the pharmaceutical industry as well.

We take a look at how the pharmaceutical industry has been impacted by the coronavirus pandemic. During the outbreak lawmakers have called on drug makers to manufacture medicines in the US and to stop sourcing the ingredients from China. Congressional leaders have argued that the country’s reliance on drugs made outside of the US has raised a security issue. This coincides with the White House working in a “Buy American” executive order which would require Government agencies to buy American medical products and the order could eventually include pharmaceuticals. The public has also placed pressure on drug companies to develop a vaccine.

On 19 May, the Trump administration announced it had signed a $354 million four-year contract with the company Phlow Corp. in Virginia to manufacture medicines and pharmaceutical ingredients that are needed to treat Covid-19 but are made mostly in China and India. The contract awarded by the Biomedical Advanced Research and Development Authority may be extended for a total of $812 million over 10 years - which makes it one of the largest awards in the authority’s history. 

The Pharmaceutical Research and Manufacturers of America (PhRMA) who are the industry’s biggest lobbying group has rejected congressional support for a change in the supply chain. This is because manufacturing in the US would cost a lot more compared to cheaper wages and lower cost abroad that they could just not compete with. It would also upset the balance within the supply chain already there. Pharmaceutical companies are now under severe pressure from the American Government to produce drugs nationally but many think it’s just not possible. 

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