Regulatory and Manufacturing Reforms Can Improve Medication Access in the US

By Monet Wright

In the US, drug shortage and price issues have resisted contemporary resolution measures pursued by the government. What’s holding us back?

High Prices & Drug Shortages in US Pharma

Beyond the contemporary inefficiencies that threaten public health as a whole, many patients in the United States dependent on pharma-distributed medications have, for the last few years, faced a drug shortage crisis. As of March 2025, 270 medications are in active shortage, a number just shy of the record-setting peak of 323 active shortages in the first quarter of 2024. While shortages are a global challenge, they remain a particularly persistent problem in the US, eroding popular trust in public health and weakening the nation’s ability to respond to biological threats, pandemics, and other catastrophic events.

Moreover, high drug prices–an issue compounded and, in part, caused by drug shortages–pose another prominent challenge to beneficiaries of US healthcare. A Department of Health report found that US drug prices were 2.78 times higher across all medications when compared with other countries in 2022, a discrepancy persisting in 2026 to create significant financial barriers to care for US patients.

What factors contribute to high drug prices and drug shortages? One study of drug shortages in high-income countries found a wide host of causes, citing “manufacturing issues, fluctuating demand and market forces, poor supply chain management, political and strategic decisions, and external influences,” while also noting that “several studies emphasized that causes remain unknown.” Another study focusing on high drug prices notes that greater costs reflect the profit-maximizing business model employed by domestic pharmaceutical companies at patients’ expense. Long-term efforts to make medications more accessible and affordable must therefore consider these factors while working to strengthen the US pharmaceutical industry as a whole.

Drug shortage and price issues have resisted contemporary resolution measures pursued by the government. What’s holding the US back from healthcare reform to improve medication access? To answer that question, I examine challenges to current policy solutions as well as key causes of crisis to suggest future directions to improve public health. I focus on two specific areas for reform–the US patent system and offshore supply chain vulnerabilities. Reforming these areas will help create a healthcare system that Americans can trust and will improve the position of the US pharmaceutical industry on the global stage.

Prioritizing US Patients by Fighting Patent Abuse  

A major driver of high prices and shortages is the exploitation of the US patent system by large pharmaceutical corporations, which presents unique challenges to reform measures given the importance of strict intellectual property (IP) protections to innovation and competition.

The Commonwealth Fund articulates pharmaceutical patent exploitation as the practice by large, dominant brand-name drug producers of a host of strategies such as reverse payment settlements, product hopping, and particularly patent evergreening and patent thicketing, to maintain monopolies on the particular medication(s) they produce at the expense of smaller generic drug companies (the distinction between brand-name and generic pharmaceutical firms is discussed at greater length below).

Reverse payment settlements occur when brand-name producers make agreements with generic producers to settle patent disputes via a payment from the former to the latter to keep generic medicines out of the market, whereas product hopping is the strategic discontinuation of a brand-name drug before generic entry in order to switch patients to a new patent-protected version of the brand drug.

Patent evergreening and thicketing essentially involve filing large numbers of patents on brand-name pharmaceutical products and similar products with various modifications to make it extremely difficult for potential competitors to sell alternatives due to the difficulty of bypassing intellectual property law.  This discourages competition from generic firms, keeping net drug supply in the market low and prices high, thus driving shortages and unaffordability that benefit brand-name producers at the expense of consumers–when generic competition exists, prices are often 80-85% less.

Towards the end of 2025, the Trump administration attempted to combat high prices by proposing nine agreements with major brand-name pharmaceutical companies to lower prices through “most-favored nation pricing” via a platform dubbed TrumpRx. The announcement enumerates specific cost reductions that lower the prices of participating companies’ products by on average 50%. However, scholars such as Harvard professor Ameet Sarpatwari argue that the average consumer will likely not benefit from this deal, given that reductions mainly aid those with health insurance such as Medicaid, who already pay relatively low drug prices, rather than patients without insurance, who may still stand to face high costs for newly-“discounted” medication due to high drug list prices.

Moreover, the government’s continued focus on maintaining partnerships with brand-name drug producers raises concerns that the administration is still favoring such companies, helping entrench their monopolies even despite price reductions–and may even stimulate further patent abuse to make up for forced cost cuts. In the same vein, these measures also do not attempt to reform the patent system that prevents generic competition/allows brand-name IP exploitation in the first place, the reform of which is another widely-suggested solution by policymakers.

However, the very qualities that allow brand-name companies to exploit the US patent system for pharmaceuticals also play an important role in facilitating innovation and insuring the industry remains robust and internationally influential: a Center for Strategic & International Studies article writes that “a broad assault on patents may well damage the very features of the innovation system that make possible the collaboration needed to produce innovative drugs, medical devices, and other therapies that improve well-being.”

This places the US pharmaceutical industry at  a global competitive disadvantage, while China’s pharmaceutical industry is growing rapidly due to sweeping regulatory reforms and injections of capital, challenging American dominance in the industry.  Artificially lowering drug prices has a similar effect on dampening pharmaceutical innovation and weakening the position of the US pharmaceutical industry, another concern expressed in response to the Trump administration’s actions. Thus, it is imperative to balance these complexities when attempting to address patent reform.

Addressing the Vulnerabilities of Offshore Drug Manufacturing

Regarding the supply-side of US pharma, additional challenges also require policy action to improve domestic drug accessibility–primarily, strengthening vulnerable offshore supply chains.

To understand the manufacturing challenges caused by these supply networks, it is imperative to recognize distinctions in production within brand-name and generic US pharmaceutical manufacturing firms. These firms fall into two categories, producers of brand-name medicines and producers of generic/biosimilar medicines, which each have different supply chain structures.

Although brand-name and generic medications are equivalent in quality and producers of both rely on offshore manufacturing to a certain extent, brand-name pharmaceutical firms have invested far more capital over time into diversifying and strengthening their production networks, and thus continue to enjoy relatively stable manufacturing despite foreign elements.

Conversely, generic medicines, which make up approximately 90% of drug prescriptions but less than 15% of total drug spending given their comparatively low cost, are “highly reliant on cost-competitive Chinese production for active pharmaceutical ingredients and India for significantly lower manufacturing costs” according to the Center for Strategic & International Studies. Generic production networks are therefore particularly prone to disruptions, as highlighted by crises such as the COVID-19 pandemic, certain geopolitical risks/strategic dependencies, and economic competitive pressure from other countries. 

Thus, vulnerabilities associated with generic medicine production directly contribute to shortages and high drug prices given the position of said medications in the domestic drug market. As such, targeting these weaknesses is imperative to facilitating stable manufacturing infrastructure, which has thus far largely taken shape through efforts to move US pharmaceutical manufacturing onshore and stimulate domestic drug production–indeed, “increasing domestic pharmaceutical manufacturing has emerged as a bipartisan strategic priority.”

In alignment with this, President Trump signed an executive order in August of 2025 directing the Department of Health to identify and stockpile Active Pharmaceutical Ingredients (APIs) for the most critical medicines under the Strategic Active Pharmaceutical Ingredients Reserve (SAPIR) that he created in his first term, which will increase the domestic supply of important ingredients for drug manufacturing.

Along with stockpiling initiatives, the administration has also imposed pharmaceutical tariffs on any branded drug product “unless the company is building its pharmaceutical manufacturing plant in America” to discourage foreign production, part of a broader effort to domesticize production by US industries. While stockpiling may be helpful in the short run, it’s less sufficient at targeting the root causes of shortages, which other domestic policy moves may serve to worsen–and the efficacy of tariffs remains in question. 

Given that supply chain vulnerabilities are mostly exclusive to non-branded generic medication manufacturing, the tariff policy’s focus on producers of branded drugs seems unlikely to be effective at stabilizing production where it matters. Experts similarly caution against levying tariffs as well as stockpiling within the context of broader changes in the US public health system.

According to senior advisor at CSIS, Charles Wessner, “many, if not most” of the challenges posed by supply vulnerability “cannot be met by the imposition of tariffs,” and moreover the “limitations and risks are manifest.” He cites a Yale study indicating that just a 25% tariff would be projected to increase medication costs by over $600 a year for US households, effectively eclipsing any positives of potentially strengthening manufacturing for consumers. 

Moreover, Global Biodefense writes that while “stockpiling APIs may help buffer short-term disruptions…these measures stand in stark contradiction to broader policy shifts. At the same time the Administration is emphasizing stockpiling, it is weakening biomedical investments and rescinding Biden-era directives intended to reduce drug costs.” The government is also “cutting funding for FEMA’s emergency response capabilities, state public health grants, and key agencies like ASPR, CDC, and NIH…[undermining] the very infrastructure needed to respond to and recover from drug shortages and health emergencies.” Ultimately, the assertion remains that “the US cannot stockpile its way out of structural fragility.” 

Based on these considerations, it seems evident that while domesticizing drug production would eliminate significant weaknesses inherent to offshore supply, any initiatives to stimulate at-home manufacturing should be concentrated on generic producers–and should not be pursued through the imposition of tariffs.

Suggested Future Policy Directions

It is therefore critical to strike a balance between encouraging innovation and maintaining a positive market environment for large firms to ensure the growth of US pharma, and protecting the means of production and entry for small firms to preserve consumer accessibility and affordability. Future policy directions aimed at solving shortages and high prices should thus emphasize these priorities, and attempt to mitigate concerns associated with the flaws of current solution measures.

In order to bring prices down, one suggestion for the administration could be to move away from continuing to facilitate monopolies through agreements with large brand-name producers, and instead focus on policies that make it easier for generic drug producers to enter the market and compete, paired with price-setting practices to artificially lower high drug costs either via government imposition, common in many other countries, or agreements that incorporate more of the market.

Furthermore, since reforming the patent system to be less stringent would likely negatively impact innovation and competition, efforts to address patent abuse should focus on preventing exploitation strategies such as evergreening by imposing regulations that cap the number of patents filed by pharmaceutical companies, or banning practices meant to exclude smaller firms such as reverse payment settlements. 

As for shortages associated with supply chain vulnerabilities, the government could take a similar small firm-focused approach by subsidizing the diversification of supply networks, or pursue agreements with other countries to reduce weaknesses caused by geopolitical risks or competition. The US and Europe recently reached a landmark accord standardizing the different regulations on drug development and production between the two regions–referred to as regulatory divergence–in order to open up domestic markets to pharmaceutical firms in both regions, strengthening the industry and facilitating competition.

The US government should continue stockpiling initiatives, since although stockpiling only provides a short-term solution and doesn’t actually address issues with supply, having important ingredients available domestically is beneficial to reducing the negative impacts of shortages. These and other policies will prioritize positive pharmaceutical reform, and ensure that American patients have access to a comprehensive and reliable healthcare system.