Did Trump Just Create An Antibiotic Supply Chain In The U.S.?

By Louis Garguilo, Chief Editor, Outsourced Pharma

We recurrently discuss the efforts to create a reliable supply chain, let alone one solely within the U.S., or for a common antibiotic we haven’t manufactured here for decades.

I seriouly doubt any of us thought this all could be accomplished in part by the stance of a U.S. president.

In 2022, we had headlines such as: FDA Declares Nationwide Amoxicillin Shortage. 

Pharmacies scrambled for supply; concerned parents searched for liquid formulations to treat their children. The episode underscored the constant peril of relying on China, India, or any other nations, for any of our basic medicines.

Now three years later a homegrown manufacturer — USAntibiotics of Bristol, Tennessee — says it can cover America’s entire demand under a new arrangement with two titans of distribution and retail: McKesson and Walmart.

The other “titan” is Trump.

Now in the first year of his second term, he’s still hammering away at the biopharma industry to “bring it all back.” He’s passed favorable business-tax legislation; signed executive orders and directed the government to peel back regulatory barriers to domestic manufacturing.

Critics may scoff at the Trumpian influence. (More scoffing in a moment.)

Yet after decades of Washington issuing white papers on “reshoring” pharmaceuticals, convened blue-ribbon panels, and attempting to pass controversial bills such as the BIOSECURE Act, we have here a nationally newsworthy, tangible supply-chain outcome.

In a press release, USAntibiotics President Patrick Cashman described the McKesson and Walmart partnership in terms that transcend commerce: “This collaboration represents more than a business relationship — it's a commitment to America’s health security.”

Although it sounds like the White House could have written that, to be perfectly clear USAntibiotics does not mention Trump in the press release. (Neither McKesson nor Walmart have of yet issued releases.)

According to USAntibiotics, the United States could soon produce 100% of its needs for amoxicllin, the most widely prescribed antibiotic in the country. And as alluded to above, this is a go-to drug for treating childhood infections, as well as pneumonia and other bacterial ailments.

To be clear, USAntibiotics says it will import the active pharmaceutical ingredient (API) from sources in Europe (and explicitly not from China or other areas).

For an industry defined by complex, globalized supply chains, this development is in fact symbolic of what can be accomplished.

For Trump, make no mistake: it’s a policy win, engineered as much through rhetoric and pressure as through formal executive action.

Since returning to the White House, the president has put our drug development and manufacturing industry on the front pages.

He’s just done it again.

USAntibiotics, Walmart and McKesson Step Up

The Arkansas-based retailer has pledged to invest $350 billion in U.S.-sourced products by 2030.

McKesson, meanwhile, is one of the few entities with a distribution network vast enough to guarantee national availability. Partnering with a single, relatively small manufacturer in Tennessee might otherwise appear risky; McKesson’s involvement makes it viable.

We may not cover this aspect in detail at Outsourced Pharma, but start-to-end supply chain transformation depends as heavily on distributors and buyers (or patient access) as on your CDMO selection (which we do cover extensively).

Back to the potential “scoffing” mentioned above. We should not throw skepticism out with this new antibiotic euphoria.

First off, we need to consider whether this is a sustainable drug-production model.

Producing 100% of America’s amoxicillin would certainly register as impressive, but the economics are challenging. Domestic production costs have traditionally and stubbonly been higher than those overseas. Local, state, and federal building and regulatory compliance is also a concern. So is finding and maintaining a reliable workforce.

USAntibiotics does seem to have the formula to succeed, though. It has been in business since 1978. It boasts of 394,000 square feet of operations space, and in fact is designated by the Department of Homeland Security as a critical manufacturing infrastructure facility.

Turning to Walmart and McKesson, one wonders if they would have signed on without Trump in the White House. Will they sustain the deal if future administrations shift priorities? Or if profitability does not find its way onto the balance sheets?

There will always be the (not unreasonable) cynic who will think we’ve seen this movie before – government and industry announce bold plans that fade away over time.

That noted, I’d suggest this feels real-word sustainable. The combination of Walmart and the largest medical distributor in McKesson, and Trump’s tenure until 2028, can set a template for other biopharma production and distribution deals.

And consider: If successful, this makes it harder for others to justify continued reliance on foreign suppliers.

But having said that (and more), we can’t ignore that single sourcing carries with it serious supply-disruption risks. Can we find a second source to back up USAntibiotics production?

Perhaps that’s when we’ll know we have arrived.

A CDMO perspective

For Outsourced Pharma readers keying in on CDMOs, we have some interesing applications here.

First, we have at the least proof of concept that it is possible to stand up a fully domestic supply chain of a drug, even a critical generic.

Second, it continues to be essential for us to stay up on the political head- and tailwinds blowing from the Trump administration.

Tariffs, deregulation, strong-arming, and the like will continue – and so will new outcomes.

This editor’s “Trump vs. Pharma?” series has covered all of this, and I will continue to do so.

For today, the symbolism of “Antibiotics Made in America” is indeed powerful.

We’ll see if this amoxicillin deal proves a first brick in a rebuilt domestic foundation, or if it ends up standing out as a solitary stone.

Hopefully, for years to come, Americans will go into their local Walmart (or elsewhere), pick up a prescription of amoxicillin, and know it was manufactured in Bristol, Tennessee (or elsewhere in the U.S.).

We may even look back favorably on the president’s claim of: “I told you so. I could bring it back. And we did.”​