F Ford Motor Company

By Rachael Levy 

WASHINGTON -- President Trump is expected to sign an executive order on Thursday to help increase production of essential medicines, medical equipment and protective gear in the U.S., his trade adviser Peter Navarro said.

"If we've learned anything from the China virus pandemic...we are dangerously overdependent on foreign nations," Mr. Navarro said on a conference call with reporters on Thursday morning, referring to the coronavirus pandemic.

The order includes a "buy American" requirement for government agencies such as the Department of Health and Human Services, Department of Veterans Affairs and the Defense Department, Mr. Navarro said. Mr. Navarro said the requirement would help establish demand for investment in the manufacturing process.

The order would be the latest in a series of moves by the Trump administration aimed at boosting domestic production of medicines and medical equipment to ease the country's reliance on foreign supply chains dominated by China.

Mr. Navarro declined to estimate a percentage amount of production the administration is seeking to bring to the U.S. "But at a minimum, we need to have enough production to deal with pandemics or CBRN threats," he said, referring to chemical, biological, radiological and nuclear risks. "We are a long ways from that, but we can move in Trump time, which is to say as quickly as possible."

Mr. Navarro said the order will require deregulation, including a provision for the Environmental Protection Agency administrator to streamline processes for the development of advanced manufacturing facilities.

He said the EPA and the Food and Drug Administration "can make a very significant difference in terms of reducing the time to production and therefore the cost of production."

Mr. Navarro said the plan would keep drug prices down by creating economies of scale and reducing waste, including through continuous manufacturing techniques.

The plan comes as a proposal to lend $765 million to Eastman Kodak Co. has drawn scrutiny. The loan, announced last week, would help the onetime photo giant produce drug ingredients from the U.S.

The Wall Street Journal reported earlier this week that the Securities and Exchange Commission is investigating the circumstances around Kodak's announcement, and lawmakers are seeking records about the plan.

Mr. Navarro declined to answer a reporter's question about Kodak on the conference call, saying he would prefer to stay on the topic of the executive order.

China is the world's biggest supplier of the raw materials -- known as active pharmaceutical ingredients -- that form the basis of medicines. That dependence on China makes shortages more likely should Chinese manufacturing be shaken, according to a 2019 U.S. government report. China's dominance is growing: The U.S. imported $3.9 billion of pharmaceutical raw material from China in 2017, an increase of nearly one-quarter from the prior year, according to IHS Markit.

Mr. Trump has also put pressure on manufacturers to help bolster health-equipment supplies and ease a reliance on China for emergency medical equipment.

General Motors Co., Ford Motor Co. and others in the auto industry stepped up efforts in late March to use their factories and manufacturing expertise to help build supplies of medical gear, including ventilators, respirators and face masks.

GM and Ford, in particular, have carved out space in auto plants to set up assembly lines and are using existing workers and suppliers to aid in production, which aims to feed not only national stockpiles but also hospitals and medical facilities.

GM, working with medical device maker Ventec Life Systems, in April pledged to make 30,000 ventilators for the national stockpile under a $489.4 million contract with the Department of Health and Human Services. Ford is also working with General Electric to produce 50,000 ventilators for the U.S. government under the Defense Production Act.

Mr. Trump criticized GM early on in the pandemic for not moving fast enough to convert factories for wide-scale ventilator production. GM said at the time its efforts were already well under way.

Write to Rachael Levy at rachael.levy@wsj.com

(END) Dow Jones Newswires

August 06, 2020 12:14 ET (16:14 GMT)

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