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FDA assembles policy toolkit to rebuild U.S. generic drug manufacturing

FDA assembles policy toolkit to rebuild U.S. generic drug manufacturing

Rule Changes

Three interlocking programs aim to cut the time, cost, and regulatory uncertainty of building domestic pharmaceutical plants

February 1st, 2026: PreCheck Pilot Opens for Applications; Fee Waiver Proposed

Overview

Updated May 29

Only 9% of the factories making active pharmaceutical ingredients for American medicines are in the U.S.; China and India account for roughly two-thirds. For decades, this arrangement kept drug prices low and went largely unchallenged, until the COVID-19 pandemic exposed how quickly a foreign export ban could empty American pharmacy shelves. The FDA is assembling three programs to reverse this dependency: PreCheck to accelerate new factory buildouts, priority reviews for domestically made generics, and a proposed three-year fee waiver for new domestic plants under the next Generic Drug User Fee Amendments (GDUFA) reauthorization.

Each program addresses a different barrier. PreCheck cuts the five-to-ten-year regulatory timeline for building a new plant. The ANDA prioritization pilot speeds reviews for domestically sourced ingredients and bioequivalence testing, while the fee waiver (FY 2028–2032) would eliminate annual facility fees (up to six figures) for new plants' first three years.

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Key Indicators

9%
U.S.-based API manufacturers
Only 9% of active pharmaceutical ingredient manufacturers supplying FDA-approved products are located in the United States, compared to 22% in China and 44% in India.
7
PreCheck pilot slots
The FDA will select seven facilities for the initial PreCheck cohort, with applications accepted from February 1 to March 1, 2026.
3 years
Proposed fee waiver period
Under GDUFA IV negotiations, the FDA has proposed waiving annual facility fees for three years for new domestic generic drug or API manufacturing plants.
90%+
Generics share of U.S. prescriptions
Generic drugs account for more than 90% of all prescriptions filled in the United States, making domestic manufacturing capacity a mass-market concern.

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People Involved

Marty Makary
Marty Makary
Commissioner, U.S. Food and Drug Administration
Serving as FDA Commissioner; leading onshoring policy efforts

Organizations Involved

U.S. Food and Drug Administration
U.S. Food and Drug Administration
Federal regulatory agency
Implementing three-pronged domestic manufacturing incentive strategy

The federal agency responsible for approving drugs, inspecting manufacturing facilities, and reviewing generic drug applications — making it the central gatekeeper for any onshoring effort.
Civica Rx
Civica Rx
Nonprofit Generic Drug Manufacturer
Building a $140 million sterile injectable facility in Petersburg, Virginia; drugs expected to reach market in 2026

A nonprofit generic drugmaker formed by a consortium of health systems to combat drug shortages, now building one of the first major new domestic injectable manufacturing plants.
Phlow Corporation
Phlow Corporation
Pharmaceutical Manufacturer
Operating under a $354 million BARDA contract to build domestic API and drug production capacity

A Virginia-based company that received the largest-ever federal contract for domestic pharmaceutical manufacturing, tasked with producing essential medicines from raw ingredients through finished dosage forms entirely on U.S. soil.

Timeline

September 1984 February 2026

10 events Latest: February 1st, 2026 · 7 months ago
Tap a bar to jump to that date

  1. PreCheck Pilot Opens for Applications; Fee Waiver Proposed

    Latest Program Launch

    The FDA begins accepting applications for the PreCheck pilot, with a March 1 deadline and seven slots in the initial cohort. Simultaneously, during GDUFA IV negotiations, the agency proposes waiving annual facility fees for three years for new domestic generic drug or API manufacturing plants.

  2. BIOSECURE Act Signed into Law

    Legislation

    The BIOSECURE Act, restricting U.S. government procurement from certain Chinese biotechnology firms including WuXi AppTec and BGI Group, becomes law as part of the National Defense Authorization Act. The law adds legislative pressure to decouple U.S. pharmaceutical supply chains from Chinese companies.

  3. ANDA Prioritization Pilot Launches for Domestic Generics

    Policy Launch

    The FDA launches a pilot program granting priority review to generic drug applications where the finished product, active ingredient sourcing, and bioequivalence testing all occur within the United States.

  4. FDA Announces PreCheck Program

    Policy Announcement

    FDA Commissioner Marty Makary unveils the PreCheck program, a two-phase initiative designed to reduce regulatory uncertainty for companies building new pharmaceutical manufacturing facilities in the United States by front-loading inspections and quality discussions.

  5. GDUFA IV Reauthorization Negotiations Begin

    Regulation

    The FDA holds a public meeting to begin negotiations over the next five-year cycle of the Generic Drug User Fee Amendments, covering fiscal years 2028 through 2032. The current GDUFA III authority expires in September 2027.

  6. Executive Order Directs FDA to Streamline Domestic Manufacturing

    Executive Action

    Executive Order 14293, "Regulatory Relief to Promote Domestic Production of Critical Medicines," directs the FDA to eliminate duplicative requirements, maximize review predictability, and accelerate development of domestic pharmaceutical manufacturing capacity.

  7. Phlow Corporation Receives $354 Million Federal Contract

    Government Action

    BARDA awards the largest-ever federal contract for domestic pharmaceutical manufacturing to Phlow Corporation, tasking it with building an end-to-end U.S. supply chain for essential medicines from raw ingredients to finished drugs.

  8. India Restricts Drug Exports as COVID-19 Spreads

    Supply Chain Crisis

    India bans exports of 26 active pharmaceutical ingredients and their formulations to protect domestic supplies during the pandemic. The move sends shockwaves through U.S. hospitals already facing shortages of antibiotics, anesthetics, and oncology drugs, exposing the fragility of the global pharmaceutical supply chain.

  9. GDUFA I Launches to Clear 3,000-Application Backlog

    Regulation

    Congress authorizes the first Generic Drug User Fee Amendments, imposing fees on generic manufacturers to fund FDA review capacity. At the time, roughly 3,000 generic drug applications sit in an unreviewed backlog, with median approval times exceeding 31 months.

  10. Hatch-Waxman Act Creates the Generic Drug Pathway

    Legislation

    The Drug Price Competition and Patent Term Restoration Act establishes the Abbreviated New Drug Application (ANDA) process, allowing generic manufacturers to rely on existing safety and efficacy data rather than running full clinical trials. Generic prescriptions rise from 19% to eventually over 90% of U.S. prescriptions filled.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

October 2012

GDUFA I and the Generic Drug Backlog Crisis (2012)

By 2012, the FDA had accumulated a backlog of nearly 3,000 unreviewed generic drug applications, with median approval times exceeding 31 months. Congress authorized the Generic Drug User Fee Amendments, allowing the FDA to collect fees from generic manufacturers to fund dedicated review staff. The user-fee model had already worked for brand-name drugs under the Prescription Drug User Fee Act since 1992.

Then

The FDA hired hundreds of new reviewers and began systematically clearing the backlog. By the end of GDUFA I's five-year term, 90% of pre-2012 applications had been reviewed.

Now

GDUFA established the fee-funded review infrastructure that the current onshoring pilots now build upon. It also created the facility fees that the proposed three-year waiver would temporarily eliminate for new domestic plants.

Why this matters now

The GDUFA framework is both the tool and the constraint. The ANDA prioritization pilot works within GDUFA's existing review structure, and the fee waiver is being negotiated as part of GDUFA IV reauthorization. Understanding that the FDA's generic drug review capacity depends on manufacturer-funded user fees explains why the fee waiver is controversial — waiving fees for new entrants means existing manufacturers effectively subsidize their future competitors.

March 2020

India's 2020 Pharmaceutical Export Ban

As COVID-19 spread globally, India restricted exports of 26 active pharmaceutical ingredients and their finished drug formulations to protect its own domestic supply. India supplies roughly 40% of U.S. generic drugs and is itself dependent on China for 70% of its API inputs, meaning the ban simultaneously exposed two layers of American vulnerability.

Then

U.S. hospitals reported shortages of antibiotics, anesthetics, and critical care medications. India reversed most restrictions within weeks under diplomatic pressure, but the episode demonstrated how quickly supply could be cut off.

Now

The crisis catalyzed bipartisan support for pharmaceutical supply chain reform and led directly to the $354 million BARDA contract with Phlow Corporation to build domestic manufacturing capacity.

Why this matters now

The 2020 export ban is the inciting event for the entire FDA onshoring effort. Every program now being launched — PreCheck, the ANDA pilot, and the GDUFA fee waiver — traces its political urgency to the moment Americans realized a single foreign government decision could cause domestic drug shortages.

August 2022

CHIPS and Science Act (2022)

Facing a similar concentration-of-supply problem in semiconductors — with 92% of advanced chips made in Taiwan — Congress passed the CHIPS and Science Act, committing $39 billion in manufacturing subsidies and a 25% investment tax credit to bring chip fabrication back to the United States. The law was a response to COVID-era chip shortages that had shut down auto factories and disrupted electronics production.

Then

Major chipmakers including Intel, TSMC, and Samsung announced over $200 billion in planned U.S. factory investments. The Commerce Department began distributing subsidies in 2024.

Now

The law established a template for industrial policy as supply chain security, demonstrating that direct subsidies and tax incentives can attract manufacturing investment — though whether new plants will be cost-competitive without ongoing support remains unproven.

Why this matters now

The FDA's onshoring toolkit uses regulatory incentives and fee waivers rather than the tens of billions in direct subsidies that the CHIPS Act deployed. Whether the pharmaceutical approach — lighter on funding but tailored to the industry's specific regulatory bottlenecks — can produce comparable results is the central policy experiment.

Sources

(14)
+8
U.S. Food and Drug Administration Federal Register Regulatory Affairs Professionals Society (RAPS) Lachman Consultant Services Fierce Pharma Brookings Institution Think Global Health (Council on Foreign Relations) The FDA Law Blog (Hyman, Phelps & McNamara) PubMed Central BioSpace Pharma Manufacturing U.S. Food and Drug Administration U.S. Food and Drug Administration Fierce Pharma