The only American maker of generic antibiotics wants the government to buy local

Caption

USAntibiotics is the only U.S. manufacturer of amoxicillin and amoxicillin clavulanate, commonly known as Amoxil and Augmentin.

Credit: USAntibiotics

USAntibiotics can’t compete with China and India on drug costs for generic antibiotics, CEO Rick Jackson said.

They’re now asking for the federal government to support them by purchasing the drugs produced here in the U.S. for their own stockpiles.

"We're not asking the federal government to subsidize us or give us money," he said. "We're asking them to simply purchase what they're purchasing now from us."

The life-saving medication is crucial to public health and global trade, Jackson said, but the people who buy these drugs for pharmacies are only looking for the lowest price.

"They don't care where it's made, and and from a free market standpoint, that's OK," Jackson said. "But here's the problem: In 2018, the Chinese told the U.S., 'You cannot win a trade war with us because we make 100% of your antibiotics. Any questions?'"

The U.S. Food and Drug Administration currently lists liquid amoxicillin, which is typically prescribed to children for ear infections, in its database of drugs experiencing a shortage driven by increased demand.

The penicillin antibiotic Amoxil has been used since 1972 to treat bacterial infections, such as chest infections (including pneumonia) and dental abscesses.

After GlaxoSmithKline's patent on amoxicillin expired in 2002, the medication became generic, meaning the FDA no longer requires clinical (human) studies to demonstrate safety and effectiveness. Manufacturers have to submit scientific evidence that the active ingredient is the same.

Many American facilities went bankrupt, and the number of generic drug-making facilities in the United States dropped about 20% since 2018, according to federal data.

"They went to India, Austria, you know, China and so forth," Jackson said. "Mexico and other places with cheaper labor started making it."

Jackson said he invested millions of dollars to purchase and improve the plant in Bristol, Tenn., because he wanted to ensure the country could supply its own antibiotics.

"It was in Chapter 11 when we found it," he said. "That's the reason we bought it. It was to save it."

If we have a problem with another country and they don't buy from us or they sell to somebody else, then that becomes a huge security problem for health care in the United States, Jackson said.

USAntibiotics began production in 2022 and currently produces about 1 million doses of amoxicillin each month, but the company is barely breaking even financially. That's because buyers typically pay $5 for a common 30-pill amoxicillin pack before marking it up more for patients, but manufacturers overseas have lower labor and production costs.

The Bristol plant’s production costs amount to about $4 per unit, which isn’t enough to pay for overhead and other facility costs, Jackson said. To break even, USAntibiotics must double its commercial sales — or line up the U.S. government as a customer.

In a survey of thousands of pharmacists, less than 10% knew that there was only one facility in the United States that made amoxicillin, and Jackson said that's true of many in Congress.

"There is a sense that we have to encourage and do something to make sure that the critical drugs, like antibiotics, are made in the U.S. so that we don't have a supply chain problem," he said.