In Dependence Day … on China
Washington, July 2, 2023
On this Independence Day, it is worth reflecting on the profound vision that our Founding Fathers had for our country. In addition to the freedom they had so recently secured, George Washington hoped that some day the United States would “become a storehouse and granary for the world.” The founders of this country envisioned a nation that was capable of producing its vital needs for itself. Washington’s words were more than prophetic – our country is one of very few in the world that is blessed with agricultural, mineral, and land resources beyond measure.
Reflecting on the vision our Founding Fathers had for the United States, our growing dependence on China becomes all the more disheartening.
We face a perilous situation where American citizens and our military rely on China for everything from pharmaceuticals to personal protective equipment to medical devices. If you had told me when I was a surgeon serving in Iraq that the personal protective equipment (PPE) I relied on to protect me, and the medications needed to serve our troops, had been manufactured in China, I would have asked, “How did we allow ourselves to get here as a country, especially our military?” We import everything from tongue depressors to hip and knee replacements, speculums, surgical gowns and exam gloves, wheelchairs, pacemakers, pulse oximeters, dental implants, surgical screws, and diagnostic imaging equipment like MRIs and CT scanners from China.
During the Coronavirus pandemic, the N-95 masks delivered to Congress under House Speaker Nancy Pelosi were manufactured in China. And our dependence goes far deeper than that. The vulnerability of our supply chains means that our country is functionally dependent on China for our most critical health security needs.
Many of the name brand and generic medications that millions of Americans rely on every day, from antibiotics and blood pressure medicines, to cancer drugs and blood thinners, are being manufactured in China, or rely on materials that come from China.
Before drugs arrive at pharmacies, they begin as active pharmaceutical ingredients (APIs.) Unfortunately, the FDA does not track detailed data on imports of active pharmaceutical ingredients, leaving us in the dark on the extent of our vulnerability. It is clear, however, that China’s influence over global API supply chains provides them troubling leverage over finished drug manufacturers, even those located outside of China. For example, in 2020 a state-run newspaper suggested that Beijing should leverage its exports as retaliation in the US-China trade war. While eighty percent of the active ingredients in medicines come from China and India, according to industry newsletters, Indian companies rely on China for 80 percent of their raw material, according to Rosemary Gibson and Janardan Prasad Singh, the authors of China Rx; and it is estimated that if China stopped producing these materials, the United States would have just two months until we run out of the drugs our patients rely on.
Worse yet, the FDA has limited ability to enforce quality control or conduct inspections within China, and cannot enter manufacturing plants in China unannounced. There have been several cases where inspectors found sub-par conditions at sites as well as quality control problems, like medications which did not always contain the correct amount of active ingredients or dissolve at the correct rate.
The weakness of our supply chain is contributing to the worrisome drug shortages we are currently experiencing.
How did the United States end up in this position? For decades, China crafted a strategy to push competitors out of the global market through a system of exploiting China’s cheap labor and selling pharmaceuticals below market cost. China could do this because its government controls the market.
The case of penicillin provides one example to illustrate the point: In 1990, a plant in Connecticut was producing enough penicillin to supply one-third of America’s needs. But by 2008, the plant had completely closed. In 2004, the last plant in the U.S. making the raw material for penicillin was closed in East Syracuse, N.Y. Today, pharmacists fill prescriptions for penicillin with essential ingredients sourced from China. China undercut their competitors by dumping low-cost penicillin on the market. ￼After China had obtained a substantial share of the global market, they raised prices on penicillin, a strategy China employs over and over again with several different vital pharmaceuticals.
To prepare for a celebration of the founding of the People’s Republic of China planned for 2049, China has begun rolling out its “Made in China 2025” campaign to bolster its domestic pharmaceutical supply and other industries. China's goal is to achieve “self-sufficiency in critical high-end materials, high-end medical devices, and patented pharmaceuticals,” reports the Institute for Security and Development Policy. China has consistently used non-market and anti-competitive practices to increase its market share in key sectors, such as the production of critical minerals.
As China continues the push to dominate supply chain, it is vital that we work to create a strategic long-term approach of our own. Congress and the White House should work together to examine the challenges companies face when it comes to domestic manufacturing and enact the policies needed to solidify a resilient domestic supply chain. Reliable domestic sources for our medical supply chain are critical for the health and well-being of our country and our national security needs.
Last Congress, I introduced the American Made Medicine Act, a bill to help secure our health supply chains. This legislation would help create manufacturing jobs here in the U.S. by offering tax credits for investments in medical manufacturing. Health care professionals need a reliable source for personal protective equipment (PPE) and pharmaceuticals – not one that can be cut off by an enemy at any moment. I look forward to reintroducing this important legislation in the 118th Congress.
We need to look pragmatically at ways to incentivize domestic manufacturing of everything that goes into the production of the vastly important and complex components of our health: from our pharmaceuticals, to PPE, to medical devices. These are a vital part of our national security and should be viewed as strategic assets. They are critical to saving lives; and we therefore must rethink how we source them and act accordingly. Privately, some are stepping up efforts to ensure that producers exporting to the U.S. follow strict quality control measures. We also must and can diversify production so that we are not solely reliant on strategic adversaries for products which are key to our national health security.
Because our medicines and pharmaceuticals are so vital to our national security, let’s put in place more robust data reporting and oversight requirements for imports of key medical products. We currently lack complete data on the sourcing for our medicines, APIs, drug supply or other critical medical supplies. Especially in the aftermath of the COVID-19 pandemic, this is an oversight that we cannot continue to ignore.
As we reflect on the vast richness and blessings our country has afforded us this July 4th, we must do our part to keep alive the Founders’ vision of an independent United States. We cannot let the threat of the Chinese Communist Party and its influence over our supply chains threaten to impair our freedom and our ability to live in this land of amber waves of grain and purple mountain majesty.