China’s Stranglehold On Pharmaceuticals Threatens Americans’ Health And U.S. National Security

As the cases of the Wuhan coronavirus (formally 2019-nCoV) continue to increase, and China and other countries aggressively perform screening, isolation, treatment and tracking of patients’ contacts, demand for various essential medical items is unprecedented, and shortages have been reported. For example, American dentists, who go through large numbers of surgical masks daily, are already finding their supply chain interrupted.

Ironically, most of the world’s supply of masks and respirators, along with other materials essential for health care, comes from manufacturers in China. That creates a vulnerable link in the global supply chain that supports everyday health care in hospitals around the world. However, those problems could pale if shortages spread to the pharmaceutical sector: China has become the world’s largest producer and exporter of the essential “active pharmaceutical ingredients” (APIs) used in the manufacture of drugs, not only in China but also in other countries, including the United States. 

Most of the medicines that Americans take — as much as 90% — are generic drugs that are manufactured abroad. 

APIs in China are currently produced without sufficient quality control to ensure drug safety and efficacy, according to the findings of a report late last year from the U.S.-China Economic Security Review Commission, which was established by Congress in 2000 when China was permitted to enter the World Trade Organization.

The report’s major points include:

• China is the world’s largest producer of APIs, and the U.S. is heavily dependent on drugs that either come from China in finished form or from APIs sourced there.

• Because drug companies are not required to list the country of origin for APIs on drug labels, “U.S. consumers may be unknowingly accepting risks associated with drugs originating from China.”

• The Chinese government promotes and protects the nation’s pharmaceutical companies to the disadvantage of foreign competitors, as it does in other sectors, such as chemicals, electronics, and telecommunications. 

• There are thousands of drug manufacturers in China, and the government’s regulatory apparatus has insufficient resources to oversee them. Not surprisingly, it is ineffective, and failures of data integrity and drug safety scandals are common. In 2016, the China Food and Drug Administration investigated 1,622 drug clinical trial programs and rejected 80% of these applications after it found evidence of fraudulent data reporting or submissions of incomplete data, among other problems. (In the U.S. and Europe, the percentage would be in single digits.)

• The deficiencies in regulatory oversight of Chinese manufacturing also extend to the U.S. FDA. The report observed that the FDA deploys far too few inspectors to China for the large number of manufacturers there. 

The report’s conclusions are stunning.        

First, “[b]ecause of U.S. dependency on China as a source of many critical drugs, banning certain imports due to contamination risks creating drug shortages in the United States.” Even in the absence of such bans, as of the beginning of December there was a shortage in the U.S. of 116 drugs, many of which are important and commonly used here. As a result, U.S. hospitals and EMTs must resort to second- or third-line medicines, because many drugs are produced only by a very limited number of foreign manufacturers.

Second, “[a]s a result of U.S. dependence on Chinese supply and the lack of effective health and safety regulation of Chinese producers, the American public, including its armed forces, are at risk of exposure to contaminated and dangerous medicines.”

Third, “[s]hould Beijing opt to use U.S. dependence on China as an economic weapon and cut supplies of critical drugs, it would have a serious effect on the health of U.S. consumers.” And not only U.S. consumers: If China were to block or slow supplies of common, essential drugs, such as those to treat hypertension, high cholesterol, pain, stroke, cardiac disease, infections, pain and so on, morbidity and mortality would skyrocket worldwide – in effect, cause a policy-induced pandemic. 

Complementing the findings of the Commission, a Government Accountability Office report released on Dec. 10, 2019, found that the FDA is not completing enough foreign drug inspections, cannot hire enough inspectors, and provides up to 12 weeks advance notice for some overseas inspections. “We have long-standing concerns about FDA’s ability to oversee the global supply chain, a High Risk Series issue for 10 years,” it concluded.

In summary, quite apart from the threat of disruption caused by the coronavirus outbreak, this is a prescription for disaster. 

To address the threats it identified, the Commission’s report made several recommendations, which focus on congressional actions, including:

First, Congress should hold hearings to assess: (1) the capacity of the U.S. pharmaceutical industry to meet domestic demands; and (2) the extent of the United States’ dependence on Chinese pharmaceuticals and active pharmaceutical ingredients; and (3) the ability of the U.S. FDA to guarantee the safety of such imports from China.

Second, Congress should direct the Government Accountability Office to prepare a report on the U.S. FDA’s ability to conduct inspections of Chinese drug manufacturing facilities.

Third, Congress should pass legislation that would require drug companies to “list active pharmaceutical ingredients and their countries of origin on labels of imported and domestically produced finished drug products”; and that would create a “risk-based system making importers of active pharmaceutical ingredients (APIs) and finished products liable for any health risks incurred by consumers in the event the product is proven unsafe.”

Fourth, Congress should require Medicare, Medicaid, the U.S. Department of Veterans Affairs, the U.S. Department of Defense, and other federally funded health systems to buy pharmaceuticals only from domestic or foreign FDA-certified production facilities (unless the FDA finds that a specific drug is not available in sufficient quantities from such sources).

The disruptions from Wuhan coronavirus outbreak are a reminder that the benefits of globalization of the production of vital medicines should not be compromised by reliance on a single, potentially unreliable source. The Commission’s proposed sweeping changes are the minimum necessary to protect the health of Americans.

Miller, a physician and molecular biologist, is a senior fellow at the Pacific Research Institute. He was the founding director of the FDA’s Office of Biotechnology. Cohrssen, an attorney and psychologist, served in senior positions for White House agencies, including the office of the vice president. He also was minority staff director of the Aging Subcommittee of the Senate Health, Education, Labor, and Pensions Committee and counsel for the House Energy and Commerce Committee.