© REUTERS/Jason Lee (CHINA BUSINESS HEALTH)A technician works at a product line of the Inactivated H1N1 Influenza Vaccine in Sinovac Biotech Ltd., a Chinese vaccine making company, in Beijing, September 3, 2009.
Last month, the U.S.-China Economic and Security Review Commission held a
hearing on the United States' growing reliance on China's pharmaceutical products. The topic reminded me of a spirited discussion described in Bob Woodward's book,
Fear: Trump in the White House. In the discussion, Gary Cohn, then chief economic advisor to President Trump, argued against a trade war with China by invoking a Department of Commerce study that found that
97 percent of all antibiotics in the United States came from China. "If you're the Chinese and you want to really just destroy us, just stop sending us antibiotics," he said.Cohn's words highlight a security concern associated with pharmaceuticals from China. As Rosemary Gibson noted in her testimony, centralization of the global supply chain of medicines in a single country makes it vulnerable to interruption, "whether by mistake or design." If we are dependent on China for thousands of ingredients and raw materials to make our medicine, China could use this dependence as
a weapon against us. While the Department of Defense only purchases a small quantity of finished pharmaceuticals from China,
about 80 percent of the active pharmaceutical ingredients (APIs) used to make drugs in the United States are said to come from China and other countries like India. For example, the chemical starting material used to make doxycycline, the recommended treatment for anthrax exposure,
comes from China. When an influential Chinese economist earlier this year
suggested that Beijing curb its exports of raw materials for vitamins and antibiotics as a countermeasure in the trade war with the United States, the worries surrounding our API dependence to China seemed to be vindicated. Concern about a disruption in the supply chain could explain why the tariffs on Chinese products proposed by the United States Trade Representative in
May 2019, worth approximately $300 billion, excludes "pharmaceuticals, certain pharmaceutical inputs, and select medical goods."
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