Outsourcing U.S. Drug Manufacturing to China was a Mistake—A Lethal One | Opinion

Most products we use include a country-of-origin label, from your Costa Rican fruit to Ethiopian coffee to even your Canadian car doorframe. Unsurprisingly, many of these goods sport the "Made in China" label.

While the American public and political leaders have long lamented the exodus of American manufacturing overseas, rarely has it put us in mortal danger. But the COVID-19 pandemic shows how the departure of one specific sector—pharmaceuticals—has left the U.S. dangerously exposed, at a fearsome cost. It has literally cost us lives. The U.S. Government and private industry need to immediately recognize this problem and join together to create a new plan to build and protect manufacturing of life-saving medication domestically.

The problem has long been gestating. Drug manufacturing has largely moved overseas—mostly to China and India—leaving few drug ingredients or finished drugs produced here. Even of those finished drugs that are produced here, estimates are that over 80 percent of the active pharmaceutical ingredients (API) in the drugs come from foreign nations, mainly China. That is just a guess, as the FDA itself doesn't even know. And while estimates are that over 80 percent of API may come from foreign nations, in the case of many antibiotics and drugs that treat high blood pressure, China is the sole source of API. Making it worse, while many generic drugs are produced in India—estimates are 70 percent or more—they also use API from China.

Widely circulated testimony from Rosemary Gibson, senior advisor at the Hastings Center and author of "China Rx: Exposing the Risks of America's Dependence on China for Medicine," brought concerns about China's control of API to our nation's leading policymakers in July 2019. Before the U.S.-China Economic and Security Review Commission, she stated that within a matter of days, China could bring the work of U.S. hospitals—military or otherwise—to a standstill.

Without guaranteed access to API, we are finding that our ability to respond to a global public health crisis is compromised. What's more, China can play on this weakness as it seeks to tout its economic and military prowess. As we wage a trade war and face rising tensions with China, its control of our drug supply could surely be adversely leveraged during these negotiations. And in fact, China is starting to do just that. Should China choose to exercise its ability to steer API away from manufacturers and suppliers that American consumers and the U.S. military rely on, American lives would be at risk. As former chief economic advisor Gary Cohn said, "If you're the Chinese and you want to really just destroy us, just stop sending us antibiotics."

Our only course of action is comprehensive public-private partnerships that can bring about significant policy change and domestic production. This effort has already begun through several pieces of bipartisan legislation, and has brought together parties who, especially in D.C., would not typically think of working together. For example, Sens. Elizabeth Warren (D-Mass.), Kevin Cramer (R-N.D.), Chris Murphy (D-Conn.) and Tim Kaine (D-Va.) joined Sen. Marco Rubio (R-Fla.) in introducing his bill in the Senate. In addition, Sen. Tom Cotton (R-Ark.), who has also introduced a bill to end this reliance on China, is talking in the same language as Rep. Adam Schiff (D-Calif.). All employ a similar central theme and strategy: Bolster domestic manufacturing through tried and tested measures.

So, why aren't we doing that? Why isn't the U.S. acting when both political extremes are saying the same thing—that we need to incentivize the domestic production of pharmaceuticals here at home? It's fairly simple: economics and know-how.

The U.S. has spent the past 20-plus years creating an economic system in which China can provide national support to those making API, which in turns allows those companies to lower their prices and kill U.S. production. The result is that most of the large-scale manufacturing technology and knowledge has also been exported out of this country.

This has led to the scary fact that no one knows where most of our drugs come from. While the FDA may know how many facilities make API, their leading officials have testified that even the agency does not know how much API we receive from international suppliers. Going forward, we need to mandate that the FDA track the production and use of foreign API. This will help both us to know where our products are coming from, allow the government to create proposals for government agencies to "buy American" pharmaceuticals and API, for the creation of targeted programs to encourage innovations in manufacturing processes and the inclusion of country-of-origin labels on foreign-made drugs.

While re-shoring U.S. production of API sparks industry concerns about price increases, if phased in over time, combined with an elimination of shipping and foreign inspection costs, such a shift could be made free of dramatic swings in drug costs. In addition, job gains domestically, and the related economic benefit and national security protection from the new domestic production of API, would further offset added costs.

Such a plan would also improve the quality of pharmaceutical products. While domestic drug production is rightly kept high-quality through unannounced FDA inspections, international factories producing API, especially Chinese factories, operate without fear of an inspector knocking at the door any minute; visas must be processed well in advance for FDA inspectors visiting factories there, so inspections are scheduled well in advance. And what's scary is that the FDA admitted that they know of issues with these foreign facilities but have refused to take action, fearing that could lead to a drug shortage. Increased domestic production could avoid these types of quality issues almost entirely and continue to allow unannounced, realistic inspections.

There is no doubt that American API manufacturing will reduce our dependency on an economic foe, reduce that foe's leverage in our trade negotiations and increase the quality of the medicine we rely on, while returning high-paying manufacturing jobs to hundreds of American communities. This win-win-win will keep Americans healthy and safe for years to come. It is time for D.C. politics to be pushed aside so this desperately needed bipartisan effort can move forward.

Lee H. Rosebush is an attorney and Doctor of Pharmacy who is a partner at BakerHostetler in Washington, D.C., focusing on pharmaceutical and pharmacy matters as well as defense, regulatory and patent issues.

The views expressed in this article are the author's own.​​​​​