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China has an emerging stranglehold on the US generic drug supply

Various medications. (Needpix/Released)
November 26, 2019

The quest for saving money is an American pastime. But in the healthcare business, especially where China is involved, this quest could prove deadly. The current push towards generic medicine combined with China’s encroaching upon the pharmaceutical industry is a risk to our nation’s health, our economy, and our national security.

This isn’t conjecture. At least 81 Americans died in 2008 from a tainted blood thinner manufactured in China. Unwitting victims included people of all ages and health, including children. Despite the tragedy, the Chinese stonewalled a proper investigation.

Over the past decade an increasing amount of the Active Pharmaceutical Ingredients (API) in our drug supply have come from China. According to Congressional testimony, as much as 80% of our APIs are produced overseas, the majority entering from China or India and even the APIs entering from India likely have a Chinese component.

This blood-thinner incident is not isolated and it is yet to be truly addressed. Years after the initial tragedy, French authorities found multiple potentially tainted samples and what appeared to be manipulated testing to hide contamination. A U.S. House panel found similar concerns in the United States as recently as 2016. This is just the tip of a massive iceberg.

More recently, evidence of carcinogen-ladled components in generic blood pressure, heartburn, and hypertension medicines was discovered. The culprit? Foreign manufacturers, particularly China.

According to Rosemary Gibson, author of ChinaRx, the Chinese have undertaken predatory trading practices to capture our drug industry, principally targeting generic and over-the-counter medicines. Millions of Americans take Chinese-based medicines daily and the risks could prove serious.

China has captured the market by offering lower manufacturing costs focusing on generics. But cheap comes with a price and the price can be our health and maybe our nation’s security. According to Gibson:

“China now dominates global production. Even India, with its large generic drug industry, relies on China for 80% of the key ingredients it uses to make generics. 

In five to 10 years, the U.S. will have largely lost its capacity to manufacture most generic drugs. And that will leave America almost completely dependent on Chinese companies. When we lose control of these medicines, we lose control over safety and the prices we pay.”

The issue is three-fold. First, low prices encourage corner cutting, something that should never be allowed when life and death is involved. Inside the United States, we have an active regulatory structure working to root out and resolve threats through a strict FDA-approval process and regular manufacturing inspections.

In China, however, foreign inspections are viewed as problematic and sometimes even outright denied as they claim risks to their national security. The FDA may wait weeks or even years for permission to visit a single plant overseas. So much for the option of a surprise inspection, something integral to safety procedures here in the United States. To make matters worse, Chinese manufacturers may undertake active espionage efforts to mislead, hinder, or otherwise circumvent the FDA.

Sadly, American citizens are not experiencing the safety they rightly expect in regard to generic drugs manufactured overseas or even those created here with overseas ingredients. That’s bad enough. With the intense price competition of generics, the temptation to outsource production is almost irresistible, putting patients at risk.

We no longer manufacture basic penicillin or Vitamin C in the United States. We can’t produce even the most critical antibiotics without China, including the Cipro used to battle Anthrax. The key drugs for Alzheimer’s, blood pressure, Parkinson’s, epilepsy, and depression, as well as many vitamins all have Chinese components. This leaves us vulnerable to a possible embargo that could shut down every hospital in America.

In addition to the health risks, our critical dependence also puts us at a severe strategic disadvantage in an ongoing global economic war. China is a notorious violator of Intellectual Property rights. This is particularly dangerous in regard to medicine as it undermines the American innovation so essential to discovering new life-saving treatments. Chinese-led generics hamper the ability for U.S. producers to recoup the high costs of the drug discovery and approval process.

Last but certainly not least is the fact that our military also depends on Chinese-made medicines to keep our warfighters healthy. Our armed forces could be completely compromised in the event of a future conflict should the Chinese decide to intentionally tamper with or cut off the supply of lifesaving drugs. We are at the mercy of the Communist country.

The only reasonable response is to view our health-care supplies, including both prescription and over-the-counter medications, as strategic and critical to national security. We must no longer shortsightedly compromise safety simply to save a few bucks with cheap generic alternatives. We must ensure that both the quantity and quality of our drug supply are undergirded by American manufacturing and innovation. Our health, our economy, our security, and our nation’s future depend on it.

Kevin D. Freeman, CFA, is the host of Economic War Room with Kevin Freeman on BlazeTV. Freeman is a NY Times bestselling author of Secret Weapon; How Economic Terrorism Took Down the U.S. Stock Market and Why It Can Happen Again and Game Plan; How to Protect Yourself from the Coming Cyber-Economic Attack. Freeman has served as a contracted consultant to the Department of Defense on matters involving Economic Warfare and National Security.

All opinion articles are the opinion of the author and not necessarily of American Military News. If you are interested in submitting an Op-Ed, please email [email protected].