WASHINGTON – When the Covid-19 pandemic swept the world in 2020, hospitals across the United States found themselves fighting for masks, gloves and other important medical supplies.
The crisis served as a call for awakening for the US despite being a global leader in the pharmaceutical industry. Politicians and medical leaders have vowed to correct dangerous overdependence on foreign-made medical supplies.
In March 2020, Einhorn witnessed what he called a “logistics nightmare” when shipments from China stopped in order to stop it from China.
According to Einhorn, the US generic drug supply chain remains heavily dependent on global production, with a significant portion of the raw materials and raw materials supplied from China.
Individual probes to the semiconductor were activated simultaneously.
“The investigation into Section 232 has taken a long time,” Einhorn said.
According to industry experts, the iron grip of the Chinese administration’s iron on the supply of key drugs in America has been driven by Beijing’s strategic push to control major industries, systematic issues within the US health care system, and the lack of critical action in Washington.
They argue that the pharmaceutical industry is different from the automotive sector. The automotive sector knows that the US government cannot afford to impose tariffs without a strategic plan.
“This gives China a huge advantage,” Einhorn said. “Unfortunately, they hold the cards. People don’t want to admit it.”
The threat to national security
Experts say that after years of offshoring production to China and other countries, the US has lost its ability to produce many life-saving drugs and create a national security threat.
It’s an artificial problem, but it can be fixed, according to Rosemary Gibson, co-author of China RX: Exposes the risk of US dependence on China to medicine.
“In this country, you can’t make antibiotics from start to finish. You can’t make penicillin. You can’t make antibiotics that are necessary to treat sepsis.
The new section 232 study covers “both completed generic and non-generic drug products, medical measures, important inputs such as active pharmaceutical ingredients and key starting materials, and the predominant production of those items.”
After the investigation, many national security hawks hope to see a well-designed strategic plan from the US government to address this dependence on China.
“When a nation has the erosion of an industrial base, which is the ability to actually make things, it puts the country in a very vulnerable state,” said the Epoch Times, who retired from US Army Colonel and visited senior fellows on Strategic Risk.
Hundreds of thousands of American soldiers fought overseas during World War II, but he pointed out that their efforts would not have been possible without the private sector. The factories that once made cars and home appliances quickly moved to the production of war materials.
“It was the industry that really saved our country,” Suarez said.
In her book, Gibson explained how Beijing uses playbooks to control major industries such as medicines. She highlighted how these trade practices contributed to the losses of the last penicillin fermentation plant in the United States in the early 2000s.
After joining the World Trade Organization in 2001, China began to flood the market with inexpensive penicillin ingredients.
“They sold it at a very low price with the aim of driving us, European and even Indian producers,” Gibson said. “After all, China has become the dominant global supplier of penicillin substances and has since raised prices.”
China’s Secret Weapon: Materials
China is the dominant supplier of pharmaceutical ingredients around the world. Gibson estimates that the US relies on China for 95% of the key ingredients needed for common drugs.
Even if the US ends up reducing its dependence on drugs sourced directly from China, it will still need to purchase medicines from countries that rely on China for key components such as active pharmaceutical ingredients (APIs) and key starting materials (KSM).
Pharmaceutical supply chains often include a step-by-step production process in which the core component, KSM, is produced in China and is transferred to countries such as India for the production of APIs. China is also the dominant producer of APIs. Several quality drugs and APIs are also produced in Ireland. The finished product will then be sold to the US.
“Without KSMS, we can’t create an API. Without API, we can’t create a finished medicine. That’s why China sits at the foundations of the global drug supply chain,” Einhorn said.
Trump believes that pharmaceutical tariffs will boost domestic manufacturing and reduce dependence on other countries.
“We won’t make our own drugs anymore,” Trump told reporters on April 15. “The drug companies are in Ireland, they are in many other places.
What’s next?
As part of an ongoing investigation, the government is gathering information from a variety of stakeholders, including industry leaders, trade organizations, academics and other thought leaders.
He said sectoral tariffs on drugs and semiconductors are “not available for negotiation” with other countries.
“They will only be part of re-firing the core national security items that need to be made in this country to the re-shore,” Rutnick said.
Suarez believes that tariffs are not sufficient for the country’s strategic plan.
“We actually have an incentive policy to strengthen domestic manufacturers,” he said. He said incentives could include scaling up, modernizing facilities and tax cuts for businesses that have purchased equipment.
“The problem is, 90-92% of the prescriptions Americans take are from the general side, so I think the government has the biggest role to play.
Suarez also advocates for strategic drug reserves similar to those maintained by the United States since the 1970s.
He said that US KSM and API stockpiles have been maintained for many years, providing strategic flexibility and agility.
The world’s largest emergency supply, oil reserves, were created in the aftermath of the 1973-1974 Arab oil embargo, leading to a disruption in the oil supply and a global energy crisis.
“Responsible organizations have always had some sort of accidental plan, whether it’s the country or business,” Suarez said. “Why is there one for the pharmaceutical industry?”
