Greatness Agenda

End China’s Chokehold on Pharmaceuticals

A strong domestic healthcare manufacturing base is as much a matter of national security and defense as it is of public health and augurs the very survival of America.

China is the perfect incubator for epidemic contagion. It boasts an understaffed, overwhelmed, and under-resourced healthcare system crushing under the weight of its totalitarian government’s monomaniacal obsession with secrecy and its penchant for self-aggrandizing propaganda. At any given time, it stands precariously perched on the tip of a most delicate homeostasis, and the faintest spark of infectious contagion can cast it hurtling down into the abyss of spectacular pandemonium. 

As it did before with SARS, earth’s most populous nation continues to be the number one travel destination on any world domination aspiring infectious pathogen’s fantasy vacation list.  

For a nation gripped by fear porn, impelled stock plunges, toilet paper stockouts, and fertility clinic egg freezing frenzies it seems fantastical to envisage the end of this epidemic but end it will. The long term national and health security risk posed by our dependence on a Chinese manufactured supply chain, however, pales in comparison to that of short-term contagion. 

Factory shutdowns across China have already impacted the supply of medications and uncovered our addict like dependency on Chinese-manufactured healthcare supplies. 

An overwhelming majority of the world’s prescription drug supply, either completely manufactured generics or raw materials used in pharmaceutical manufacture, come from China. By some estimates, this number is as high as a staggering 90-95 percent. 

The Chinese chokehold on American, and indeed global pharmaceutical supply chains has effectively positioned them as the world’s pharmacy, by design, and constitute a key sector in Beijing’s “Made in China 2025” and the 13th of their “Five-Year” plans. Even India, traditionally viewed as a viable alternate supplier, depends on China for as much as 80 percent of active pharmaceutical ingredient (API) and chemical intermediaries for pharmaceutical manufacture. 

The facts surrounding our non-existent ability to manufacture key pharmaceuticals are astounding, especially when you consider that we are now more dependent than ever on the Chinese, and that this occurred in the face of an established history of horrific manufacturing practices and Chinese inveigling to circumvent U.S. regulatory oversight. 

A dispassionate reading of the facts should convince even the most irrational among us to abandon our interminable hoard lust for the magical protections conferred by a year’s supply of assorted dry goods, cat food, and bath tissue, and instead comprehend the catastrophic consequences of an epidemic-disrupted pharmaceutical supply chain with the potential to impact the lives and survival of even the non-infected. 

The future probability of an epidemic leading to a pandemic is 100 percent. The probability of a basement full of toilet paper preventing an epidemic is zero. 

America Has No Antibiotics Industry

Consider this: the three most important antibiotics used to treat anthrax: Ciprofloxacin, Doxycycline, and Penicillin, are either no longer made in the United States, or made in such small quantities that the supply chain is effectively controlled by China.

The United States no longer makes penicillin. Yes, you read that right. The last penicillin fermentation plant closed in 2004. Chinese companies cartelized, sold product on the global market below market price, and drove U.S., European, and Indian producers out of business. As expected, prices increased once the Chinese gained a dominant global market share. 

The United States pioneered the mass production of penicillin and its application in World War II in one of the greatest wartime triumphs of American ingenuity and innovation. What great irony then that we no longer produce any, and the country that sells it to us is now the crucible of epidemic contagion.

The situation with doxycycline is just as bleak. In the aftermath of the 2001 anthrax attack on Capitol Hill, the U.S. government was forced to turn to Portuguese company Hovione to buy 20 million doses of doxycycline, a drug originally invented and developed in the United States. 

Hovione had to buy the chemical starting material from China. CEO Guy Villax warned: “If we were asked to do this again, we would be dependent on China providing us with key starting materials that are unavailable in the rest of the world.” 

The antibiotic Ciprofloxacin, like doxycycline, is critical in the treatment of both Anthrax and Bubonic plague. After the 2004 expiration of patent protection, ciprofloxacin is now mass-produced by generic firms that acquire a key ingredient, dichloro fluorobenzene from one of four Chinese companies or two Indian firms.

Cheap Chinese Products Kill Americans

Heparin is an injectable anticoagulant or blood thinner used for the treatment of blood clots. In 2007 and 2008, heparin sourced from Chinese manufacturers was linked to the deaths of nearly 246 Americans. Pharmaceutical company Baxter subcontracted the creation of precursor chemicals of Heparin to a company with production facilities in China. A lethal counterfeit precursor costing a fraction of the true starting material was deliberately placed during the manufacturing process in China for economically motivated reasons. Since then, the FDA continues to raise concerns that some of the original Chinese companies are operating under new aliases and supplying their products to third parties thereby circumventing their import alert ban.

There is no denying that the coronavirus epidemic will worsen before it gets better, and its economic impact will be significant. One of the most important lessons here is that China controls our healthcare. This is no exaggeration.

Valsartan, a commonly used blood pressure medication with a tainted saga received widespread news media coverage in 2018 when certain batches of Chinese manufactured Valsartan contained, per pill, more than 200 times the acceptable interim limit for the carcinogen N-nitrosodimethylamine (NDMA). Subsequently, at least two more carcinogens and a potential fourth one was linked to its Chinese manufacture. 

Even more concerning, the FDA and their European and Chinese counterparts who inspected facilities found no critical concerns or manufacturing malpractice. The failure of these safety net processes came to light just a month after hundreds of thousands of children’s vaccines were revealed to be faulty, putting an unknown number of Chinese infants at risk and at least another 400,000 doses of the same vaccines, produced by a different, second company, the Wuhan Institute of Biological Products, were found to be substandard. Wuhan, of course, is the epicenter of the current Coronavirus outbreak. 

China Defeats U.S. Regulations

Unfortunately, such stories are legion, and they drive home a salient point: The FDA can regulate the manufacturing process of generic drugs. It cannot regulate the ingredients manufacturers buy. 

Almost as important, the law doesn’t require the sources of a drug’s ingredients be disclosed. Rather, a drugmaker can claim as the country of origin wherever the drug’s various components were “substantially transformed” into the final product. That means a pharmaceutical manufacturer can source ingredients from around the world. But if it pulls them all together into pill form in America, the country of origin can be claimed as the United States.

FDA inspectors can show up unannounced at domestic manufacturing facilities, but overseas operators get weeks or even months’ advance notice. Manufacturers have been known to circumvent regulatory oversight by using some ingeniously depraved maneuvers. 

U.S. inspectors were served contaminated water in India, making them sick after they discovered that the manufactured insulin contained black metallic particles and caught an employee absconding with a bag full of destroyed manufacturing records. In another shocking instance, FDA inspectors were held hostage by company officials at a Chinese manufacturing facility after the inspector began uncovering systematic issues around testing the purity and strength of the drug product. 

The FDA recently pulled inspectors from China and halted inspections of drug and device factories amid the coronavirus epidemic. The FDA’s database of inspections, current as of February 7, shows the agency has not listed any inspections of any Chinese sites since December. It doesn’t take an overactive imagination to ponder the level of Chinese manufacturing diligence under conditions of worker shortages unburdened by regulatory oversight at facilities routinely accustomed to churning out substandard drug products.

Drug Shortages Are Already Happening

The FDA on February 27 released a statement warning that the United States was experiencing its first drug shortage directly related to the coronavirus outbreak. The agency did not name the drug but said that there were manufacturing issues with a pharmaceutical ingredient related to a site affected by the coronavirus. 

Drug shortages in healthcare are not uncommon. For example, a 2018 survey of 719 pharmacists nationwide by University of Chicago researchers found that in the span of the past year all experienced at least one drug shortage, and 69 percent had experienced at least 50 shortages during that time. 

Sudden disruptions to already constrained supply chains during times of surging patient volumes and caseloads, as in an epidemic, could lead to rationing of drugs and substitutions whereby less efficacious drug alternatives are administered in place of more efficacious ones and could result in catastrophic consequences by scuttling an already strained healthcare system.

That the United States, the foremost leader in drug discovery, innovation, and healthcare can be reduced to hand wringing helplessness at the prospect of jeopardized overseas supply chains impacting the health of its citizens is unconscionable. While President Trump signed an $8.3 billion emergency spending bill and Senator Josh Hawley (R-Mo.) introduced a bill aimed at diversifying the U.S. medical supply chain, not much effort or attention has been directed towards the immediate establishment of American manufacturing capabilities for critical pharmaceuticals that can be scaled up in times of national emergencies. 

Without extant manufacturing, scaling up is an impossibility. Establishing a pharmaceutical supply chain from the ground up is an onerous and complex multi-year process requiring myriad applications, navigating a maze of regulatory processes and a concatenation of approvals. Abbreviated regulatory processes and incentives would go a long way to ease the pain of kickstarting our endogenous supply chain. 

There is no denying that the coronavirus epidemic will worsen before it gets better, and its economic impact will be significant. One of the most important lessons here is that China controls our healthcare. This is no exaggeration. From pharmaceutical building blocks to finished drugs and components in diagnostic medical equipment, our chief global rival has complete monopoly on the tools we need to diagnose, treat, control and cure disease. We inexplicably and frighteningly no longer make things we need to survive and prosper. 

A strong domestic healthcare manufacturing base is as much a matter of national security and defense as it is of public health and augurs the very survival of a nation. The current coronavirus epidemic arose from the very conditions due to which we lost our manufacturing independence: China lacks health and safety standards that allow it to price us out of competition by flooding the market with cheap and frequently substandard goods and medications. 

Yet if China were to announce an export ban on medical exports, our healthcare infrastructure would collapse in a matter of months if not weeks. In fact, in an article in Xinhua, the state-run media agency considered the mouthpiece of the Communist party, China bragged that it could throttle pharmaceutical exports and plunge America into “the mighty sea of coronavirus.” This demonstrably underscores our vulnerability to the weaponization of foreign-sourced supply chains and its potential to be used as leverage in times of national crisis. Even worse, what if the nation supplying the cure was the perpetrator of bioterrorism? 

If there ever was a silver lining to an epidemic, it is this: it has cast into sharp relief the unroofed scabs and track marks of our self-inflicted pharmaceutical dependence and given us a preview of what a drug withdrawal feels like. If we can’t get clean and sober from our fatal addiction, we may be consigned to an interminable future of compromising our national interests in exchange for our drug fix. 

What better way to stimulate our economy and strengthen the country’s immunity to extraneous forces than by ensuring a domestic supply chain capable of producing items critical for the safety, survival, and health of Americans? There never has been a greater opportunity to harness the kinetic energy of our nation’s emergency response within the eye of a pandemic maelstrom and use it to unleash the golden age of American manufacturing renaissance. Carpe diem.