Excerpt: How did the pharmaceutical industry start sourcing pharmaceuticals in China?
After her presentation at the Made in America trade show last month, I met Rosemary Gibson, co-author with Janardan Prasad Singh of China RX, published in 2018. China RX is an expose of the pharmaceutical industry just as Death by China by Greg Autry and Peter Navarro was an expose of the general manufacturing industry. China RX describes how the pharmaceutical industry has transferred the manufacturing of generic drugs to China, which has resulted in great risk to the health of Americans as well as a substantial risk to our national security.
[Michele Nash-Hoff | November 19, 2019 | Saving US Manufacturing]
If you take prescription drugs, over-the-counter medication, or vitamins, then this book is a must read for you. I was horrified to learn that both of my blood pressure medications (Amlodipine and Lisinopril) are produced in China. Would you believe that 80% of all ingredients of pharmaceuticals and 100% of ascorbic acid are now made in China according to Ms. Gibson’s presentation. We are talking about antibiotics, birth control pills, antidepressants, pain relievers, not to mention drugs that treat HIV/AIDS, cancer, bipolar disorder, and epilepsy. The list even includes antidotes to Ebola and Anthrax. Doesn’t that frighten you?
The authors immediately capture your attention with the story of one of the victims of the contaminated heparin blood thinner scandal of 2008, Bob Allen, MD. Heparin is routinely given to patients to prevent the formation of blood clots in the blood vessels, but in his case, the contaminated heparin caused blood clots leading to such a massive heart attack that his heart completely failed, and they had to remove his heart and hook him up to an artificial heart until he could have a heart transplant. Unfortunately, the heart transplant three months later didn’t succeed, and Dr. Allen’s death became another statistic of the 246 reports “made by healthcare professionals to the FDA about deaths associated with heparin from January 1, 2008 to May 31, 2008.” However, “As with all reports it receives, the agency makes no claim of certainty that a death was caused by a drug.”
How did the pharmaceutical industry start sourcing pharmaceuticals in China? In Part II, “Pivot East: How it Happened,” the authors document the complex chain of circumstances that led to China becoming a major source of pharmaceuticals. The story is similar to what was described by the authors of Death by China. Once a patent for a drug ends, the manufacture of generic versions to that patented drug begins. Competition reduces the price of the drug sometimes to the point that the original manufacturer can no longer compete in producing the drug. In order to retain any market share, the original manufacturer may seek to reduce manufacturing costs by subcontracting the manufacture of the drug to an outside source. Due to lower costs of labor and other costs of doing business, China became the source of choice. This outsourcing benefitted American pharmaceutical companies to begin with, but in the long-run has led to the decline of the American pharmaceutical industry resulting in closed plants and loss of jobs.
The authors point out that corporate America, and particularly multinational corporations, focus on short-term, profit-driven outcomes whereas China focuses on long-term outcomes. When American companies source production of goods or pharmaceuticals, they are essentially transferring the technology and know-how to Chinese vendors. The outcome for such pharmaceutical companies as Baxter, GlaxoSmithKline, Johnson & Johnson was that their Chinese vendors began to produce their own brands to compete with their former customers. As they have done with other manufactured goods, Chinese pharmaceutical companies began to flood the U. S. market with lower cost drugs driving prices down to the point that American companies stopped producing certain medications. For example, the authors state that the last plant making aspirin in the U. S. closed in 2002.
You might be asking yourself, why doesn’t the Federal Drug Administration put a stop to importing drugs and medicines produced in China? In Chapter 9, “Are Drugs from China Safe,” and Chapter 10, “Made in China, Sue in America? Good Luck” the authors outline the complex factors that prevent the FDA from preventing this from happening.
In chapter 11, “The Perfect Crime,” the authors state: “A poorly made or deliberately contaminated prescription drug is a perfect crime. It is hard to detect. Manufacturers keep the public in the dark. Regulators are tight-lipped so they don’t offend manufacturers. Perpetrators are rarely caught. Most victims are unaware.” They outline how the underfunding of the FDA is a major source of the problem. In fact, in 2014, there were “Only two full-time FDA staff members are assigned to work in the agency’s office in China to inspect drug-manufacturing facilities…” While funding has been increased since then, the authors conclude that “outsourcing of America’s medicine making is so complex it seems impossible to ensure that they are safe.”
Chapter 12, asks the question “Where does the Secretary of Defense procure his medicine? You would hope that the answer would be made in America. The authors write, “They must be made in the United States or in an approved country according to the Federal Trade Agreement Act (TAA) of 1979. China is not a designated country. The TAA allows for exceptions when no other source is available…” Thus, when the authors contacted the Pentagon to see which drugs were made in China due to lack of availability, “A spokesperson replied that the department has had to buy thirty-one prescription drugs from China.” The same is true for the Veterans Administration that provides healthcare for all of our veterans and their families.
In chapter 13, The authors do an outstanding job of showing the danger to our national security . by being dependent on China as a source of vital medicines and medical devices. They quote Dr. Goodman, dean of the Milken Business School of Public Health at George Washington University, saying, “It is a matter of national security that we have the essential drugs we need…I think it is time for an examination, for some of the most critical drugs, and it’s not just drugs, medical supplies, masks are all made overseas. Do we need to think about having at least some resilient manufacturing capacity built in this country?”
The book concludes with the authors’ ten-step plan to bring the pharmaceutical industry home. You need to read this for yourself. Relying on China for the bulk of our medicines and medical supplies makes about as much sense to me as if we had bought these products from the Soviet Union during the Cold War. China has not become the more market-oriented or more rule of law country that some hoped would happen. They have changed from producing commodities to going after advanced technology production in pursuit of their plan to become the Super Power of the 21stCentury. China could bring the U.S. to its knees and achieve their goal by simply disrupting the supply of critical drugs to America. Medicines are essential to life. Think of what could happen if we had an epidemic, and China withheld the antidote. Congress and the White House must take the steps the authors recommend to ensure the health of Americans and our national security
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