Prosperity Summit Wrap: Industry Leaders Share Concerns With Congressional Staffers

Prosperity Summit

CPA’s Education Fund wrapped up its first-ever one-day summit on Monday. Roughly 40 congressional staff members had a chance to meet with and hear from industry leaders as diverse as Florida farmers to multinational corporations in the renewable energy space about the trials and tribulations of competing with emerging markets that play by different rules. And often break existing ones.

No one country was singled out here. Mexico took its lumps, right alongside China and India.

America: Food Importer?

Yes, with the exception of soy, corn, wheat and chicken the U.S. is a net importer of key food items. Once in a while the U.S. is a net exporter of beef, but not always.

“We’re a net importer of food and no better is this more stark than in fruits and vegetables,” said Michael Schadler, executive vice president of the Florida Tomato Exchange. They represent farmers who say Mexican imports are above and beyond what was agreed upon in the new NAFTA. “Some sort of agreement is needed if we are to have an agricultural business in this country,” he said. 

While most people like to think of the U.S. as loaded with food items, we are increasingly important dependent and vegetables, fruits and fish are the main areas where we consume more than what we produce. 

Agriculture is often used as a punching bag when it comes to global trade tensions. China is notorious for holding U.S. farm states hostage when trade issues don’t go their way, as was the case with the Section 301 tariffs.  CPAs CEO Michael Stumo, sitting in the audience, said that Congress needs to understand that the threats may lead to short term problems, but recovery is always around the corner. “We have to let farmers know that Congress has their backs,” he said.

Renewables: From Fossil Fuels Independence to Solar Dependence?

Arguably, no one in Congress wants to see the U.S. go from energy independence, to wholly reliant on one country for the solar supply chain. But, despite the Inflation Reduction Act’s intentions, China sits on top the league tables in American solar. Prices are dropping, which is good for deployment, but oversupply in Asia, led by Chinese multinationals, are making it so that companies that have invested in solar here because of the IRA are now looking at a non-existent return on investment. 

 “On one hand you have tons of investment in solar now because of the Inflation Reduction Act, but on the other you have this growth of imports which are two times what they were in 2020,” explained Scott Moskowitz, head of market strategy and public affairs at Q Cells North America. “We have a supply of solar that exceeds demand up to 2032 now and are looking at two times the amount of solar panels in the market that are needed for the next ten years,” he said.

Q Cells built a solar factory in Dalton, GA because of the Section 201 solar safeguard tariffs; a tariff regime that has all but been wiped out due to changes to the program that excluded double sided solar panels Chinese firms now export as single sided (even though they are not), and an increase in allowable import quotas. Still, Q Cells invested more in the U.S. because of the IRA and is now building a new factory in Georgia. With China benefiting now from IRA tax breaks, non-Chinese players find themselves in somewhat of a potato sack race against a Chinese sprinter, as CPA’s chief economist Jeff Ferry noted on the day. He later wrote about this issue – which he described as a “solar apocalypse” – on our website.

Drug Shortages: How Does This End?

Drug shortages remain a hot button issue on Capitol Hill. Prior to the Prosperity Summit, CPA released its landmark report on Aurobindo, which showed that the Indian generic drug giant has been on the receiving end of numerous Warning Letters – essentially D grades by FDA inspectors – over the last two years. Despite bad marks, supply constraints here for key drugs means foreign labs with lackluster manufacturing practices are allowed to sell drugs to the U.S. For the FDA, supply often trumps drug quality.

“Our reliance on overseas labs leads to critical shortages,” said Aman Ahmed, director of international sales at Nexus Pharmaceuticals. That’s something many members of Congress have heard this year in hearings about drug shortages. 

“India’s cost of labor and cost of manufacturing is so much cheaper than ours it is hard to convince hospitals to buy from domestic labs. When I go to a hospital and try to sell our product…I remember doing this for a drug for people on a ventilator during Covid. My drug was only $5 but the hospital said they could get it from India for seventy five cents. We can do our best to lower prices, but at the end of the day we also want to stay in business,” Ahmed said.

Jessica Johnston, vice president at BD (Becton, Dickinson and Company)a medical device company that manufactures a wide range of products from sophisticated pharmacy automation and laboratory robotics equipment to more ubiquitous items like syringes and blood collection devices – is raising awareness of supply chain challenges to ensure healthcare providers, medtech manufacturers and government officials understand what’s at stake and can work together to find solutions to ensure a resilient U.S. supply chain for critical medical products. 
“One year ago there were six plants that manufactured syringes… now there are only two,” she told the attendees. “We have seen other industries go down this path, including semiconductors, steel and others. Those industries are trying to figure out how to bring manufacturing back to the U.S., but it’s not too late for medtech. Action should be taken to maintain manufacturing before it leaves. There’s no need for medtech to be part of another ‘let’s bring them back’ story. We’re here, we’ve been here, and we want to stay and grow here.”

Tinglong Dai, a John Hopkins University professor and co-chair of the Hopkins Business of Health Initiative said at least 62% of drug shortages were due to drug safety issues raised during inspections. 

Yet, in 2022, only about 6% of foreign labs registered to sell here were inspected by the FDA.

“This is not a small issue. This is a very big issue,” Dai said, adding that hospitals and medical centers that purchase drugs should not be singularly focused on price.

This is like saying McDonald’s has the same quality foods as a fine dining restaurant. The only fact is that McDonalds is cheaper.

Dai said our supply chain for public health goods was “as foreign dependent and opaque as where Amazon imports come from.” 

“Even for things like needles and syringes, we have supply chain challenges,” he said. “And for medicines, a lot of times we cannot really quantify how many drugs in our supply chain are of superior quality. Hard to know. I wonder how many people are sick and dying because the drugs they are on are not working the way they should be.”


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