2019 REPORT TO CONGRESS of the U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION:
SECTION 3: GROWING U.S. RELIANCE ON CHINA’S BIOTECH AND PHARMACEUTICAL PRODUCTS—
- “China is the world’s largest producer of active pharmaceutical ingredients (APIs). The United States is heavily dependent on drugs that are either sourced from China or include APIs sourced from China. This is especially true for generic drugs, which comprise most prescriptions filled in the United States. Drug companies are not required to list the API country of origin on their product labels; therefore, U.S. consumers may be unknowingly accepting risks associated with drugs originating from China.
- The Chinese government has designated biotechnology as a priority industry as a part of its 13th Five-Year Plan and the Made in China 2025 initiative. The development of China’s pharmaceutical industry follows a pattern seen in some of its other industries, such as chemicals and telecommunications, where state support promotes domestic companies at the expense of foreign competitors.
- China’s pharmaceutical industry is not effectively regulated by the Chinese government. China’s regulatory apparatus is inadequately resourced to oversee thousands of Chinese drug manufacturers, even if Beijing made such oversight a greater priority. This has resulted in significant drug safety scandals.
- The U.S. Food and Drug Administration (FDA) struggles to guarantee the safety of drugs imported from China because of the small number of FDA inspectors in country, the large number of producers, the limited cooperation from Beijing, and the fraudulent tactics of many Chinese manufacturers. Because of U.S. dependency on China as a source of many critical drugs, banning certain imports due to contamination risks creates drug shortages in the United States.
- As a result of U.S. dependence on Chinese supply and the lack of effective health and safety regulation of Chinese producers, the American public, including its armed forces, are at risk of exposure to contaminated and dangerous medicines. Should Beijing opt to use U.S. dependence on China as an economic weapon and cut supplies of critical drugs, it would have a serious effect on the health of U.S. consumers.
- Lack of data integrity in China presents challenges for U.S. and Chinese health regulators. In 2016, the China Food and Drug Administration investigated 1,622 drug clinical trial programs and canceled 80 percent of these drug applications after it found evidence of fraudulent data reporting and submissions of incomplete data, among other problems.
- China places great emphasis on genomic and other health-related data to enhance its biotech industry. Domestically, China established national and regional centers focused on big data in health and medicine. Investment and collaborations in the U.S. biotech sector give Chinese companies access to large volumes of U.S. medical and genomic data, but U.S. companies do not get reciprocal access.
- Foreign firms continue to face obstacles in China’s health market. These obstacles include drug regulatory approval delays, drug pricing limitations, reimbursement controls, and intellectual property (IP) theft. U.S. companies must also compete with Chinese drug companies that introduce generic products or counterfeit drugs to the Chinese market shortly after a foreign patented drug is introduced.
- China is the largest source of fentanyl, a powerful synthetic opioid, in the United States. Although the Chinese government made multiple commitments to curtail the flow of illicit fentanyl to the United States, it has failed to carry out those commitments.”
The 593 page report has 6 chapters, being:
1.) 2019 in Review
- Section 1: Year in Review: Economics and Trade
- Section 2: Year in Review: Security, Politics, and Foreign Affairs
2.) Beijing’s Internal and External Challenges
3.) US-China Competition
- Section 1: U.S. China Commercial Relations
- Section 2: Emerging Technologies and Military Civil Fusion: Artificial Intelligence, New Materials and New Energy
- Section 3: Growing U.S. Reliance on China’s Biotech and Pharmaceutical Products
4.) China’s Global Ambitions
- Section 1: Beijing’s “World-Class” Military Goal
- Section 2: An Uneasy Entente: China-Russia Relations in a New Era of Strategic Competition with the United States
- Section 3: China’s Ambitions in Space: Contesting the Final Frontier
- Section 4: Changing Regional Dynamics: Oceana and Singapore
6.) Hong Kong.
The report can be read and downloaded in its totality here: uscc.gov.
“Faithful are the wounds of a friend, but the kisses of an enemy are deceitful.”