Momentum grows to change medical supply chain from China
Calls are growing for the U.S. to reduce its dependence on China for key medicines and supplies as Americans face widespread shortages in the midst of the coronavirus pandemic.
While the U.S. supply chain’s heavy reliance on Beijing for medical manufacturing has been glaringly apparent for roughly two decades, both lawmakers and administration officials say the virus has exposed just how vulnerable the country is as it leans on China and other nations to help provide the tools necessary to combat the pathogen.
Peter Navarro, President Trump’s economic adviser, pledged this week that the United States would move away from its reliance on other nations and toward building up its own capabilities to produce drugs and medical supplies.
“One of the things that this crisis has taught us, sir, is that we are dangerously overdependent on a global supply chain,” Navarro said during a White House press briefing, standing next to Trump. “Never again should we rely on the rest of the world for our essential medicines and countermeasures.”
Trump has also indicated he is seeking further independence on supplies, emphasizing in a Thursday meeting with pharmaceutical companies that the virus “shows the importance of bringing manufacturing back to America so that we are producing, at home, the medicines and equipment and everything else that we need to protect the public’s health.”
The concern is bipartisan. Three Senate Democrats backed legislation put forward by Sen. Marco Rubio (R-Fla.) last month that advocates for the U.S. to reprioritize its productive capability in order to achieve less supply chain dependence on China, particularly as it relates to products used in the federal health care system.
Sen. Elizabeth Warren (D-Mass.) and others previously raised concerns about such reliance in early December, urging Defense Secretary Mark Esper in a letter to “address the dangers posed by this reliance on foreign drug makers,” months before the coronavirus grew into a pandemic.
Their concerns followed the 2019 annual report from the U.S.-China Economic and Security Review Commission, which warned Congress that U.S. consumers, including the military, are “heavily dependent” on China for drugs and active pharmaceutical ingredients (APIs), arguing that this “presents economic and national security risks.”
But the U.S. also relies on China for key supplies such as masks and gowns to help protect health care professionals from contracting disease as they treat infected patients.
The Congressional Research Service in a report released last month said that last year China supplied 30 percent of U.S. imports of medical personal protective equipment, which is in dangerously short supply in parts of the country.
Altogether, the U.S. imported more than $12.7 billion worth of pharmaceuticals and antibiotics, medical devices and food products from China in 2018, according to Rubio, who wrote a February op-ed warning about the U.S.’s reliance on China. He noted that these numbers do not reflect APIs. China is believed to supply roughly 80 percent of APIs to the U.S.
Experts say the U.S. is already learning the risks of this dependence the hard way: empty shelves of medicine that won’t get filled as fast as they need to be.
In a further sign of how vulnerable the U.S. is, more than 50 countries, including the U.K. and India, have imposed some sort of export ban on essential medicines amid the pandemic.
And in state-run media outlets, China has threatened to withhold medicine from the U.S.
To many experts and policymakers, the coronavirus serves as a call to action.
“If you withhold medicine, you’re basically threatening to kill the American people. If that is not a warning, I don’t know what is,” said Rosemary Gibson, a senior adviser at The Hastings Center.
“What we’re learning from that is that no matter how many treaties you have, no matter how many alliances, no matter how many phone calls, when push comes to shove you run the risk, as a nation, of not having what you need,” echoed Navarro, who oversees trade and manufacturing policy for the administration.
Navarro said once the coronavirus crisis passes, federal agencies such as the Veterans Affairs Department and the Defense Department should prepare for future crises by stocking up on items such as medicines, masks and ventilators. He also indicated that the Food and Drug Administration would need to work quickly to approve medical manufacturing so that the U.S. can compete with other countries that have cheaper labor and fewer regulations.
And while some experts have raised concerns about the cost-effectiveness of moving medical manufacturing back to the U.S., others have argued that not only will there be major health and national security benefits, but the U.S. also will see great gains both economically and in quality of the drugs it produces.
Generic drugs can be made more quickly, more cheaply and with real-time quality control, all while producing more jobs, said Gibson, who is an author of “China Rx: Exposing the Risks of America’s Dependence on China for Medicine.”
“We can revitalize our economy and put people back to work,” she said.
Moving manufacturing back to the U.S. could prove a rough transition, coming nearly 20 years after China effectively pushed the U.S. out of the scene.
And experts have described a domino effect in the U.S. of China taking over the global production of key chemicals used in drugs.
Shortly after the U.S. opened up free trade with China in the early 2000s, the last U.S. aspirin plant closed in 2002. The last vitamin C plants shuttered around the same time, and then the last penicillin plant closed in 2004. The Chinese industry, heavily subsidized by the government, put its medical products in global markets while keeping costs low in order to drive out competition, experts say.
Now, companies and manufacturers are scrambling to obtain chemicals that are in short supply.
In addition to the military delivering needed supplies, the Trump administration and state governments have employed a series of methods to help address the shortage, including leaning on foreign countries and U.S. businesses to bring supplies from overseas
The federal government and private companies have teamed up to help bring aid from other countries to the U.S. in what is called Project AirBridge. A spokesperson from the Federal Emergency Management Agency said Wednesday that this project has coordinated four shipments since March 29, with more arriving daily.
Massachusetts Gov. Charlie Baker (R), meanwhile, appealed to New England Patriots owner Robert Kraft to help secure a supply shipment from China as the shortage in his state became dire. On Thursday, the New England Patriots team plane arrived in Massachusetts carrying more than 1.2 million N95 masks from Shenzhen, China.
The U.S. government is also pressing more private companies to adapt their supply chains to produce the needed supplies at home. Trump has even made use of the rarely deployed Defense Production Act (DPA) to compel American manufacturers to turn their production lines against COVID-19.
Ford announced on Monday that it would be teaming up with General Electric to manufacture ventilators at its plant in Michigan, where it aims to “produce 50,000 of the vitally needed units within 100 days and up to 30,000 a month thereafter as needed.”
Some of the companies that the government is leaning on to help address the shortage are also finding themselves the subject of the president’s wrath.
Trump on Thursday announced that he would use the DPA to compel 3M, a multinational company that produces equipment for health care workers, to make more respirator masks. He later took to Twitter to attack the company in what appeared to be an effort to pressure it to stop exporting masks to Canada and Latin America, warning that 3M “will have a big price to pay.”
“The narrative we are not doing everything we can to maximize delivery of respirators in our home country, nothing could be further from the truth,” 3M CEO Mike Roman told CNN in response to the president’s blast.
The scramble within the U.S. also comes as Beijing is facing accusations of concealing information about the initial COVID-19 outbreak, with Chinese officials downplaying the severity of the virus and denying that it could be transmitted between humans in early January. Those actions could have contributed to many deaths, researchers say, because other countries, including the U.S., lost precious time to prepare for the impact of the virus.
Adding to the scrutiny, Bloomberg News reported Wednesday that a classified U.S. intelligence community report given to the White House showed China has purposely reported false data about its number of coronavirus cases and deaths.
So while officials are calling for the supply chain to be retooled, some experts are also warning that Beijing must first take responsibility for its early handling of the virus, particularly as infection rates surpass 1 million people globally and 258,000 confirmed cases in the United States.
“It is irresponsible on our part to simply go back to business as usual,” said Michael Auslin, a distinguished research fellow at Stanford’s Hoover Institution.