Is the United States Dependent on China for Our Pharmaceuticals?

May 4, 2020

The COVID-19 crisis has strained the U.S. health care delivery system and nearly devastated the economy. The specific origin of the virus remains controversial, but there is no question it came from Wuhan Province in China. When China locked down early in the pandemic, the issue of America’s pharmaceutical supple chain became an issue.

There was wide spread belief that at least 80 percent of legal drugs and ingredients used in the U.S. came from China. (here) A recent comprehensive paper in Reason Magazine strongly suggests otherwise. (here)

The 80 percent number has been passed around without any substantiation. As background, the Food and Drug Administration does not track countries-of-origin for drug or drug ingredient importation, so it is unknown how much comes from China.

The FDA does track how many manufacturing facilities other countries have. For the 370 “essential drugs” on the World Health Organization’s list that are used in the U.S., 15 percent are in China, 21 percent  are in the U.S., and 64 percent are in the rest of world (mainly India and the European Union).

Eric Boehm, the author of the Reason paper, dug deeper. On August 9, 2019, Senator Grassley (R-Iowa) sent a letter to the Department of Health and Human Services asking that the department verify the safety of drugs manufactured in other countries. His office then released a statement declaring that 80 percent of drug ingredients were manufactured in other countries, mainly India and China.

News outlets then transformed Senator Grassley’s statement into “80 percent of drugs used in the U.S. were manufactured in China.” This 80 percent number, although bogus, has been continually repeated. In actuality, the U.S. is not dependant on any one country for our pharmaceuticals.

Of course, the issue of trade with China is much broader than just prescription drugs. According to a recent survey done by the Institute of Supply Management, three fourths of all U.S. companies reported supply chain disruptions in China. (here) This fact, coupled with China’s trade aggression and its known intellectual property theft, make the country a questionable trade partner.

The reassuring fact is that the U.S. is not dependant on China for our pharmaceutical supply.