The coronavirus outbreak has exposed the United States’ dangerous dependence on China for pharmaceutical and medical supplies, including an estimated 97 percent of all antibiotics and 80 percent of the active pharmaceutical ingredients needed to produce drugs in the United States.
The economic repercussions of the coronavirus reveal the dangers of allowing one country to have a near monopoly on global manufacturing, David Dayen explains in an article at the American Prospect:
A substantial number of the materials needed for defense and electronic systems come from China, and that nation is “the single or sole supplier for a number of specialty chemicals,” according to a recent Defense Department report.
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China produces and exports a large amount of pharmaceuticals to the U.S., including 97 percent of all antibiotics and 80 percent of the active ingredients used to make drugs here. Penicillin, ibuprofen, and aspirin largely come from China.
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In testimony yesterday before the Senate Committee on Homeland Security and Governmental Affairs, Scott Gottlieb, a physician and the former Food and Drug Administration commissioner in the Trump administration, explained in detail the extent of the U.S. pharmaceutical industry’s dependence on China:
About 40 percent of generic drugs sold in the U.S. have only a single manufacturer. A significant supply chain disruption could cause shortages for some of many of these products.
Last year, manufacturing of intermediate or finished goods in China, as well as pharmaceutical source material, accounted for 95 percent of U.S. imports of ibuprofen, 91 percent of U.S. imports of hydrocortisone, 70 percent of U.S. imports of acetaminophen, 40 to 45 percent of U.S. imports of penicillin, and 40 percent of U.S. imports of heparin, according to the Commerce Department. In total, 80 percent of the U.S. supply of antibiotics are made in China.
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Moreover, when it comes to starting material for the manufacture of pharmaceutical ingredients, a lot of this production is centered in China’s Hubei Provence, the epicenter of coronavirus. Most drug makers have a one to three-months of inventory of drug ingredients on hand. But these supplies are already being drawn down. Among big [active pharmaceutical ingredient] makers in Wuhan are Wuhan Shiji Pharmaceutical, Chemwerth, Hubei Biocause, Wuhan Calmland Pharmaceuticals.
Gottlieb notes that “80 percent of the U.S. supply of antibiotics are made in China.” The sourcing of this estimate is explained in greater detail in section three of the U.S.-China Economic and Security Review Commission’s 2019 report to Congress, titled “ Growing U.S. Reliance on China’s Biotech and Pharmaceutical Products.”
The report notes that 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.” The report further explains that although India is the world’s leading supplier of generic drugs, India gets 80 percent of its active pharmaceutical ingredients directly from China. The United States also imports 80 percent of its APIs from overseas (primarily from India and China) and “a substantial portion” of its generic drugs “either directly from China or from third countries like India that use APIs sourced from China.”
In other words, almost all pharmaceutical roads lead to China.
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