【By Observer Net, Qi Qian】

Recently, Western media have frequently reported on the issue of pharmaceutical raw material supply chains under the so-called "nuclear option" and "potential bottlenecks".

On November 26, the U.S. media Bloomberg published an opinion article stating that China "controls all the power in global pharmaceuticals", strictly controlling the raw materials required for various drugs, which constitutes a potential supply chain bottleneck that Washington has ignored. The article mentioned that the U.S. Congress is currently pushing a plan to collaborate with allies such as India to create an alternative supply chain, to be independent of China in specific areas.

According to reports, last week, the U.S.-China Economic and Security Review Commission released its annual report, emphasizing the urgency for the United States to address drug supply issues.

The report recommends that Congress immediately amend a 2020 law, expanding the authority of the Federal Food and Drug Administration (FDA), requiring pharmaceutical companies to report the sources and quantities of key components of modern medicines. The report also asks regulatory agencies to encourage the use of supplies from non-Chinese sources.

Bloomberg stated that this is not the first time the commission has raised this issue. Last month, after China introduced export controls on critical rare earth minerals, the U.S. government almost immediately made concessions. For many Americans, this indicates that this obvious vulnerability can no longer be ignored.

It is reported that the United States and other countries rely heavily on China for the basic ingredients of drugs. Due to China's large-scale and commercialized industry since the 1950s, China plays an extraordinary role in the global drug supply chain. China is the main producer of compounds called Key Starting Materials (KSM), which are used to produce Active Pharmaceutical Ingredients (API).

Exact data on the extent of America's reliance is still difficult to obtain. Major pharmaceutical companies rarely detail the depth of this reliance.

However, the American Pharmacopoeia recently found that according to the drug master files submitted by pharmaceutical companies to the FDA, in 1980, China was not present in this field; two decades later, China submitted 5% of the files, behind India's 19%; but by last year, China exceeded India with 45% of the total filings.

The report pointed out that more complexly, India, as the world's largest supplier of generic drugs, itself highly relies on China for key starting materials, which is not reflected in FDA filings.

Data shows that China and India dominate the U.S. pharmaceutical supply chain. Bloomberg chart

In addition, the "American Pharmacopoeia" found a key trend: half of the active ingredients used in the U.S. come from a single source - China.

Data shows that China is the sole supplier of at least one chemical substance for nearly 700 key drugs. For example, the antibiotic amoxicillin appears to have multiple sources from Spain to Singapore, but its four key ingredients are almost entirely sourced from China.

"It is unwise for any country to rely on a single source, especially for the United States, where the source is an adversary," the article claimed, but it is worth noting that even during the peak of the trade war, China never threatened to restrict medical exports. "But geopolitical factors are not the only risk factor; another global virus outbreak could also cause supply chain disruptions."

37% of U.S. drugs use at least one ingredient solely sourced from China. Bloomberg chart

Commission member Leland Miller said that China controls "most" of the active pharmaceutical ingredients, which is worrying. He told Bloomberg that the organization cannot directly command Congress, but its ultimate goal is to create a supply chain involving India and other allies, becoming independent of China in specific areas.

The report said that the situation in the pharmaceutical industry may be similar to that of critical minerals. China controls the lifelines in many key areas, but the U.S. will have to decouple in areas it considers involving "national security priorities".

However, Bloomberg bluntly stated that this would be a daunting task, as U.S. pharmaceutical factories would consider it unprofitable. The report cited a Chinese company executive who said that if U.S. companies tried to replicate the raw material supply chain, costs would increase by 50%.

Facing China's rare earth move, the West recently panicked and started projecting their own fears onto others.

"The Chinese pharmaceutical lever is a 'nuclear option' in U.S. trade negotiations," Bloomberg wrote in October, stating that China controls a more critical supply chain - medicine. Several U.S. legislators and officials claimed that China has not yet used this trade "nuclear option", but if President Trump continues to escalate the trade war to its highest level, this situation may change.

But in fact, the U.S. above fantasies are purely projection and blaming the innocent.

The Trump administration has ignored the health of its citizens, already taking action in the pharmaceutical sector. The U.S. previously announced that from April onwards, it would impose tariffs of up to 145% on medical devices, electronic products, and other imports from China. Trump also said he would impose a 100% tariff on imported patented drugs from October 1st. He recently said in an interview that he would bring drug production back to the U.S., "everything will return".

The British magazine The Economist published an article on November 23 stating: "China's pharmaceutical industry is at a crucial stage in its global expansion."

The article stated that Chinese pharmaceutical companies are rapidly rising in new drug development, number of clinical trials, and international cooperation. They have established a leading advantage through fast iteration, low cost, abundant clinical resources, and a transition from "follow-on innovation" to "first-of-a-kind innovation." Although the U.S. hopes to reduce its dependence on China's supply chain, in reality, U.S. manufacturers and patients may end up relying more on China.

This article is an exclusive article by Observer Net. Reproduction without permission is prohibited.

Original: https://www.toutiao.com/article/7576831463509836323/

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