Indian and Chinese pharmaceutical companies are increasingly under scrutiny in Washington
The pandemic has revealed gaping holes in US supply chains. Everybody knows it. Everything related to medicine was in focus when it came to critical items missing in combat. The country’s overreliance on China and India, especially for medical supplies, namely major generic drugs, is attracting Washington’s attention. Little has been done to counter it so far. This is subject to change.
A poll conducted by Morning Consult conducted on behalf of the newly formed advocacy group Americans for Safe Medicines showed that 85% of respondents expressed concern about the pharmaceutical industry’s reliance on India and China. Another 70% said the United States should not depend on foreign sources for major generic drugs.
This dependence is obvious. The United States imports about two-thirds of its generic drug needs and almost 90% of generic APIs came from foreign laboratories.
Main Street understands the anecdotal evidence of the supply chain mess.
Remember when we all had to wear masks and no one could buy them so they made semi useless ones out of fabrics because China was the go-to manufacturer of N95s and the kind of masks you might see wear by your dental hygienist. Generic drugs are a more serious problem.
India has stopped exporting key medicines during the pandemic. The main one was the antimalarial drug hydroxychloroquine, and all the active ingredients that go into making it (or APIs as they’re called). Hydroxychloroquine was distributed in India as a means of combating Covid. In all, some 26 APIs were banned from shipping overseas.
China under threat to stop selling key starting materials for APIs, as well as APIs – that go into the final drug in tablet or liquid form. It was revenge for the travel ban and for the Trump administration blaming them for the outbreak in Wuhan in 2020.
China never responded to this threat. But it was enough to give local drugmakers a window of opportunity to show how India and China, more often competitors than partners, can hurt America’s supply chain of essential drugs.
The government is attentive but late.
Two years ago, in the fall of 2020, the Food and Drug Administration, at the behest of the Trump White House, compiled a list of hundreds of drugs it deemed essential that were either produced only overseas – namely in Indian and European laboratories – or were in short supply in national stocks.
Many members of Congress have introduced fourth bills to help produce these drugs in the United States, but none of them have yet passed.
In March, Sen. Tina Smith’s (D-MN) Essential Antibiotics Relocation Act and Sen. Jacky Rosen’s (D-NV) Strategic Planning Act for Manufacturing Emergency Medical Products were approved unanimously by a Senate committee to be part of the PREVENT Pandemics Act. No date has been set for a floor vote on this bill.
The Smith Amendment would provide $500 million in subsidies to domestic drugmakers.
“We should be able to produce the essential antibiotics that Americans need right here on American soil. This is a matter of public health and national security,” Smith said in a statement. “By strengthening our country’s capacity to manufacture and stockpile essential medicines, we will have more certainty and resources to promote public health during the pandemic and beyond.”
Overseas drug manufacturers are rarely inspected by the FDA. When an inspector discovers a problem with the laboratory or the processing of the drugs, the company receives a so-called warning letter. Indian API makers – such as Aurobindo Pharmaceuticals – are primarily the recipients of these letters. Chinese facilities for essential raw materials are not inspected at all.
Companies that receive warning letters are still allowed to sell pharmaceuticals in the United States. It also prompted opposition from local generic pharmaceutical companies, leading to the creation of the American for Safe Drugs group. Their Morning Consult poll showed that more than 80% of respondents wanted these drugs banned or inspected upon arrival at a US port before being administered to patients.
Some 86% of those polls said they felt it was important for the US government to support domestic generic drug producers.
Yet companies often receive these letters and remain operational in the United States.
On March 30, 2022, a website called Premium Light Supplier, with a San Francisco phone number, received a warning letter from the FDA for selling illegal and uninspected drugs.
Although the FDA site did not specify where this company was based, it is most likely a direct-to-consumer US e-commerce operation selling $6 per Adderall pill and $4 per pill Celexa antidepressant.
The FDA warning letter stated:
“The ready availability of these stimulants via the Internet poses additional significant risks to US consumers. Additionally, the sale of mislabeled drugs, including mislabeled stimulants, poses an inherent risk to consumers who purchase these products. Drugs that have circumvented regulatory safeguards may be contaminated, counterfeit, contain varying amounts of active ingredients, or contain completely different ingredients.
Nevertheless, it seemed easy enough to buy Percocets for $400.
The United States is no longer a manufacturer of generic antibiotics, but rather depends on imports. This includes drugs for children’s ear infections, strep throat, pneumonia, urinary tract infections, sexually transmitted diseases, drugs for Lyme disease like doxycycline, and other infections.
“People should know who makes their generic drugs; these are foreign manufacturers in China and India, and too many of these companies are violating FDA safety regulations,” said Rosemary Gibson, author of the book China Rx. “The key to solving this problem is to relocate the generic pharmaceutical manufacturing industry.”
China’s pharmaceutical exports are now in decline, although this is due to a change in the nature of the SARS2 pandemic.
China has also tried Tightening on the private companies giving it a bad name, whether in pharmaceuticals – an industry where China sees itself becoming world-class – or in medical equipment.