House Speaker Nancy Pelosi (D-Calif.) larded up (and stalled) the $2 trillion stimulus bill with a shameful Democrat wish-list heavy on identity politics and climate change.
As loathsome as her tactics, her instincts are correct: We should not allow this crisis to go to waste. But rather than demanding diversity on corporate boards, or new emissions standards for airplanes, as Pelosi did, President Trump should move to reduce America’s dependence on Chinese medical supplies and drugs.
The emergency legislation just passed reportedly started that process by requiring that the National Academies of Sciences, Engineering, and Medicine study our medical supply chains to assess the sourcing and availability of critical products and pharmaceuticals.
We can anticipate what that study will discover: We rely much too heavily on imported pharmaceuticals and other medical supplies — and especially on goods produced in China.
Legislators know this, which is why a couple of weeks ago Sens. Marsha Blackburn (R-Tenn.) and Bob Menendez (D-N.J.) introduced a bill that would provide $100 million to encourage U.S. companies to make pharmaceutical products and medical supplies in the U.S. Helpful, but most likely not enough.
The New York Times recently quoted Yanzhong Huang, a global health expert at the Council on Foreign Relations, affirming that “Chinese pharmaceutical companies have supplied more than 90 percent of U.S. antibiotics, vitamin C, ibuprofen and hydrocortisone, as well as 70 percent of acetaminophen and 40 to 45 percent of heparin in recent years…”.
This dependence on a rival authoritarian government is unacceptable. The risk of being at the mercy of Beijing became all too clear when the official party newspaper recently threatened that if China withheld needed medical supplies, America would “sink into the hell of a novel coronavirus epidemic.” They were right.
It isn’t just because of possible hostilities that we should be working overtime to resolve this problem. It turns out that many products manufactured in China are not reliable. Spain and Germany have reported receiving inaccurate coronavirus tests kits from China, and other products are often flawed as well.
Indeed, a new company called Valisure is providing generic drugs on the internet, offering a unique pitch: It batch-tests all the product it sells. Why? Because, as the company points out, now that some 80 percent of such pharmaceuticals are made in China or India, where the FDA has little inspection capability, the products being sold are often flawed.
Valisure proclaims in its promotional materials that “It is estimated that approximately 1,000 facilities [overseas] have never even been inspected by the FDA.” They further claim that, “The FDA very rarely tests medications itself.”
As if quality control issues were not grave enough, there is also the issue of steady availability. The COVID-19 outbreak has led to widespread supply chain interruptions in goods made in China. While we can make do temporarily without new trucks or toys, we cannot accept shortages of medicines or medical supplies.
After all, many have noted that the Wuhan virus is not a one-off. Other monster diseases have originated in China, including “Two of the devastating flu pandemics of the 20th century — the Asian flu of 1957 and the Hong Kong flu of 1968” which together caused about 3 million deaths around the globe, according to the New York Times. The 2003 outbreak of SARS, which killed nearly 800 people, also came from China.
Those epidemics came at a time when the world, and the U.S. in particular, was not so intertwined with China, and when their economy was much, much smaller. Today such diseases threaten us as never before.
The Times reports that one drug made in China is already in short supply in the U.S. today, while the FDA is carefully watching the availability of many more.
China is not our only source of pharmaceuticals; India, too, has become an unreliable supplier, as their government ordered their drug companies to halt certain exports almost a month ago, protecting domestic supplies.
This is certainly within India’s rights, but for the U.S. it is untenable. We can fix this, and we must.
In our free enterprise system, the government cannot mandate where U.S. companies produce their goods. But we can manage our tax code to make it more attractive to manufacture in the U.S. That was the purpose of the 2017 tax rewrite engineered by Republicans; reducing the corporate tax rate was designed to make the U.S. competitive again, and it has helped.
But, given enduring labor cost advantages held by countries like India and China, encouraging our leading pharmaceutical and medical supply firms to bring production home will require more.
One idea might be to restore the tax exemptions that once built a flourishing drug industry in Puerto Rico. As Puerto Rico attempts to climb out of a fiscal ditch and turn around its declining population and economy, renewed growth in its medical supplies industry could prove a godsend. Labor costs are comparatively low in Puerto Rico, and with 60-some companies still producing pharmaceuticals on the island, the infrastructure exists to support the industry.
We must work to reduce our reliance on foreign-made drugs and supplies, even when the coronavirus pandemic winds down and our politicians become distracted. Unhappily, that is what will likely happen.
In the aftermath of Superstorm Sandy, for instance, had New York’s leaders followed recommendations to stockpile critical medical supplies, residents of the Empire State might be better protected today.
Inertia is not the only possible roadblock. Given Democrats’ absurd outcry about President Trump naming the pandemic the “Chinese virus,” they might lodge complaints about targeting Chinese supply chains. Such objections must be ignored.
The security of Americans does not rely only on tanks and guns; we also need pharmaceuticals and medical supplies to keep us safe. And we need those products to be made on U.S. soil.
Liz Peek is a former partner of major bracket Wall Street firm Wertheim & Company. Follow her on Twitter @lizpeek.