Congressmen Optimistic About Bills Decoupling US From China on Drugs but Warn of Long Road Ahead

MIDVALE, UT - SEPTEMBER 10: A pharmacy technician grabs a bottle of drugs off a shelve at the central pharmacy of Intermountain Heathcare on September 10, 2018 in Midvale, Utah. IHC along with other hospitals and philanthropies are launching a nonprofit generic drug company called "Civica Rx" to help reduce cost and shortages of generic drugs. Photo by George Frey/Getty Images

A proposal to bring U.S. supply chains for critical products such as antibiotics and other medicines back from China stands an excellent chance of being approved in Congress, according to Rep. Michael Waltz (R-Fla.), one of the measure’s main proponents.

“I am confident it will pass. I think having both houses of Congress on board, the president is on board, the legislative vehicle and the national mood, I feel confident,” Waltz told The Epoch Times.

“What I am hoping to see is a wake-up call across the United States, not only on our dependency on the Chinese for our supply chain, but also that the Chinese Communist Party (CCP) is not our friend,” Waltz said on April 22.

Waltz is the lead House co-sponsor of the “Strengthening America’s Supply Chain and National Security Act,” which is also backed by Rep. Jim McGovern (D-Mass.).

Sens. Marco Rubio (R-Fla.) and Kevin Cramer (R-N.D.) are co-sponsoring the measure on the Senate side, along with Democratic Sens. Elizabeth Warren of Massachusetts, Chris Murphy of Connecticut and Tim Kaine of Virginia.

The bill is based on a decoupling plan that Rubio described earlier this year on the Medium website. The measure requires the Department of Defense (DOD) to determine the degree of its dependence on China for drugs and to develop a plan to end the dependence.

It also requires the Food and Drug Administration (FDA) to measure the percentage of each ingredient of a drug and its country of origin. Currently, only the country of origin is reported by drugmakers to the FDA.

“As a result, the FDA cannot determine the extent of dependency or target potential risks for drug shortages,” Rubio said in a March 23 statement.

“This pandemic has further underscored the need to look at health care through a national security lens,” Kaine said in the statement with Rubio. “It’s critically important that we gain more knowledge of and control over our medical supply chains to reduce our reliance on other nations and ensure adequate supply in times of crisis.”

The current crisis sparked by the CCP virus, commonly known as the novel coronavirus, has focused public attention on U.S. dependence on China for as much as 90 percent of the ingredients in products such as ibuprofen, hydrocortisone, acetaminophen, multiple antibiotics, and thousands of other medicines.

‘Comprehensive Effort’ Needed

But worries have been growing for years about the rapidly increasing dependence on China. Thousands of domestic companies across wide swaths of U.S. industrial production have shifted manufacturing, jobs, resources, and facilities to the Asian giant to take advantage of its huge low-wage labor force and consumer market of more than 1 billion people.

The decoupling issue isn’t new. President Donald Trump’s tough negotiating stance and higher tariffs on goods imported from China beginning in 2017 put the issue front and center in many corporate boardrooms.

As a result, the Kearney Resharing Index reported earlier this month “a dramatic reversal of a five-year trend, as domestic U.S. manufacturing in 2019 commanded a significantly greater share versus the 14 Asian low-cost countries (LCCs) tracked in our study, with manufacturing imports from China registering a particularly sharp decline.”

Kearney estimated that $31 billion worth of U.S. overseas production was shifted to other countries from China in 2019, including 46 percent of the total going to Vietnam.

A key question is how big a decoupling is a realistic goal.

Asked if he favors a narrowly focused decoupling or across a broader front, Rep. Chuck Fleischmann (R-Tenn.) told The Epoch Times that “at this point in time, we have to realize that, I think, a much more comprehensive effort would be more advisable from the standpoint that we have gotten in a position where we have allowed us over the past couple of decades to actually out-source so many key things.”

Fleischmann, an influential member of the House Appropriations Committee, pointed to the work in his eastern Tennessee district of the Oak Ridge National Laboratory (ORNL) on advanced manufacturing technologies as a key element in decoupling.

“Over the past decade, when China would move into an area, let’s say the molds used in manufacturing, ORNL has been working from a technology standpoint to give American manufacturers an added technological advantage,” said Fleischmann, who is a co-chairman of the House Science and National Labs Caucus.

Deregulation

Rep. Ted Budd (R-N.C.), told The Epoch Times on April 22 that he doubts “we will ever get to a total decoupling and I hope we continue our relationship with China, but we have to realize their aims may not be as pure in economics as we thought.”

Budd also co-sponsors with Reps. Mike Gallagher (R-Wis.) and Elise Stefanik (R-N.Y.) the “Protecting our Pharmaceutical Supply Chain from China Act.”

Budd said more aggressive deregulation of the U.S. economy would greatly encourage the decoupling process.

“One of the things that we can do is to massively deregulate, so that we can unshackle our own economy, so we can competitively produce the things we don’t source to China,” Budd said. “The biggest inhibitor to decoupling is a multi-layered regulatory scheme, if that’s the FDA, or our labor policy, or whatever, it’s the things that drive things offshore.”

Deregulation will generate increased opportunities for individuals and strengthen the nation as more is produced here, Budd said.

Waltz said U.S. firms worried about losing a lucrative market of 1 billion customers should look to India as decoupling from China progresses.

“That is one of the key strategic relationships of the 21st century,” Waltz said. “It’s the world’s largest democracy, it’s going to be a financial powerhouse, it’s a hedge against China, and they’re in line with our values.”

Contact Mark Tapscott at [email protected]