Bill would limit U.S. dependency on China pharmaceuticals

03.23.2020.

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Sen. Tom Cotton
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Sen. Tom Cotton on Thursday introduced legislation aimed at ending America’s reliance on Chinese pharmaceutical manufacturing, which was exposed by the coronavirus crisis.

Cotton, Arkansas Republican, introduced legislation to limit the volume of Chinese active pharmaceutical ingredients (APIs) from the U.S. medical drug supply.

APIs are the “active ingredients” in commonly-used drugs. China currently produces most of the world’s APIs

“China unleashed this plague on the world, and China has to be held accountable,” said Cotton during a Fox News interview on Wednesday. “It’s too grave a threat to let our health rest on Chinese drugs.”

Census Bureau data show that U.S. pharmaceutical imports have grown from $179 million in 2000 to $1.56 billion in 2019, a nearly 800 percent increase.

Cotton introduced the bill on Thursday along with Rep. Mike Gallagher, Wisconsin Republican.

In the pharmaceutical industry, most of the actual innovation is done in the United States, Europe, and Japan, but China does much of the assembly.

Cotton said his legislation would directly target China’s API producers. It would required the FDA to track the point of origin for APIs and drugs made outside of the United States, as well as requiring drug companies to list the country of origin for APIs on their products. It would also prohibit all federal entities — including the Departments of Health and Human Services, Veterans Affairs, and Defense — from purchasing drugs that use APIs made in China.

The bill also would allow domestic manufacturers to immediately expense the costs of expanding production capacity, giving such businesses a major write-off on their taxes. If successful, that provision could help U.S.-based manufacturers compete with lower-cost Chinese ones, keeping drug prices low even as production moves back to the United States, Cotton said.

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