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Outside the Box: China has cornered the market on antibiotics, so the U.S. must rebuild its manufacturing capacity

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As Congress and the White House debate a potentially wide-ranging infrastructure package, federal investment to bring antibiotic production back to the U.S. should be a top priority. 

Right now, the U.S. has virtually no capacity to manufacture antibiotics. That’s because China currently controls roughly 90% of the global supply of inputs needed to make the generic antibiotics that treat bronchitis, pneumonia, pediatric ear infections, and life-threatening conditions such as sepsis.

At the peak of last year’s COVID-19 hospitalizations in the U.S., these generic antibiotics—including azithromycin—were urgently needed to treat secondary bacterial infections. However, the U.S. faced a potential shortage, since the key materials for azithromycin and other drugs are supplied by China. 

Unprepared for infections

The COVID-19 pandemic has made the general public more aware of the consequences of widespread viral infection. But the U.S. remains completely unprepared for a disease outbreak caused by bacterial infection. Most of the 675,000 Americans who died during the 1918-1919 influenza pandemic, for example, succumbed to bacterial pneumonia after becoming ill from the flu virus. If the U.S. were unable to obtain timely supplies of needed antibiotics in a similar situation, the consequences could be catastrophic.

The Chinese government already knows that the U.S. is acutely vulnerable to antibiotic shortages. In fact, Beijing has orchestrated a long-term cartel strategy that successfully drove the production of antibiotics—and thousands of other generic drugs—out of the United States.

In the case of penicillin, for example, the last U.S. penicillin fermentation plant—which once produced 70% of the world’s supply—closed in 2004. This was the result of Beijing strategically subsidizing its domestic drug manufacturing companies as they frequently sold drug inputs at below market prices. U.S. producers gradually went out of business, and Beijing now enjoys a major return on its investment through increased control of global pharmaceutical supplies.  

Today, China is the main source of the key ingredients for both penicillin and another class of antibiotics, cephalosporins. Together these drugs comprise two-thirds of the antibiotics used in the U.S. each day.

 Monopoly prices

China’s domination of global drug inputs didn’t happen overnight, though. But many praised this trend, believing that the outsourcing of America’s drugmaking capacity would simply yield cheaper prices. Ironically, with Beijing now holding a virtual monopoly on medicine inputs, it can charge monopoly prices.

Last month, China slapped a 100% increase on the price of critical components for antibiotics and acetaminophen sold to drug manufacturers in India. Unfortunately for India, this price increase coincided with a surge in COVID-19 cases throughout the country. 

Globally, such heavy dependence on China has little precedent. For example, no country would allow one nation to control 90% of the world’s oil supply. In the same way, Washington must not allow global antibiotic production to be centralized in a single country.  

Last month, when a giant cargo ship ran aground in the Suez Canal, global trade was snarled. More than 200 vessels carrying billions of dollars’ worth of goods were left waiting to get through the canal. Such a bottleneck could pale in comparison to potential antibiotic shortages. If U.S.-China tensions were to escalate over Taiwan, trade corridors and supply chains would be at risk of massive disruption—including the freighters expected to bring antibiotics to America’s hospitals and pharmacies. 

The perils of stockpiling

Some argue that the U.S. doesn’t need to make antibiotics. They believe the nation can simply stockpile supplies and rely on allies. But this is foolhardy. How would the Strategic National Stockpile be replenished in the middle of a pandemic, or if trade routes were blocked? And allies would likely need to keep antibiotic supplies for their own people.

As the U.S. seeks to build back better, what’s needed is a public-private partnership to help the nation prepare for the next pandemic or other crisis. The private market alone can’t fix this problem since U.S. companies can’t compete head-on with the full resources of the Chinese government. The harsh truth is that, without a federal partnership to invest in domestic antibiotic manufacturing capacity, U.S. producers don’t stand a chance. 

Americans of every political stripe are equally vulnerable to illness—and should be equally concerned about a future antibiotic shortage. As the infrastructure debate moves forward, Washington must include the rebuilding of antibiotic production as a national priority—before it’s too late.

Rosemary Gibson is chairwoman of the Coalition for a Prosperous America’s health-care committee and the author of “China Rx: Exposing the Risks of America’s Dependence on China for Medicine.”

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