Despite recent peace talks around the Russia-Ukraine conflict receiving wall-to-wall news coverage, it’s important to remember that China remains America’s top geopolitical threat. While a ceasefire in Europe is welcome, U.S. officials and policymakers need to keep their eye on the ball. Otherwise, we could be caught flat-footed.
Restoring shipbuilding capabilities, replenishing munitions stockpiles, and continuing to lead in military innovation are necessary steps. But America should also prepare for less conventional wartime threats. The U.S. medicine supply chain is extremely vulnerable to Chinese shenanigans. If diplomatic relations go sideways, cutting it off could be just as lethal as tanks or drones.
Few industries are more vital to our national security than the biomedical sector. And yet, for far too long, we’ve ceded ground to foreign suppliers. Today, 90% of prescriptions filled in the United States are generic products — a majority of which rely on active pharmaceutical ingredients from China.
Additionally, the Chinese government is gunning to dethrone the U.S. as a global leader in biotech innovation. China’s subsidies have made drug development cheaper and clinical trials faster, giving its firms a competitive edge. This year alone, Chinese companies accounted for one-third of global biopharma licensing deals — increasing six-fold since 2015.
While China has focused on gaining the upper hand, the West has fallen victim to self-sabotage. Rather than shoring up its own pharmaceutical industry by unleashing the power of the free market, Europe has largely given in to socialized medicine by adopting government price controls. As a result, private incentives to invest in production are undermined, and the continent’s manufacturing capacity has been gutted.
Now, the U.S. is charting a similarly self-destructive course. In 2022, then-President Joe Biden instituted a heavy-handed government scheme to manipulate medicine prices as part of the Inflation Reduction Act. The current administration is doubling down on the failing policy by affixing even more government puppet strings on the free market, which could further jeopardize American pharmaceutical leadership.
History shows that Beijing is no stranger to taking advantage of lopsided supply chains.
Following the first round of tariff talks in April, for example, China halted the export of rare earth metals to the U.S., minerals that are needed for technologies ranging from smartphones to missile defense systems. In the early days of the COVID-19 pandemic, Chinese officials threatened to halt exports of key medical equipment as the U.S. mulled travel restrictions.
Given the clear safety threats, the current administration should move swiftly to bring pharmaceutical manufacturing closer to home. Fortunately, the U.S. already has the infrastructure to make that happen.
States such as North Carolina, Indiana, Ohio, and Pennsylvania are established industry hubs equipped with well-trained workforces, modern infrastructure, and friendly investment climates. When coupled with the White House’s regulatory and tax incentives, companies are already capitalizing on the opportunity to the tune of tens of billions of dollars.
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The U.S. territory of Puerto Rico is another feather in America’s manufacturing cap. The island is currently the country’s second-largest pharmaceutical producer and has long supported large-scale medicine production. With the recent shake-up at the Financial Oversight and Management Board for Puerto Rico, we have an opening to improve the island’s infrastructure and build out manufacturing capacity.
No one wants war. But when it comes to China, geopolitical realities require the U.S. to hope for the best but prepare for the worst. National defense depends just as much on access to medicine as other critical supply chains that help build fighter jets, ships, and missiles. Regulatory and tax policies should reflect as much.
Dr. Tom Price served as the 23rd U.S. Secretary of Health and Human Services and is a former member of Congress from Georgia.
