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MedicineIndia and China are the dominant -- and in many cases sole -- suppliers of active pharmaceutical ingredients and other raw materials for many life-saving drugs needed by U.S. patients, reports Monday's New York Times. "The critical ingredients for most antibiotics are now made almost exclusively in China and India," the article states. "The same is true for dozens of other crucial medicines, including the popular allergy medicine prednisone; metformin, for diabetes; and amlodipine, for high blood pressure." Dr. Yusuf K. Hamied, who runs the large pharmaceutical ingredient supplier Cipla, remarks on the vulnerability of the drug supply chain to disruption: “If tomorrow China stopped supplying pharmaceutical ingredients, the worldwide pharmaceutical industry would collapse." Noting the limited ability of the U.S. Food and Drug Administration to even track the geographic origin of key pharmaceutical inputs let alone fully assure their quality, the article focuses on the potential risks for health in the United States in the event that the source countries have lax safety controls or restrict access to drugs as a means of exerting pressure during political disputes.

After decades in which the global pharmaceutical industry was based primarily in the U.S. and closely allied countries, we are getting a taste of our own medicine. We're learning what many low- and middle-income countries have always known: that national security and welfare is vulnerable without reliable access to drugs and vaccines -- a hard objective to achieve when supply chains are fragmented and controlled outside of national borders. The tempting response is to seek self-sufficiency in the production of essential medicines. We've seen this as part of Brazil's approach to health and industrial policies, in India's public policies that favor the expansion of the domestic pharmaceutical industry, in Cuba's production of vaccines, and in the attempts of other countries to make drugs at home. In the U.S., the New York Times reports, the impulse is the same: "Experts and lawmakers are growing more and more concerned that the nation is far too reliant on medicine from abroad, and they are calling for a law that would require that certain drugs be made or stockpiled in the United States."

Seeking self-sufficiency in drug manufacture is a hard way to go, and may not be the best route to reliable supply of quality medicines. First, it requires counteracting the market forces that are leading to outsourcing and the growth of manufacture in countries where labor and other inputs are relatively inexpensive. India and China, which have massive and fast-growing domestic markets and are attractive to both local and multinational firms, will certainly have only more significant pharma sectors in the future. Their engagement in global markets should be welcomed rather than defended against. Second, only those countries with significant technical capacity, a decent regulatory authority and access to credit markets have a chance of growing or re-growing drug manufacturing at large scale. Other countries, many of which depend on the relatively low-cost products from emerging manufacturers, will be in the same boat they are now in, or worse if we focus on inward-looking solutions to drug supply and quality.

A sounder approach, and one that would benefit a much broader set of countries, is to work toward stronger multilateral collaboration to assure the quality of pharmaceutical ingredients and the dependability of supply chains. This is admittedly a complex task, particularly in setting out the roles of national regulatory authorities and establishing internationally acceptable standards. In that complexity, it's similar to other contemporary global problems in which nations' fates are intertwined -- financial markets, for example, and carbon emissions. But if we don't take on the challenge and push for a truly global approach and instead focus on go-it-alone reactive solutions, the existing inequalities in drug access will be exacerbated and we won't all benefit from the potential efficiencies of global supply chains. This is one of the important tasks that could and should be part of the agenda of the to-be-named new head of the FDA.

 

CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.

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