Guest Post by John Ayers (first posted on CERM ® RISK INSIGHTS – reposted here with permission)
I was shocked to find out about our drug and medical supplies reliance on China, a dangerous risk to the U.S. I believe most Americans were also shocked. I believe this revelation is a game changer and the American people will insist on change.
CHINA’S MONOPOLY ON U.S. DRUG AND MEDICAL SUPPLIES RISK
The coronavirus outbreak has exposed to the public the U.S. dangerous dependence on China for pharmaceutical and medical supplies. The government was well aware of the situation but not the public. Americans are accepting of China producing low cost electronics, clothes, etc. I do not believe they are ok with China controlling their health needs.
China controls an estimated 97 percent of all antibiotics and 80 percent of the active pharmaceutical ingredients need to produce drugs in the U.S. Penicillin, ibuprofen, and aspirin largely come from China. Many of the drugs that Americans depend on, including, birth control pills, antibiotics, vitamin C and cancer drugs are made in China with little regulation. The Food and Drug Administration (FDA) recently recalled Valsartin (blood pressure medication) that may have been contaminated by a carcinogenic toxin. This is a major safety and quality risk.
Most of the worlds face masks are made in China. During the coronavirus breakout in China, they declared face masks as a strategic resource reserving them for their medical workers. This may help explain why the U.S. has such a shortage of the masks.
How did China come to be the world’s pharmacy? China achieved this domination in the pharmaceutical industry by the same methods it used to dominate the steel industry. It accomplished it by anti-competitive trade practices that dumped cheap state-subsidized products on foreign markets to drive competitors out of business.
Now that we know about the risk, what can be done to mitigate it. Some have suggested the U.S. switch to India as an alternative supplier. It is true India has many pharmaceutical firms that are leading drug manufacturers, but it depends on China for approximately 75% of generic drug formulations. India also has its own drug safety and quality issues. In addition, switching to India would only make the drugs we get from China more expensive.
The near-term solution involves:
- Gathering as much data as possible for a full assessment of the risks we face
- Expand the FDA’s inspection activities in China
- Help beef up the regulations in China
- Increase oversight of China to ensure they follow the appropriate processes
The long-term solution involves:
- Nurture the development of sources in the U.S. for the critical drugs and medical equipment
Unfortunately, it takes a crisis or a tragedy to identify risks that are not known to the average American but can harm them greatly. Case in point is China’s dominance of the pharmaceutical industry. This health crises that affects everyone in the U.S. and the world that relies on drugs and medical equipment id controlled by China. This is a game changer for Americans and the world.
In the short term, we need to increase our inspections and oversite of China. In the long term, we need to develop sources in the US and other foreign alternative suppliers. We need to diversify our supply chain sources.
Keep in mind, the last U.S. plant manufacturing the penicillin closed in 2004. We face great challenges ahead to fix this problem. The American people can help by contacting their Senators’ and Representors’ and tell them no more. We will not tolerate China’s dominance of our drugs and medical equipment
Currently John is an author, writer and consultant. He authored a book entitled ‘Project Risk Management. He has written numerous risk papers and articles. He writes a risk column for CERM.
John earned a BS in Mechanical Engineering and MS in Engineering Management from Northeastern University. He has extensive experience with commercial and DOD companies. He is a member of PMI (Project Management Institute). John has managed numerous large high technical development programs worth in excessive of $100M. He has extensive subcontract management experience domestically and foreign. John has held a number of positions over his career including: Director of Programs; Director of Operations; Program Manager; Project Engineer; Engineering Manager; and Design Engineer. He has experience with: design; manufacturing; test; integration; subcontract management; contracts; project management; risk management; and quality control. John is a certified six sigma specialist, and certified to level 2 EVM (earned value management).https://projectriskmanagement.info/
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