A Lot Worse

Spectator

By Stephen Tuttle | June 11, 2022

The supply chain is something most of us hadn’t much considered until the various links started breaking. Now, that same broken chain is impacting almost every product we use or consume. In some instances, that impact can be life threatening for individuals and a national security issue for the country. Prescription drugs are the best example.

We are a nation of prescription drug users. Though we are barely more than 4 percent of the world’s population, we consume nearly a third of all the prescription drugs. The Food and Drug Administration (FDA) has approved a stunning 20,000 prescription drugs, and we use all of them. Some 66 percent of American adults take at least one prescription drug daily according to research by Scientific American. Nearly half of us take more than one prescription daily.

The most prescribed drugs are for cancer treatment, high blood pressure, diabetes, high cholesterol, and mental health. According to the Journal of the American Medical Association (JAMA), one in six of us uses some type of prescription psychiatric/mental health drug, mostly for depression and anxiety. In fact, we consume almost all the psychiatric meds produced. As a bonus, we consume most of the antibiotics and more than 30 percent of all legally prescribed opioids. Clearly, we suffer from considerable pain, both physical and mental.

We use more prescription drugs than any other country and pay way more for our drugs than any other country according to the Department of Commerce. Pharmaceutical companies tell us our elevated pricing is necessary because of the significant cost of developing new drugs and because we help subsidize countries whose citizens cannot afford the prices we pay.

(Our use of prescription drugs—which certainly helps many individuals live longer and more productive lives—hasn’t helped much in terms of our collective longevity. Of the 35 developed countries that belong to the Organization for Economic Cooperation and Development, the US ranked 26th in average lifespan.)

Okay, we have more doctors prescribing more drugs to more people. What does that long slog through our prescription drug use history have to do with the supply chain? We are completely dependent on others in the first links of the chain for a huge portion of our prescription drugs.

According to the Department of Commerce, about 25 percent of finished drugs come from China. That doesn’t sound too bad until you discover about 80 percent of the active pharmaceutical ingredients (API) used to make finished drugs come from either China or India. That accounts for nearly 95 percent of our antibiotics and more than half of our opioids not to mention significant percentages of most other drugs including cancer chemotherapy.

It means we have to rely on China or India for both manufacturing and safety standards and for maintaining the first links in the supply chain so those drugs actually arrive.

Some suggest we move away from China and toward India as a primary source of our pharmaceuticals. It’s true we have better diplomatic relations with India, so they are less likely to use our reliance on their drug manufacturing as a bargaining chip. (The Trump Administration excluded both finished pharmaceuticals and the raw ingredients needed to manufacture them here in the $300 billion worth of tariffs slapped on Chinese imports.)

The problem with the India-is-better theory is threefold. First, according to Commerce, drugs and raw materials from India are 35-40 percent more expensive, a reality neither our insurance companies nor individuals like. Second, factories in India have had their share of quality control issues, including one noteworthy 2016 FDA inspection of a raw material plant that found holes in the roof and pigeons freely drifting over the production line. Third, and this is pretty ripe, they get about 75 percent of their raw material for the production of generic drugs from—wait for it—China.

In a minor irony, some of the drugs we do manufacture here using raw material imported from China, especially for non-communicable diseases like cancer, we sell back to the Chinese.

Unfortunately, our dependence on China is not restricted to pharmaceuticals. According to Commerce, about 30 percent of medical supplies, including components of some sophisticated imaging devices, come from China. And despite a lesson we should have learned at the beginning of the pandemic, we still get more than 85 percent of personal protective equipment (PPE) from China.

China is not an ally, but we count on them to help analyze our health and rely on them for life-saving medications and life-enhancing medical equipment. It isn’t hard to imagine how big a problem that could present in a worst-case scenario.

Broken supply chains have bedeviled us for the last two years. If the supply is medicine and the chain starts in China, it could get a lot worse.