US Senate targets China's drug supply grip
Washington, July 16
A bipartisan group of US senators has unveiled legislation to increase scrutiny of foreign ownership in America's pharmaceutical industry, warning that growing dependence on China for critical medicines and drug ingredients poses risks to US national security and public health.
The proposed Pharmaceutical Investment Oversight and Accountability Act, introduced by Senate Special Committee on Aging Chairman Rick Scott along with Ranking Member Kirsten Gillibrand and Senator Elizabeth Warren on Wednesday (local time), would require annual reports to Congress on foreign investment in pharmaceutical manufacturing and related technologies.
Supporters said the measure is intended to improve transparency over who ultimately owns or controls companies that supply medicines to Americans.
"The American people, and especially seniors, deserve to know who actually controls the medicines keeping them alive," Scott said while opening the hearing.
Scott argued that Washington lacks a complete picture of foreign ownership across the pharmaceutical supply chain, including facilities that manufacture medicines, produce key ingredients or hold sensitive clinical data. He warned that geopolitical tensions could expose vulnerabilities if critical supplies were disrupted.
Gillibrand said the United States remained heavily dependent on China and India for key starting materials and active pharmaceutical ingredients used to manufacture many generic medicines. She said stronger oversight was needed to understand the extent of foreign influence while ensuring that trusted international investment continues.
"We must bolster federal oversight efforts and increase transparency on how foreign capital impacts American health care infrastructure," Gillibrand said.
Several witnesses told the committee that China has expanded its presence beyond generic drug manufacturing into biotechnology research, clinical trials and pharmaceutical innovation, raising concerns about long-term US competitiveness and supply chain resilience.
Former Commerce Department official Nazak Nikakhtar urged Congress to tighten oversight of Chinese investments in US biotechnology companies. She argued that existing laws leave significant gaps, allowing some investments, licensing arrangements and data-sharing agreements to escape government review.
Stephen Ezell, vice president at the Information Technology and Innovation Foundation, said China has used industrial subsidies, aggressive pricing and acquisitions to build a dominant position across the pharmaceutical value chain.
He called for stronger disclosure rules requiring companies operating in strategic sectors to identify their beneficial ownership and foreign control.
Rush Doshi, director of the China Strategy Initiative at the Council on Foreign Relations, said the United States had become increasingly dependent on Chinese suppliers for upstream pharmaceutical inputs used in hundreds of medicines.
He urged Washington to diversify production, strengthen domestic manufacturing and expand cooperation with allies.
Speaking specifically about India, Ezell said New Delhi could become an important partner in reducing dependence on China. He suggested that pharmaceutical cooperation should become part of the broader US-India strategic partnership, alongside collaboration in semiconductors, artificial intelligence and critical minerals.
He also said the US Development Finance Corporation could support pharmaceutical manufacturing in India through loan guarantees and other financing tools.
— IANS
Reader Comments
This feels like more Cold War rhetoric dressed up as a security bill. China has been supplying medicines to the world for decades without major incidents. Instead of blaming others, maybe the US should invest in its own manufacturing capacity rather than trying to micro-manage foreign investment. The real problem is corporate greed, not Chinese ownership.
As someone working in Indian pharma exports, I can tell you this move is long overdue. China's dominance in pharmaceutical intermediates is scary - they control over 80% of some key starting materials. During COVID, we saw how quickly supply chains can break. India should position itself as a trusted alternative, not just for APIs but for innovation too. But we need massive investment in R&D and technology upgrades first. 🤔
Another protectionist bill from Washington. They forgot that globalization works both ways - US companies have been outsourcing production to China for cheap labor and lax regulations for decades. Now they want to blame China for their own shortsightedness. India should be careful about getting too close to US strategy - we need to maintain our independent foreign policy and not become a pawn in US-China rivalry.
This is actually good news for India! The US is recognizing India as a strategic partner in pharma, just like in semiconductors and AI. Our 'Pharmacy of the World' label needs to be backed by modern facilities and better regulation. But I'm cautiously optimistic - if American development finance comes in, it could mean more jobs and technology transfer for Indian companies. Let's hope this isn't just political posturing. 😄
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