Tom Cotton Probes How China Could Use Pharmaceutical Dominance In Major Pacific Conflict

2 weeks ago

At Tuesday's Senate Armed Services Committee hearing, Sen. Tom Cotton (R-AR) spoke to witnesses about China's dominance of the pharmaceutical supply chain.

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Transcript

00:00Senator Cotton.

00:02General Friedrichs, I'd like to continue with the answer you just gave to Senator Shaheen

00:06about our dependence on other countries for drugs and precursors, specifically Communist

00:12China.

00:13The United States relies heavily on Communist China for basic drugs and so-called APIs,

00:18active pharmaceutical ingredients.

00:21Providers obviously need this, not just in the civilian world, but in the military world,

00:24especially to treat combat casualties.

00:28Communist China, for instance, has 80% of the global supply chain of antibiotics.

00:33How could Communist China use this dependence of ours to its advantage if there were a major

00:38conflict in the Pacific?

00:43Thank you very much, Senator Cotton.

00:44I think we've seen examples of this with rare minerals and other things that China largely

00:51controls the supply chain for, in that they will choose to titrate that supply chain based

00:57on their satisfaction or dissatisfaction with those trying to purchase those items.

01:02I had the great privilege in my last role of working with India, the EU, Japan, and

01:08Korea on a consortium in which we began to identify ways to leverage new technologies

01:15to change and to broaden our supply chains.

01:20I encourage this committee to direct the Department of Defense, in partnership with the Department

01:25of Health and Human Services, to continue exploring those options.

01:29What we found was, in many cases, as in the case of antibiotics that are based on penicillin,

01:37the Japanese have already made a tremendous investment in the ability to produce those

01:41APIs within Japan.

01:43We should be partnering with them and creating an environment in which at least the DOD and

01:49the VA purchase from Japan to help sustain that production base and ensure that we have

01:54the access that we need.

01:55There are many more examples.

01:56I touched on some of them in my written statement, but there are ways to mitigate this.

02:01Your answer, Senator Shaheen, said that Congress should push the Department of Defense to catalog

02:06all of these dependencies.

02:08It sounds like you're saying that we also need to push to eliminate or at least significantly

02:12curtail these dependencies as well.

02:14Is that right?

02:15Absolutely.

02:16You mentioned four different sourcing options, South Korea, Japan, the EU, and India.

02:22Those first three are advanced industrial democracies, just like ours.

02:28If they can produce these items, like acetaminophen or ibuprofen or penicillin, at a reasonable

02:33cost, surely the United States could do so as well, right?

02:37I believe that is the case.

02:39What we found is that, particularly in these countries, they've created an environment

02:44in which it was financially possible for companies to produce these items within their country.

02:50We have not done that here in the United States, but a thoughtful industrial policy

02:54that was focused on resilience and national security, as well as economic security and

02:59health security, could do that for us as well.

03:02It's fair to say that, between the two of them, the Department of Defense and the Department

03:06of Veterans Affairs sure does have a lot of purchasing power to create a domestic market

03:10for the production of these fairly basic and longstanding medicines, right?

03:18Absolutely.

03:19About 8% of the market, and it gets back to Senator Shaheen's point about continuing resolutions

03:24and predictability.

03:26If companies know that they have a predictable demand signal, they'll build to it.

03:30If they have an episodic or random demand signal, they'll let somebody else deal with

03:34that.

03:35General Robb, I've noticed you nodding your head vigorously, so please get off your chest

03:39everything you wanted to add to General Friedrich's answers.

03:44Yes, also, and I'm sure you're aware, and this has been in the direction from questions

03:51asked by our Congress, the Center for Health Services Research at the Uniformed Services

03:56University has been tasked with, along with Defense Logistics Agency, to catalog and specifically

04:03look at what, and define the problem, what is the Department of Defense's reliance on

04:10the medicines that we have talked about that are primarily sourced from China and from

04:15India, and then, which would then help, what I would call, inform the decisions away ahead

04:21of whether you, what I call it, ally shore, you know, or near shore or on shore, as Dr.

04:28Friedrich discussed in looking at a way forward.

04:31But they are creating that, you know, what's the data to drive the decision and the investment.

04:37Okay.

04:38Thank you, gentlemen, both for your answers.

04:39It's long been the case that the Department of Defense, acting at congressional direction,

04:42has mandated the domestic purchase of many uniform items, so I think, surely, we should

04:49make sure that our troops have the medicines they need to stay healthy or to recover as

04:55needed.

04:56Thank you, Sergeant Cotton.

Tom Cotton Probes How China Could Use Pharmaceutical Dominance In Major Pacific Conflict

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