China’s Grip on U.S. Drug Supply A Looming Disaster

China controls 95% of the key ingredients for America's generic drugs. If exports stop, our hospitals could collapse within months. From penicellin to painkillers, the US is dangerously dependent. Expert Rosemary Gibson warns this isn't just a supply issue. It's a national security crisis. Could China's grip on our medicine supply become a weapon? Stay tuned as we uncover a looming disaster. China has an alarming level of control over the American medicine supply. And according to American health policy expert Rosemary Gibson, it's a disaster waiting to happen. The United States depends on China for 95% of the key components that are necessary to make our generic drugs. And if China shut the door on exports, within months, our health care system would begin to collapse. Gibson, the author of China RX, explained just how far this dependency goes. >> That's how dependent we are. And it's not just us. The world is dependent. Europe is dependent because China has a chokeold on those upstream raw materials and chemicals needed to make these active ingredients which makes a medicine medicine and that turns into the pills and vials. That >> Why is this such a big problem? Because most of what gets prescribed in hospitals is generic and that makes us dangerously exposed. >> And whatever hospital you're in, whether it's all the bigname hospitals, what they use are generic drugs and they're about 90 91% of what's administered and prescribed. Then she dropped a bombshell about what happened during co >> that in the event of a natural disaster, global pandemic or a geopolitical event, the United States will be waiting in line behind other countries to get vital medicines to save people's lives. We have lost our industrial base and during the pandemic that we had rationing of vital medicines in this country. It wasn't called rationing. That would scare the public. The media didn't call it rationing. The euphemism used in the industry is well Dr. So and so well we won't be able to deliver those drugs to you today. They're quote on allocation which means they're actually allocating whatever they have in certain priority areas. So we were rationing drugs in the United States >> and it gets worse. This could be used as a weapon. 80 to 98% of these components of medicines are from China and have at the moment have to be gotten there. It just strikes me as a very powerful potential vector of attack right in a situation where you know if you put something bad into a small piece of the supply it would take a very long time for anyone to even figure out that an attack had happened. She pointed to the rise in illegal prescription drugs laced with fentinyl so sophisticated that many fakes are indistinguishable from the real thing. >> And I what I'm concerned about is that we're going to see a convergence of the illegal market >> and the legal supply chain and production of medicines coming from China. >> She painted a grim future scenario. What's to stop enterprising minds in a very negative way that want to take down America to put some um debilitating chemicals into 2% or 5% of the most widely prescribed generic drugs in the United States. This isn't just a commercial issue >> and I I will call it for the first time and I believe that we will be seeing nefarious activity in our legal medicine supply chain that will be very difficult to detect and you could take down America without firing a shot. You don't need any expensive missiles. you could debilitate the population and leave the infrastructure intact. >> Then she said the words that should haunt every policy maker in America. This is a perfect crime. You can harm people, even kill them, but how do you detect it? Nearly 20 years ago, after the signing of the US China Fair Trade Agreement, many multinational pharmaceutical companies, many of which were headquartered in the US, began sourcing raw materials for critical drugs in China. Backed by massive government subsidies, Chinese state-owned enterprises drove prices so low that they could outco compete existing manufacturers in the US and other regions, prompting these manufacturers to shut down factories and shift operations to China. Johnson and Johnson, headquartered in New Brunswick, New Jersey, announced layoffs of 4,800 employees in 2007, followed by another 8,000 layoffs in the US. And abroad two years later, as the company prepared to open a new RMD center in Shanghai in 2009, the company's CEO, Alex Gorski, told the Wall Street Journal in 2015, "We see this as a shift from bringing highquality products to China to truly discovering and developing products in China." In 2011, Fizer laid off more than 2,000 researchers, over half of whom were at the company's research lab in Groten, Connecticut. The primary victim of these layoffs was the company's antibiotic research program in Grotin, which was reportedly relocated to Shanghai, marking the first large-scale migration of a major US pharmaceutical research division to China. Shifting production to China brought millions of dollars in profits to these companies and their shareholders, but failed to benefit ordinary American consumers who still pay higher drug prices than anywhere else in the world. In other words, pharmaceutical companies don't care about America. They only care about profits. The race to the bottom for the cheapest drug ingredients created a perfect opportunity for China to seize control. In the mid200s, China flooded the global market with penicellin raw materials. Dumping refers to selling at extremely low prices with the intent to drive out producers in the US, Europe, and even India. Eventually, China became the world's leading supplier of penicellin raw materials and then they raised prices. This is an industrial strategy by a foreign government to maintain dominance in this field and when it sees fit, leverage that advantage to exert influence over any country to get what it wants. In fact, four years earlier, former FDA commissioner Scott Gotautle warned a Senate committee that the spread of the Corona virus could disrupt American drug supply chains, potentially causing global shortages. He highlighted the US as heavy reliance on China which supplies 95% of ibuprofen imports, 91% of hydrocortisone, 70% of acetaminophen and 40 45% of penicellin. Overall, China produces 80% of the US as antibiotic supply. A 2019 report by the US China Economic and Security Review Commission noted that China is the world's largest producer of active pharmaceutical ingredients APIs with the US heavily dependent on Chinese sourced drugs or APIs. This dependence stems from decades of US pharmaceutical companies outsourcing production to China, prioritizing profits over national security and American jobs. Administrations from both parties have allowed this, leaving the US vulnerable, especially during crises like the Corona virus, which also caused a shortage of sanitary masks, half of which are produced in China, further straining US supplies. Imagine all of our medicines, including military drugs, being entirely dependent on China, which could become our adversary. This is simply insane, said Daniel Slain, a former member of the US China Economic and Security Review Commission. The commission was established by the US Congress 20 years ago to report on the national security implications of US. China relations, the safety of the US drug supply is another alarming concern as the US Food and Drug Administration FDA lacks the funding and personnel to inspect Chinese factories which may receive advanced warnings before inspectors arrive. The most shocking example is the 2008 contamination of Heperin, a blood thinner distributed by Baxter Laboratories, which resulted in 81 deaths and nearly 800 illnesses. The FDA determined that the source of the contaminated drug was Chongjo SPL, a Chinese subsidiary of Scientific Protein Laboratories, SPL. Slain called the US reliance on Chinese drugs a national security issue, pointing to China's recent militarization as a cause for concern. They are rapidly catching up to us in fighter jets, submarines, and missiles. Slain said they have satellites that can destroy our GPS systems. They have occupied islands in the East and South China Seas that belong to Vietnam, the Philippines, and Japan. They are militarizing those islands with missiles. Their goal is to push us out of the East Pacific. You don't need to be a military expert to see where this is headed, he said. Given all this, we're now relying on China for medicines. Did the Trump administration recognize this crisis? Of course. As early as 2020, President Trump's trade adviser, Peter Navaro, pointed out that China dominated the global supply chain for critical drugs like antibiotics, ibuprofen, and vitamin C. Warning that the US could face severe consequences if China restricted exports. He criticized past administrations for ignoring this risk, leaving the US vulnerable in a crisis. In August 2020, President Trump signed Executive Order 13944 requiring federal agencies to prioritize the purchase of US made drugs and medical supplies aiming to incentivize domestic production through a buy American policy. The order also called for streamlining regulatory approval processes for US made products and increasing transparency in product origin labeling. Navaro stated that the goal of the executive order was to bring the supply chain back to America, including not only finished drugs, but also APIs and precursor chemicals to ensure public health and national security. Trump publicly emphasized that the US must produce critical drugs and equipment domestically rather than rely on places like China or Ireland. Trump's first administration also commissioned the nationalmies of sciences, engineering and medicine to study the US medical supply chain assessing the sources and availability of critical drugs. This study aimed to provide data to support policym additionally the administration pushed the FDA to strengthen inspections of foreign manufacturing facilities though actual inspections were limited due to pandemic restrictions. In 2019, the FDA inspected only about 1% of registered facilities in China. While Trump was known for his tough trade policies, he was cautious about imposing heavy tariffs directly on drugs in the pharmaceutical sector. In May 2019, a tariff list covering about $300 billion in Chinese goods explicitly exempted pharmaceuticals, certain drug ingredients, and some medical products to prevent exacerbating shortages or driving up prices. Fast forward to today in 2025. Trump's new administration has taken several high-profile measures to address pharmaceutical supply chain security and reduce dependence on China, especially after the CO 19 pandemic exposed vulnerabilities in the supply chain. These measures build on the focus on domestic production from his first term, but introduce new strategies as well. On April 2nd, Trump announced a comprehensive tariff plan that initially exempted drugs, but on April 9th, he reiterated that drug tariffs were coming, though specific details have yet to be released. The Trump administration may use section 232 of the Trade Expansion Act of 1962 to advance drug tariffs, arguing that import dependency threatens national security. In April 2025, the Department of Commerce launched a section 232 investigation into drug and semiconductor imports, providing a legal basis for potential tariffs. Another possible avenue is the International Emergency Economic Powers Act, IEPA, of 1977, which allows the president to regulate imports under a national emergency. The Trump administration continues to emphasize an America first trade policy aiming to reduce reliance on foreign APIs and finished drugs, particularly from China and India, the latter of which relies on China for about 70% of its APIs. He declared, "We will make cars, chips, and drugs in America." Major pharmaceutical companies have responded positively. Eli Liy has invested $23 billion in new factories across multiple locations. Merc has invested $1 billion in North Carolina and Johnson and Johnson has invested $2 billion in New Jersey for biologics. While these projects are driven by policy, they are long-term initiatives and cannot address import gaps in the short term. Meanwhile, Congress is advancing the Biosecure Act, which aims to restrict multinational pharmaceutical companies from outsourcing production to China, preventing technology transfer and deepening dependency. If passed, the bill could force companies to adjust their global supply chains, but may also provoke retaliatory restrictions from China. In 2025, the Trump administration is addressing US reliance on foreign pharmaceutical supply chains, particularly China, through proposed drug tariffs, section 232 investigations, domestic production incentives, and PBM reforms. These measures aim to enhance health security and national self-sufficiency but come with risks of shortages, price increases and RAMP deconstraints. Compared to his first term, the new administration is more aggressive in including drugs in the trade war, but the actual impact depends on implementation details and global reactions. In the short term, stockpiling and partial exemptions may prevent catastrophic consequences, but long-term health security requires a more comprehensive strategy, including international cooperation and sustained investment. Do you think Trump's measures will succeed? We welcome your comments and unique insights. Thanks for you watching. We'll see you next