One such area that cannot be overlooked in this discussion is the development and production of critical pharmaceutical products.

Beyond their lifesaving capabilities, pharmaceuticals constitute a $1.2 trillion market globally, a market the Chinese government is intent on dominating. China has launched a concerted effort to establish itself as the preeminent developer, manufacturer, and distributor of drugs worldwide, codified in Chinese President Xi Jinping’s 14th Five Year Plan and operationalized in his Made in China 2025 initiative.

The plan appears to be working. While the United States imported $2.1 billion in Chinese-sourced pharmaceuticals in 2020, drug imports from China ballooned to $10.3 billion two years later. In its effort to corner the worldwide pharmaceutical market, China appears to be establishing a chokehold on drug availability while engaging in trade practices that compromise the privacy, security, and safety of American citizens.

The concentrated Chinese manufacturing of drugs threatens not only our access to vital healthcare but to the U.S. supply chain as well. Drugs often represent the end products of a complex production chain. For small-molecule drugs, raw materials are processed into a series of intermediates, which are ultimately refined into active pharmaceutical ingredients. 

China has sought to control the supply of APIs and critical precursors in the manufacturing process. Our dependence on Chinese drug manufacturers is especially concentrated in the generics market, which makeup 90% of all filled prescriptions in the United States. Many other drugs routinely used by Americans, such as 97% of all antibiotics, 95% of ibuprofen, and 70% of acetaminophen, are also sourced directly or indirectly from Chinese suppliers.

The concern over China’s pharmaceutical domination thus includes the safety and wellness of American patients who take drugs sourced from China. For example, as recently as February, Food and Drug Administration inspectors issued a damning indictment of Chinese company Sichuan Deebio’s main production facility, which not only lacked basic quality control measures but featured a leadership team that systematically misled investigators over the course of their review.

In addition to cutting corners and sacrificing quality for quantity, Chinese biotechnology firms have engaged in the theft of American citizens’ bulk personal data. This includes sensitive clinical histories and nuanced genomic data currently used by American research institutions. 

While American researchers and drug developers have obtained patient consent for the use of this sensitive data, Chinese firms circumvent fundamental privacy protections. This information drives drug discoveries, enables precision medicine breakthroughs, and trains artificial intelligence algorithms. But in the hands of the Chinese, these data facilitate Chinese governmental surveillance operations at home and abroad. American population data are considered particularly valuable given its vast diversity and sophisticated testing assays, and it presents a treasure trove for Chinese actors seeking to leapfrog American innovation.

Chinese firms scoop up personal information through a combination of overt and covert means. For example, BGI, a major Chinese biotech operating a large-scale genomic biobank, is a close partner with the People’s Liberation Army and collects genomic data around the world. BGI was eventually subjected to Department of Defense sanctions, but not before it had partnered with American institutions in a likely attempt to collect commercial data streams for Chinese government use. Making matters worse, Chinese national security law frequently compels businesses to share data with the government, creating a pre-existing backdoor to security and privacy nightmares.

Clearly, a significant realignment is in order. Reducing supply chain dependence on our country’s greatest geopolitical adversary is imperative to national security. Policymakers can begin by promoting nearshoring and so-called friendshoring through regulatory and payment policy incentives. State and federal tax policy, along with local decisions such as zoning, should be examined to find ways to encourage domestic production, starting with later steps in the manufacturing supply chain such as fill-finish for biologics. 

For products frequently in shortage that are also heavily reliant on China, the FDA, in partnership with Congress, can expedite the inspection and licensing of new production facilities, making it easier to get domestic production online. 

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Separately, trade policy must include stringent protections for American intellectual property and be coupled with an empowered Committee on Foreign Investment in the United States to review transactions where Chinese firms seek to partner with or acquire American biotechs.

Encouraging domestic development of an industrial base, in addition to diversifying the supply chain to include friendly foreign partners, is more than a partisan issue. At risk is the health of every American citizen and their right to privacy. The stakes could hardly be higher.

Vrushab Gowda is a clinical fellow at Harvard Medical School and a radiology resident at Massachusetts General Hospital. Brian J. Miller is a nonresident fellow at the American Enterprise Institute and an assistant professor of medicine at the Johns Hopkins University School of Medicine.