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Washington, D.C. — U.S. Senators Marco Rubio (R-FL) and Elizabeth Warren (D-MA) reintroduced a bipartisan bill to direct the Federal Trade Commission (FTC) and the Secretary of the Treasury — acting through the Committee on Foreign Investment in the United States (CFIUS) — to conduct a study on the United States’ overreliance on foreign countries and the impact of foreign direct investment on the U.S. pharmaceutical industry and DNA analysis industries. 

The U.S. currently relies heavily on foreign nations for its supply of drugs and pharmaceutical products. Today, nearly 80 percent of the active pharmaceutical ingredients (APIs), the requisite component used in generic drugs, are imported from abroad. This overreliance leaves our supply chain of critical drugs used by millions of Americans vulnerable to disruption. 

Last year, Rubio secured bipartisan language in the fiscal year 2021 National Defense Authorization Act (NDAA) to combat America’s supply chain risk and dependence on China for pharmaceuticals that builds off the plan he released in February 2020. In 2019, Rubio issued a report detailing critical vulnerabilities in America’s medical supply chain, warning, “the U.S. runs the risk of losing important components of its medical supply chain to China’s government-backed industry.” Rubio warned in Modern Healthcare that when it comes to the threat China poses to America’s healthcare industry, we cannot afford to be complacent.  

Additionally, Rubio recently reintroduced the Medical Manufacturing, Economic Development, and Sustainability (MMEDS) Act, a bill that would encourage companies currently producing medical devices and pharmaceuticals abroad to relocate to the U.S. Last year, Rubio introduced bipartisan legislation to combat America’s supply chain risk and dependence on China for pharmaceuticals that builds off the plan he released in February 2020. In 2019, Rubio issued a report detailing critical vulnerabilities in America’s medical supply chain, warning, “the U.S. runs the risk of losing important components of its medical supply chain to China’s government-backed industry.” Rubio warned in Modern Healthcare that when it comes to the threat China poses to America’s healthcare industry, we cannot afford to be complacent.  

“COVID-19 has made it painfully clear that we must pass meaningful legislation in order to help rebuild our nation’s medical manufacturing and pharmaceutical sector,” Rubio said. “I’m proud to reintroduce this bipartisan bill, which would ensure we have the necessary information to address our supply chain vulnerabilities and reduce our overreliance on China for pharmaceuticals.”

“To defeat the current COVID-19 crisis and better equip the United States against future pandemics, we must take control of our supply chain and rely less on foreign countries for our critical drugs,” Warren said. “Our bill will require a study to show the effects of this overreliance and identify the tools we need to confront it head-on.” 

This overreliance stems, in part, from foreign investment in the U.S. pharmaceutical supply chain. While not all foreign investment is problematic, experts have warned that significant foreign control of U.S. based pharmaceutical companies could stymie domestic capacity and exacerbate the nation’s overreliance on foreign nations for its APIs, raw ingredients, and finished drugs. Despite the risks posed to the United States, the nation lacks detailed information on the nature of this investment. 

The U.S. Pharmaceutical Supply Chain Review Act would require the FTC and Treasury, through CFIUS, to provide Congress with a report on the following within one year of passage: 

• How overreliance on foreign countries for pharmaceutical products impacts the United States’ supply chain and domestic manufacturing capacity;

• How foreign direct investment from abroad affects the nation’s ability to produce drugs, as well as their key components;

• How foreign direct investment in U.S. genome sequencing technologies affects domestic capacity to sequence or store DNA; and

• The number of foreign investment transactions in the pharmaceutical industry and the sequencing or storage of DNA in the United States that CFIUS has reviewed in the past ten years. 

Related:

• June 30, 2020: Rubio, Warren introduce legislation to study the effects of America’s overreliance on foreign countries and foreign direct investment in its pharmaceutical supply chain.