China’s iron grip on supply of critical drug ingredients has been years in the making, driven by Beijing’s strategic plan to dominate the pharma industry AND the US!
by Emel Akan, The EpochTimes.com, April 23, 2025
WASHINGTON—As the COVID-19 pandemic swept across the globe in 2020, hospitals across the United States found themselves scrambling for masks, gloves, and other critical medical supplies.
The crisis served as a wake-up call for the United States, despite being a global leader in the pharmaceutical industry. Politicians and health care leaders vowed to fix the dangerous overreliance on foreign-made medical supplies, a problem that had gone largely unnoticed.
Fast forward a few years and not much has changed, Michael Einhorn, founder of Dealmed, a medical supply distributor based in New York, told The Epoch Times.In March 2020, Einhorn witnessed what he called the “logistical nightmare” firsthand when shipments from China ground to a halt.
The U.S. generic drug supply chain still heavily relies on global production, with a significant portion of ingredients and raw materials sourced from China, according to Einhorn.
On April 1, the Trump administration launched what’s known as a Section 232 investigation to determine the national security implications of imports of pharmaceuticals and their ingredients.A separate probe into semiconductors was launched at the same time.
“The section 232 investigations have been a long time coming,” Einhorn said.
The Chinese regime’s iron grip on America’s supply of critical medicines has been years in the making, driven by Beijing’s strategic push to dominate key industries, systemic issues within the U.S. health care system, and a lack of decisive action in Washington to break this dependence, according to industry experts.
They argue that the pharmaceutical industry is different from the automotive sector, where the U.S. government knows it cannot afford to impose tariffs without a strategic plan—doing so would lead to severe supply shortages and price hikes.
National Security Threat
After years of offshoring production to China and other countries, the United States lost the ability to produce many life-saving drugs, creating a national security threat, according to experts.
It’s a man-made problem, but a fix is possible, according to Rosemary Gibson, co-author of “China RX: Exposing the Risks of America’s Dependence on China for Medicine.”
“We have a system that is perfectly designed for catastrophic failure and significant loss of human life, and that has to change,” she told Jan Jekielek, host of Epoch TV’s “American Thought Leaders.”“We can’t make antibiotics anymore in this country, from beginning to end. We can’t make penicillin. We can’t make those antibiotics needed to treat sepsis, which can kill you. We can’t make the antibiotics to treat pneumonia, sexually transmitted diseases.”
“We have a system that is perfectly designed for catastrophic failure and significant loss of human life, and that has to change,” she told Jan Jekielek, host of Epoch TV’s “American Thought Leaders.”“We can’t make antibiotics anymore in this country, from beginning to end. We can’t make penicillin. We can’t make those antibiotics needed to treat sepsis, which can kill you. We can’t make the antibiotics to treat pneumonia, sexually transmitted diseases.”
China’s Secret Weapon: Ingredients
China is a dominant supplier of pharmaceutical ingredients globally. Gibson estimates that the United States relies on China for 95 percent of the key ingredients needed for generic drugs.
Even if the United States were to reduce its reliance on drugs sourced directly from China, it would still need to purchase pharmaceuticals from countries that rely on China for critical components, such as active pharmaceutical ingredients (APIs) and key starting materials (KSMs).
The pharmaceutical supply chain often involves a tiered production process where core ingredients, KSMs, are produced in China and then transferred to countries such as India for the production of APIs. China is also the dominant producer of APIs. Some good quality drugs and APIs are also produced in Ireland. Then the finished product is sold back into the United States.
“Without the KSMs, you can’t make APIs. Without APIs, you can’t make finished drugs. So China sits at the foundation of the global drug supply chain,” Einhorn said.
Trump believes that pharma tariffs will boost domestic manufacturing and reduce reliance on other countries.
“We don’t make our own drugs anymore,” Trump told reporters on April 15. “The drug companies are in Ireland, and they’re in lots of other places—China. And all I have to do is impose a tariff—the more, the faster they move in.”What’s Next?
As part of the ongoing investigation, the government is collecting information from a variety of stakeholders, including industry leaders, trade organizations, academics, and other thought leaders.
On April 13, Commerce Secretary Howard Lutnick told ABC News that tariffs on the pharma and semiconductor industries will be decided “in the next month or two.”
He noted that sectoral tariffs on pharmaceuticals and semiconductors are “not available for negotiation” with other countries.
“They are just going to be part of making sure we reshore the core national security items that need to be made in this country,” Lutnick said.
Suarez believes that tariffs will not be enough for the country’s strategic plan.
“You would actually have some type of an incentive policy to actually bolster domestic manufacturers,” he said, noting that incentives could include tax breaks for companies that are scaling up, modernizing their facilities, or buying equipment.
“The problem is 90 to 92 percent of most of the prescriptions that Americans take are from the generic side. So that’s the side that I think the government has the biggest role to play, because that side doesn’t have the same investments from the venture capital and private equity that you see on the big branded side.”
Suarez also advocates for a strategic reserve for pharmaceuticals similar to the Strategic Petroleum Reserve that the United States has maintained since the 1970s.
He said KSM and API stockpiles in the United States could be maintained for many years, providing strategic flexibility and agility.
The oil reserve, the world’s largest emergency supply, was created in the aftermath of the 1973–1974 Arab oil embargo, which led to oil supply disruptions and a worldwide energy crisis.
“Any responsible organization, whether it’s a nation or a business, always has some kind of a contingency plan,” Suarez said. “Why wouldn’t we have one for the pharmaceutical industry?”
