Drug Proposal Could Be Major Job Creator In India, China
Drug companies in India and China are drooling over the prospect that many American jobs in the pharmaceutical industry could soon be outsourced overseas.
The reason? A recent announcement from the U.S. Food and Drug Administration (FDA) that it is exploring so-called “importation” proposals, which would open the foreign drug market to Americans at rates set arbitrarily by other governments.
“The doors appear to be opening,” reports an industry newspaper the Pharma Letter, calling the development a “major positive for the India pharma industry.”
The move could be one of the most important job catalysts for the Indian and Chinese economies, but experts say American consumers may end up facing increased risks when buying medicines, while U.S. firms would suffer under foreign price controls brought to domestic markets.
The announcement from FDA comes as India, like China, is engaged in a standoff with President Trump on trade, with India moving aggressively to shut U.S. firms from its markets while levying retaliatory tariffs on key American industries.
In June, India announced tariffs on 29 U.S. products, including almonds, apples, walnuts and certain Stainless Steel products.
China, for its part, is notorious for its rampant theft of intellectual property and other unfair trade practices.
Notably, the Pharma Letter story on how “compelling” the FDA’s new announcement is to India’s pharma sector details some of the ways that China’s trade practices have deeply harmed the Indian economy, which is itself struggling to address Chinese trade issues.
For example, Chinese suppliers of key drug components, having achieved a monopoly on those components, raised prices as much as 200% over two years.
“The deluge of Chinese imports in the Indian market is wiping out many domestic industries and is a cause for serious concern,” India’s Parliamentary Standing Committee on Commerce recently wrote in a report.
The United States is also in the midst of an intense trade standoff with China in an attempt by President Trump to combat some of the many ways China tilts the marketplace in favor of its firms, including rampant intellectual property theft.
Advocates of importation are eager for the lower prices set by foreign governments with price controls. But conservative critics have long argued that opening the floodgates to foreign drugs would import those price controls, and the associated problems of shortages and stifled innovation, along with them.
In recent years, medical and law enforcement experts have also begun warning that importation would cause a huge increase in counterfeit medicines and illegal drug smuggling.
The relatively closed system of domestic manufacturers and rates has enabled one of the world’s best drug safety pipelines, but opening domestic markets to foreign drugs would quickly overwhelm the enforcement system, experts, including a group of former FDA commissioners, has said.
Meanwhile, key law enforcement officials say a huge increase in international pharmaceutical drug commerce would provide a haven for smugglers, in the midst of an opioid epidemic.
A proposal that greatly enhances the economies of two trade rivals while bringing new risks to consumers and harming U.S. firms is oddly incongruent with President Trump’s “America first” vantage point.
However, the issue is not yet settled. FDA announced they are considering importation proposals, and the “workgroup” could still pull back from policies that would drive job growth in New Delhi and Beijing, while leaving American consumers and workers empty-handed.
Mark Anthony is a former Silicon Valley Executive with Forrester Research, Inc. (Nasdaq: FORR). Mark is now the host of the nationally syndicated radio called The Patriot and The Preacher Show. Find out more at patriotandpreachershow.com.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.