In a congressional hearing before the U.S.—CHINA Economic and Security Review Commission, four specialists gave their view on China’s expanding role in the global health care market and the negative implications this holds for the United States.
One of the panelists, award-winning investigative journalist Ben Westhoff, spoke on the dangers of China’s lucrative fentanyl production.
Westhoff is the author of the upcoming book “Fentanyl, Inc.: How Rogue Chemists Are Creating The Deadliest Wave Of The Opioid Epidemic”, which brings to light China’s production of Novel Psychoactive Substances (NPS) drugs, most notably fentanyl.
According to Westhoff, fentanyl was primarily used as a medical drug, but now finds its greatest use through illicit use. Fentanyl used as a drug is mostly made in China, then directly sent to U.S consumers through the mail or funneled across the southern border by Mexican drug cartels. (RELATED: CBP Seizes Hundreds Of Pounds Of Drugs In Single Weekend)
“China has not been acting in good faith. Most companies produce legitimate chemicals, some produce illegal, others are in-between. Reforms have been promised, but inspections remain sporadic,” Westhoff said during the hearing. “China’s clumsy understaffed bureaucracy, involving at least 8 different agencies, has a difficult time controlling these chemical industries. Thus, dodgy companies that keep their heads down can operate without problems.”
Westhoff admitted that many Chinese officials do not fully understand the laws governing these chemical companies. As a result, many companies manipulate the grey areas in the law to their advantage and operate under the radar to avoid governmental oversight. In addition to this, China’s Ministry of Science and Technology issues VAT (value added tax) rebates to subsidize companies exporting fentanyl to the United States.
“Quietly, money has gone to Chinese companies exporting deadly drugs that are killing tens of thousands of Americans annually,” Westhoff explains. “For example, China designates certain companies as ‘new and high technology enterprises’, which helps these companies, including those exporting dangerous drugs to the U.S, receive lucrative incentives.”
The most significant action taken by China to stem the flow of illicit systemic opioids occurred on April 1st when government officials announced a regulation on all variants and precursor chemicals used to make fentanyl and its analogues.
Despite this, Westhoff admitted that there is much more that the United States can do to prevent the export of fentanyl into the nation. Westhoff recommended that American officials pressure China to eliminate tax rebates, grants, precursors and incentives that incentivize companies to produce and export deadly opioids.
In addition to Westhoff’s testimony, Rosemary Gibson, author of “China Rx: Exposing the Risks of America’s Dependence on China for Medicine”, warned of China’s alarming control over the global pharmaceutical market. Gibson revealed that China is responsible for producing 80% of America’s generic drug supply, which are 90% of the medicines that Americans typically use. By comparison, America’s industrial base used to manufacture drugs is collapsing and will completely collapse in 5 years, while other developed countries like India and the Netherlands depend almost exclusively on China for medicines.
Gibson likened China’s dominance in the global pharmaceutical industry to its predatory trade practices, as evident when a number of Chinese companies dumped penicillin into the global markets at a lowered price. After driving out all of the American, European and Indian producers, the Chinese companies raised prices for penicillin once again, establishing monopoly control.
“When you control the supply of medicines, you control the world. We are losing control over the supply of our medicines, and when we lose control over supply, we lose control over price,” Gibson said in the hearing. “China will be the price setter and we will be the price taker. The national security risks are pronounced. China could withhold supply. It could put lethal contaminants in medicine or not provide medicine at all.”
The most alarming fact that Gibson discovered in her 3 years of research was that it is no one’s job in the federal government to supervise what is in America’s drugs.
To counteract China’s growing control over pharmaceuticals, Gibson suggested a government review to detect America’s vulnerabilities and discover how to rebuild its industrial base. Gibson also suggested that officials in the DOD and the VA stop purchasing the cheapest pharmaceuticals from China, and instead purchase the best value medicines.