As discussed in a post earlier today, most drugs consumed by Americans are made in other countries, particularly China and India.
In China’s case, that didn’t happen by fiat. China’s rise to become America’s pre-eminent supplier of prescription and OTC drugs has resulted from explicit government policies, according to Guy Villax, chief executive of Hovione, a drug maker.
Villax shared a document with the New York Times revealing that Shanghai’s provincial government pays local drug producers $15,000 for each drug approval obtained from our FDA and $5,000 for those secured from European Union regulators.
The Chinese government strategy was hatched in the 1980s when it acquired enormous quantities of penicillin fermenters and helped finance production of the stuff on the cheap.
The move “(disrupted) prices around the globe and (forced) most Western producers from the market,” according to Enrico Polastro, an expert in antibiotics who spoke with the Times.
Penicillin is a building block for 2 classes of antibiotics. During World War II, the US military commercialized penicillin production and from that time until the 1980s, most US pharmaceutical companies made the stuff in the US.
The chairman of Cipla, the large pharmaceutical ingredient supplier says his company has become quite dependent on Chinese suppliers.
“If tomorrow China stopped supplying pharmaceutical ingredients, the worldwide pharmaceutical industry would collapse,” Yusuf Hamied told the Times.
Last year’s Heparin scare underscored the problem. In that case, Federal regulators deduced that the blood thinner was the cause of an epidemic of anaphylactoid reactions in dialysis centers.
The regulators determined that US Heparin supplies came from only 2 companies, Baxter International and APP Pharma. Soon thereafter, they deduced that Baxter was distributing a brew that had been contaminated by Chinese suppliers. The Feds promptly took Baxter Heparin off the market.
Problem was, APP got its Heparin from China too.