China Rx: The U.S. Medicine Chest

1. China Rx: The U.S. Medicine Chest Rosemary Gibson, Senior Advisor, The Hastings Center, Author, China Rx: Exposing the Risks of America’s Dependence on China for Medicines Joint Commission of Pharmacy Practitioners Alexandria, VA May 8, 2019

2. First, Thank You

4. 1. A safety moment 2. Continuous learning: who knew medicine-making would became so complex 3. Moving to solutions: buy differently, test differently 4. Questions to consider for the panel discussion Agenda

5. 1. A Safety Moment

9. 2. Continuous Learning: Who Knew Medicine-Making Would Become So Complex

10. A. Impact of trade policy on our medicines Who knew medicine-making would become so complex?

11. Within 4 years of opening free trade with China: • The last US penicillin fermentation plant closed • Vitamin C cartel in China formed and drove up U.S. prices 600% • The last US aspirin manufacturer closed when cheap imports from China flooded the market • Heparin imports from China began

12. The Penicillin Cartel

15. Penicillin story is the steel story – with a difference • Build huge infrastructure capacity, sell product at below market prices, drive out US and other manufacturers • The difference? No one is advocating for returning of penicillin (or other drug manufacturing) to U.S. • What is future of U.S. and western generic drug making? = More centralization of global supply in a single country? The Steel is the penicillin story, almost

16. The Vitamin C Cartel

17. Vitamin C (ascorbic acid) manufacturers went out of business in the U.S. after a handful of Chinese companies formed a cartel, reduced exports, and increased prices up to 600%. Loss of Vitamin C Manufacturing

19. Aspirin Manufacturing (acetylsalicylic acid)

20. In 2002, the last aspirin (acetylsalicylic acid) manufacturing plant in the U.S. closed after firms flooded the U.S. market with product at below market prices. Example of Loss of Aspirin Manufacturing

24. “If China stopped exporting ingredients to the US, within three months all the pharmacies would be empty.” Guy Villax, CEO Hovione,

25. A. Impact of trade policy on our medicines • B. National security implications of increased centralization of global supply chain • C. The regulator’s dilemma • D. Global trends and the impact on U.S. regulatory oversight: is it losing leverage to assure quality medicines? Who knew medicine-making would become so complex?

26. Dutch Public Television documentary February 2019 on the Netherlands’ dependence on China for medicine Highlights the national security implications: “Now we’re afraid that China will do things to deprive us of our medication.” Dutch Public Television documentary

27. 2014 FDA Science Board meeting: Discussion of the ubiquitous use of heparin and U.S. dependence on China as a national security concern that requires escalation to the highest levels of government. National security Concern

28. After the 2001 anthrax attacks, U.S. military bought 20 million doses of doxycycline The European company that supplied the military bought the starting material from a plant in China from a plant in China. National security Concerns

30. Impact of trade policy on our medicines • National security implications of increased centralization of global supply chain • The regulator’s dilemma • Global trends and the impact on U.S. regulatory oversight: is it losing leverage to assure quality medicines? Who knew medicine-making would become so complex?

32. “In some cases defective medicines had to be left on the market to prevent shortages of life saving medicines as there is no available alternative…” “In some cases of GMP non-compliance the ability of Regulators to take action against a manufacturing site was restricted in order to avoid product shortages.” EMA Reflection Paper 2012

35. A word about valsartan

37. FDA Laboratory analysis of valsartan products: Note the Variation Source: Laboratory analysis of valsartan products, October 10, 2018, https://www.fda.gov/Drugs/DrugSafety/ucm622717.htm

38. FDA Warning Letter Unusually stern language: “FDA has grave concerns about the potential presence of mutagenic impurities in all intermediates and APIs manufactured at your facility.” fda warning letter

39. Observation #1: The company made critical changes to the chemical process to make the API but didn’t conduct a formal risk assessment of the impact on the quality of the product fda Inspection observations

40. Observation #2: Out-of-specification impurities were identified and the company reprocessed the batch. No root cause analysis to identify the problem and take corrective action. fda Inspection observations

41. Observation #3: Finished APIs were released that were manufactured with unacceptable levels of genotoxic impurities. fda Inspection observations

42. Impact of trade policy on our medicines • National security implications of increased centralization of global supply chain • The regulator’s dilemma: is FDA losing leverage to assure quality medicines? • Geopolitics: U.S.- China Economic and Security Review Commission Who knew medicine-making would become so complex?

43. Testimony at the U.S-China Economic and Security Review Commission China’s aim is to disrupt, dominate, and displace U.S. pharmaceutical industry The big picture

45. China’s cyber-economic campaigns seek to gain control of strategic global industries and supply chains – including pharmaceuticals These campaigns consist of state-sponsored and supported criminal cartels focused on leveraging cyber-enabled espionage and sabotage to execute industry-wide fraud, market manipulation, and anti-trust schemes designed to accelerate China’s entry and domination of each key global industry. National Security Concerns

46. 3. Moving Forward on Solutions

47. If a patient is not responding to a drug treatment or having atypical symptoms, ask “What drugs is the patient taking?” Report concerns about possible drug product inadequacy to your organization’s adverse event or other appropriate reporting system Clinician Action Steps

48. New start-up company Valisure, a pharmacy that tests every product before it sells it Each product has a certificate of analysis specifying chemical properties analyzed at its lab in Yale Science Park. More than 10% of medicines tested failed to meet standards Testing Drugs

50. Civica Rx: New non-profit generic drug company founded by 7 health systems and 3 foundations to manufacture 30 drugs (to start) in perpetual shortage, e.g. sterile injectables Mayo Clinic + 800 other hospitals Large Purchasers Buy Differently