America’s Drug Supply Chain

Committee
U.S. Senate Special Committee on Aging

Hearing Title
“Behind the Label: Foreign Ownership and Control in America’s Drug Supply Chain

Date
July 15, 2026

In his testimony to the Senate Committee on Aging, Dr. Doshi explained how the United States had developed a “rare earths” problem in medicine, largely self-inflicted by letting its pharmaceutical supply chain and innovation ecosystem migrate offshore, that will soon reappear in biotechnology. China is now the sole source of a key starting material for nearly seven hundred active ingredients used in the U.S. – and a growing number of finished medicines are imported directly from China with no substitute. This dependency emerged because U.S. pharma companies prioritized lower-cost manufacturers over quality and resilience. Meanwhile China extended subsidies, tolerated pollution, and cratered prices to prop up its domestic industry and lock in a global monopoly.

Dr. Doshi then warned that the United States was losing its edge in biotechnological innovation and that, in significant measure, the United States was financing that displacement itself. U.S. pharma companies are increasingly licensing Chinese-developed therapies rather than investing in U.S.-developed ones, which now make up a third of the U.S. drug pipeline. Though China has become genuinely innovate and is now the world’s second-largest developer of new therapeutics, much of this growth stems from a faster, more permissive regulatory regime. Chinese companies can establish human proof of concept cheaply and quickly without a formal FDA process, which is precisely what attracts U.S. licensing deals. The United States must balance in-licensing to ensure patients can access genuinely innovative therapies from China without disincentivizing U.S. biotech from innovating too.

At the same time, the United States is losing the ability to manufacture the medicines of the future. Roughly eighty percent of U.S. biopharmaceutical companies now work with Chinese contract biomanufacturers like WuXi Bio. This integrated contract-manufacturing model captures a molecule at discovery and carries it through production, creating high switching costs and lock-in. Meanwhile, China has reduced its own exposure by developing domestic substitutes for inputs it once bought from the U.S.

Dr. Doshi concluded with several recommendations for Congress to address supply chain vulnerabilities and four to reshore the United States‘ biotech innovation and manufacturing base: (1) mandate full spectrum country-of-origin disclosure by passing the CLEAR LABELS act; (2) realign tariffs to upstream inputs rather than the finished product and work with allies to address chokepoints; (3) include supply reliability alongside price as a consideration in federal procurement; (4) fully fund the Strategic API Reserve (API); (5) build domestic capacity by funding leap-frog innovation, research, and low-cost capital; (6) improve our own system by enacting clinical trial reforms; (7) increase regulatory scrutiny of outbound biotech investment and in-licensing while applying uniform FDA data standards regardless of where trials are conducted; (8) pair the BIOSECURE Act with China-risk planning requirements for federal funding recipients; and (9) monitor and protect access to supplier, sequence and biological data from entities aligned with a foreign intelligence service.