New CFR Report Outlines How the U.S. Can Reduce Its Pharmaceutical Dependence on China

The U.S. pharmaceutical supply chain faces a threat equal to the rare-earths challenge already posed by China’s exploitation of its dominance of those critical minerals.

“China has both the tools and demonstrated willingness to weaponize U.S. pharmaceutical dependence: the structural conditions enabling it run through nearly every tier of the pharmaceutical supply,” warns a new report from the Council on Foreign Relations (CFR), “The Pharma Choke Point: How to Reduce U.S. Dependence on Chinese Pharmaceutical and Biotechnology Supply Chains.” “The question is not whether to act, but if the United States will manage to do so before a crisis makes the cost of decades of inaction unavoidable.”

This report is the product of a year-long joint study group between CFR’s Global Health program and the China Policy Accelerator, which is part of CFR’s China Strategy Initiative. It is coauthored by Thomas J. Bollyky, the Bloomberg chair in global health and director of CFR’s Global Health program; Rush Doshi, C.V. Starr senior fellow for Asia studies and director of CFR’s China Strategy Initiative; Olivia Kosloff, senior fellow at the American Economic Liberties Project; Prashant Yadav, senior fellow for global health at CFR; and Elena Every, research associate for the Global Health program at CFR.

The report undertakes an original analysis of U.S. trade data and United States Pharmacopeia ingredient sourcing records, mapping U.S. pharmaceutical supply chain dependencies tier by tier. According to the authors, the report is the first major policy effort to assess the risks of China weaponizing pharmaceutical supply chains as it has critical minerals: not in “a military conflict, public health emergency, or natural disaster,” but rather by withholding “essential pharmaceutical inputs as a tool of economic or political coercion.” 

Their report outlines a replicable solution framework for policymakers and researchers that can be applied to each of the three major choke points in the U.S. pharmaceutical supply chain. That includes the reliance on China for raw materials and upstream supplies, the erosion of biopharmaceutical manufacturing and clinical trial capacity from the United States to China, and the emerging U.S. dependence on China for research and development of sensitive biotechnology.

“For its economic and national security, the United States must respond with a package of coordinated measures built around these three archetypes of supply chain dependence,” write the authors. The industrial policy tools they propose all carry risks, meaning “disciplined, targeted implementation—calibrated to the specific archetype and its root cause—will be needed to mitigate these unintended consequences.”

The authors state that “the true scope of U.S. vulnerability is systematically underestimated and often poorly understood.” As a result, the United States needs to address that vulnerability with the same level of urgency and devotion of resources that it has committed to reducing dependence on China for rare earths. 

“The question now is whether the United States will manage to do so before a crisis makes the cost of decades of inaction all too visible to the American public and exceedingly painful for everyone touched by the health care system to bear,” they conclude. 

To read “The Pharma Choke Point: How to Reduce U.S. Dependence on Chinese Pharmaceutical and Biotechnology Supply Chains,” visit cfr.org/reports/the-pharma-choke-point.

To interview the authors, please email [email protected].