Big pharma embroiled in China-US ‘drugs’ battle

China spooked democracies across the globe by weaponizing rare earths, the building blocks of today’s high-tech world. Now, it is planning to use its “chokehold over critical drug ingredients” to dominate the pharmaceutical industry. Powered by AI innovation.

Last year, multi-billion-dollar deals were signed with pharma giants Pfizer, AstraZeneca, GlaxoSmithKline, and Verdiva Bio & Sciwind. They involved “the rights to develop and commercialize China-origin drugs.”

But dig deeper and you will find that the world’s second-largest economy has a vice-like grip on the pharma supply chain, just like rare earths. “China holds near-monopoly control over certain critical pharmaceutical ingredients,” the Atlantic Council reported in November.

“One in four imported drug inputs comes from product categories where China controls at least three-quarters of [American] imports,” the Washington-based think tank pointed out.

Dominate and destroy:

• Beijing is using the same playbook that turned the country into a manufacturing and high-tech hub for green energy, electric vehicles, and high-end consumer products.
• “Once Chinese companies dominate the supply chain [and flood] global markets, Beijing brings in export controls to threaten rival economies,” The Wall Street Journal reported. 

Delve deeper: Shades of the oil crisis and the Iran war also loom large over the global economy. “The parallels are striking,” Vincent So, the CEO of the Thoracic Society of Australia and New Zealand, a health care professional body, said today.

Between the lines: “Just as countries sought to reduce dependence on a single source of oil, they are now seeking to reduce reliance on pharmaceutical supply chains,” he wrote in The Interpreter, which is published by the Lowy Institute, a Sydney-based think tank.

Big picture: Yet a starker warning came from John Moolenaar, the chairman of the House Select Committee on the Chinese Communist Party in Washington. “[China] is cornering the market on our medicines,” he said, as reported by the South China Morning Post last week.

Bottom line: “[It is involved] from the supply of generic drugs that Americans depend on every day, to the cutting-edge biotech pipeline that will determine who leads in medicine in the years and decades ahead,” lawmaker Moolenaar added.

China Factor comment: What is certain is that the energy crisis and the rare earth confrontation were wake-up calls for the West. The lessons of history should not be ignored.