As the rhetoric ratchets up in the ongoing trade war between the United States and China, there arises the very real possibility that the medicines we prescribe, dispense and use every day here in Australia, could be the collateral damage.
When Donald Trump introduced a 25 percent tariff on $34 billion worth of Chinese imports in July last year, the Chinese promptly responded by slapping tariffs on $34 billion worth of imported U.S. goods. U.S. agricultural commodities were the target in that instance, however there is real concern that, next time, China might cast an eye over its near-monopoly on the raw ingredients used to make pharmaceuticals.
More than 80% of the active ingredients used to make the world’s prescription medications are manufactured in China and India, with China producing the lion’s share. Very little is manufactured in the U.S., where most of the world’s pharmaceutical companies are headquartered. So as the relationship between the U.S. and China continues to deteriorate, the possibility that China could use drug supply as a weapon of choice and block exports of pharmaceuticals, becomes very real.
With regular and on-going drug shortages already at worrying levels in the U.S., any disruption to the supply of raw pharmaceutical ingredients, even a short term one, would have a devastating impact on America’s health care system. Not to mention the economy.
The American Society of Health-System Pharmacists is so worried about the situation they are urgently calling on the government to address “national security threats” they say could arise from “foreign manufacturing of critical drugs.”
Pharmacy Director of University of Rochester Medical Center, Curt Haas, told America’s NPR program that if China blocked pharmaceutical exports to the U.S.,“It would be catastrophic.”
“We’re looking at it. We’re trying to plan for it,” he said, “It’s in the back of our minds…”
To date, Australia has stayed well away from these trade wars, however as we export 90 percent of our medicines from overseas, mostly from US-based companies, any pharmaceutical shortages felt in the U.S. will also be felt here.
As a back-up plan, compounding pharmacies can make up some of the shortfall during prolonged drug shortages, however they still need access to the raw ingredients to hand-make their medications. If China limits supply of raw ingredients, the ability of compounders to do their job will be severely impeded.
Prime Minister Morrison has already indicated he does not support the US’s arbitrary tariff policy on China and will be pushing for a return for a rules-based global trading system at the G20 summit in Japan.
“We should not just sit back and passively await our fate in the wake of a major power contest,” the prime minister said, as reported by The Canberra Times.
“There are practical steps that we can pursue. So we will play our part. We will not be passive bystanders.”
China’s diplomatic relationship with Australia is much friendlier than with the U.S., so the hope is if pharmaceuticals come into play in the trade war, it will only apply to the U.S and not Australia. This would then enable Australia’s compounding pharmacy sector to fill at least part of the supply gap that will result if American drug manufacturers are left out in the cold.
Let’s hope it doesn’t come to that.