WASHINGTON (June 10, 2020) – Over the last several years, hawkish politicians in the United States have argued that we are too dependent on adversarial countries like China for a number of important products. Since the outbreak of COVID-19, those arguments have significantly intensified, particularly with respect to products like pharmaceuticals and medical supplies.  

In a new policy study from R Street Trade Policy Counsel Clark Packard and Associate Fellow Bill Watson, the authors discuss how at a time when policymakers in both parties are looking to lower drug costs, reshoring the supply chain would be extremely costly for consumers, and would dampen innovation and hurt competitiveness for a global industry.

They find that data is imperfect, but we are not overly reliant on China for finished pharmaceuticals and active pharmaceutical ingredients.

They argue that instead of sclerotic protectionism, the United States can secure its pharmaceutical supply chain by creating more trade agreements and pursuing smarter domestic policies to incentivize American pharmaceutical manufacturing.

They conclude by saying, “Existing pharmaceutical supply chains are diverse and produce benefits that accrue to American consumers. Exploiting the COVID-19 pandemic to haphazardly undo these supply chains would be a grave mistake that could result in higher prices or shortages of various drugs.”