June 30, 2020

Warren, Rubio Introduce Legislation to Study the Effects of America's Overreliance on Foreign Countries and Foreign Direct Investment in its Pharmaceutical Supply Chain

Legislation would require a report within one year of passage

Bill Text | One-Pager

Washington, DC - United States Senators Elizabeth Warren (D-Mass.) and Marco Rubio (R-Fla.) are introducing legislation to direct the Federal Trade Commission (FTC) and the Secretary of the Treasury -  acting through the Committee on Foreign Investment in the United States (CFIUS) - to conduct a study on the United States' overreliance on foreign countries and the impact of foreign direct investment on the U.S. pharmaceutical industry. In March, Senators Warren and Rubio introduced bipartisan legislation to combat America's supply chain risk and dependence on China for pharmaceuticals. 

The United States relies heavily on foreign nations for its supply of drugs and pharmaceutical products. Today, nearly 80% of the active pharmaceutical ingredients (APIs), the requisite component of drugs used in generic drugs, are imported from abroad. This overreliance leaves our supply chain of critical drugs used by millions of Americans vulnerable to disruption - whether by accident or by design.

"To defeat the current COVID-19 crisis and better equip the United States against future pandemics, we must take control of our supply chain and rely less on foreign countries for our critical drugs," said Senator Warren. "Our bill will require a study to show the effects of this overreliance and identify the tools we need to confront it head-on." 

"More than a year ago, I warned that our nation has critical vulnerabilities and supply chain risks in key sectors of our economy, including in pharmaceuticals, as a result of decades of lost industrial capacity to China," said Senator Rubio. "The coronavirus pandemic has made it painfully clear that we must take decisive action to rebuild our nation's medical manufacturing sector. This bipartisan bill would ensure policymakers have the necessary information to address our supply chain vulnerabilities, the consequences of foreign investment in U.S. pharmaceuticals, and reduce our overreliance on China for pharmaceuticals."

This overreliance stems, in part, from foreign investment in the U.S. pharmaceutical supply chain. While not all foreign investment is problematic, experts have warned that significant foreign control of U.S. based pharmaceutical companies could stymie domestic capacity and exacerbate the nation's overreliance on foreign nations for its APIs, raw ingredients, and finished drugs. Despite the risks posed to the United States, the nation lacks detailed information on the nature of this investment.

The U.S. Pharmaceutical Supply Chain Review Act would require the FTC and Treasury, through CFIUS, to provide Congress with a report on the following within one year of passage: 

  • How overreliance on foreign countries for pharmaceutical products impacts the United States' supply chain and domestic manufacturing capacity;
  • How foreign direct investment from abroad affects the nation's ability to produce drugs, as well as their key components;
  • How foreign direct investment in U.S. genome sequencing technologies affects domestic capacity to sequence or store DNA; and
  • The number of foreign investment transactions in the pharmaceutical industry and the sequencing or storage of DNA in the United States that CFIUS has reviewed in the past ten years.