The right way to buy American? Slow and steady

by | Aug 6, 2020 | Opinion

The White House may soon issue an executive order that would require drug companies to manufacture certain essential medicines here in the United States. Lawmakers in both parties are pushing for more domestic manufacturing of drugs and medical products.

Proponents of these “Buy American” proposals want to reduce our reliance on other countries, especially China. These policymakers have the right idea, making more medicines and medical gear in the United States could help ensure we’re equipped to handle the next pandemic without relying on trading partners. But bolstering the domestic supply chain will take time — and rushing the process could cause the shortages that policymakers hope to avoid.

America is less dependent on China for essential products than many Buy American advocates believe. We already manufacture 70 percent of essential medical equipment domestically. Of the remaining 30 percent, most comes from Ireland, Germany, and Switzerland. China trails as the fourth-largest supplier.

The United States may also be less reliant on China for medicines than many believe. Twenty-eight percent of facilities capable of manufacturing “active pharmaceutical ingredients” (API) — the chemicals used to make drugs — are based in the United States, 26 percent in the European Union and 18 percent in India. China lags behind at just 13 percent.[6] Only three of the 370 drugs deemed “essential” by the World Health Organization contain active pharmaceutical ingredients sourced solely from China.

This data might not provide a complete picture of the essential drug supply chain, but it does tell us that reports suggesting 80 percent of our drugs come from China are wild exaggerations.

This doesn’t provide much comfort for those of us who want to reduce even limited reliance on China. The communist nation has repeatedly violated trade promises and turned a blind eye to the fentanyl smuggling that has led to so many tragic overdose deaths here in the United States.

But policymakers can’t just snap their fingers and repatriate the supply chain. It can cost $2 billion and take up to 10 years to construct a pharmaceutical manufacturing facility.

Policymakers could accelerate that timetable by offering more incentives to domestic manufacturers. Currently, other countries offer far more carrots to high-tech manufacturers. China lets businesses deduct 150 percent of their qualified R&D spending from their taxable income. Ireland boasts one of the world’s lowest corporate tax rates.

A targeted repatriation plan would also prove helpful. The CARES Act tasked the National Academies of Sciences, Engineering, and Medicine with studying the security of the U.S. medical product supply chain. This information will help lawmakers direct Buy American efforts where we need them most, without disrupting safe, useful trade.

The COVID-19 outbreak highlights the dangers of our globalized world. Faced with an unprecedented health crisis, it makes sense that policymakers don’t want to rely on countries like China for crucial medical products. But like anything worth doing, Buy American initiatives are worth doing well. Let’s hope policymakers realize that before pushing through half-baked plans.

For more stories like this, see Aug. 6 issue or subscribe online.

By David A. Ridenour, president of The National Center for Public Policy Research.

 

0 Comments

Related News

Rural America needs sound, predictable tax policy

Rural America needs sound, predictable tax policy

They say that nothing is certain in life ex­cept death and taxes. While those two certainties are undeniable, we need to make sure that family-owned busi­nesses, including farms and ranches, aren’t taxed to death. Texas boasts more than 248,000 farming and ranch­ing...

read more
Absent lawmakers stymie special session

Absent lawmakers stymie special session

Nearly 60 Texas House Democrats left the state last Monday for Washington, D.C. in an effort to stop passage of a Republican-led elections bill. This in effect blocks all legislation since the House doesn’t have a quorum present. As the Austin Ameri­can Statesman and...

read more
We’re global now

We’re global now

No matter how hard we try, we really can’t avoid one another. We live in a world where what takes place some­where else on the globe has a very good chance of affecting us, along with many others. The pandemic, of course, is a useful – if sobering – ex­ample. A virus...

read more
Texans urged to roll up their sleeves

Texans urged to roll up their sleeves

Gov. Greg Abbott and other Texas leaders are rolling up their sleeves to get the COVID-19 vaccine and to encourage the public to follow suit. “I will never ask any Texan to do something that I’m not willing to do myself,” Abbott said before getting vaccinated at a...

read more
Yes, Virginia, There Is a Santa Claus

Yes, Virginia, There Is a Santa Claus

Frances Pharcellus Church – New York Sun – 9/21/1897 “DEAR EDITOR: I am 8 years old. “Some of my little friends say there is no Santa Claus. “Papa says, ‘If you see it in THE SUN it’s so.’“Please tell me the truth; is there a Santa Claus? “VIRGINIA O’HANLON.“115 WEST...

read more
Get your flu shot, governor says

Get your flu shot, governor says

While scientists race to develop a CO­VID-19 vaccine, Texas Gov. Greg Abbott is urg­ing everyone to get a flu shot. Texans need to do their part to keep moving forward the state’s recovery from the pan­demic, the governor said. Last week, he also eased restrictions...

read more
Pandemic messes with Texas, prompts new message

Pandemic messes with Texas, prompts new message

Even during a pandemic, it’s best to not mess with Texas. Texas Department of Trans­portation officials noticed more personal protective equipment -- face masks, wipes and gloves -- on the side of roads and high­ways, so they called in the big guns for a new round of...

read more
High-tech Lincoln Logs turn heads in Texas

High-tech Lincoln Logs turn heads in Texas

Trees are almost as old as dirt in the con­struction industry, but they’re new to Texas in the form of the state’s first mass timber office building. The Texas project generat­ing the buzz is The Soto, which opened last week at Eighth and Broadway streets in San...

read more