A bipartisan bill reintroduced by three senators aims to increase transparency around foreign influence on the United States’ drug supplies as a potential first step to imposing restrictions.
The draft legislation (PDF), titled the “Pharmaceutical Investment Oversight and Accountability Act,” would require the U.S. federal government to map out not only the makeup of foreign manufacturing in the U.S. supply chain of pharmaceuticals, but also how foreign investment affects domestic production.
Although the bill does not single out any specific country, at least one of its co-sponsors, Florida Republican Sen. Rick Scott, chair of the Senate’s Aging Committee, has one name in mind: China.
“There is no reason why we should be letting our adversary, Communist China, […] control our medicine supply chain,” Scott, a noted China hawk, said at a July 15 committee hearing on foreign control of U.S. drug supply chain. “If they wanted to, they could restrict exports tomorrow of the critical ingredients needed for life-saving medicines.”
It’s no secret that the U.S. relies heavily on China and India for basic components, such as key starting materials (KSMs) and active pharmaceutical ingredients (APIs), to manufacture drugs.
According to data cited during Wednesday’s hearing, in the U.S., 94% of the KSMs for the commonly used antibiotic amoxicillin and 74% for the blood thinner heparin used in hospital settings came from China.
However, the full extent to which the U.S. relies on foreign drug supplies remains unclear. Part of the draft bill would task the Federal Trade Commission and the Department of Treasury to assess the role of foreign drug manufacturing in annual reports submitted to key congressional committees, the health secretary and the FDA commissioner.
The bill goes one step further, requiring that the said annual report examine how foreign investment impacts domestic drug production.
“We’re going to examine a different but related problem—not just what drugs are, where drugs are made, but who owns the companies making them,” Scott said in his opening remarks at Wednesday’s hearing. “Foreign ownership and control can create leverage over our drug supply that is largely invisible to the federal government.”
The U.S. government, through the treasury department’s Committee on Foreign Investment in the United States (CFIUS), already has mechanisms in place to scrutinize foreign investments in local biopharma manufacturing.
Under existing policies, a foreign entity buying an existing U.S. manufacturing facility or drugmaker, or entering into a joint venture involving U.S. biopharma assets, needs to undergo national security review by CFIUS. However, the agency has limited jurisdiction over what’s known as “greenfield” investments, in which a foreign company builds a brand-new facility in the U.S.
“It’s troubling how foreign actors continue to deepen their impact by expanding ownership, investment and control of our supply chain,” Sen. Kirsten Gillibrand, D-N.Y., ranking member of the Aging Committee, said during the hearing. “We must bolster federal oversight efforts and increase transparency on how foreign capital impacts American healthcare infrastructure.”
In a third component, the bill’s required annual report would also analyze the influence of foreign investment on domestic technologies used for DNA sequencing or storage.
While the bill stops short of imposing any restrictions, Scott suggested that they might come next.
“Transparency is the first step, but it’s just the first step,” he said.
“Securing this investigation is the first step in strengthening our drug supply chains and ensuring Americans always have access to life-saving medicine,” Sen. Elizabeth Warren, D-Mass., another co-sponsor of the bill, said in a statement.
This isn’t the proposal’s first legislative rodeo. It was first introduced in 2020 and then again in 2024.
The bill might be able to gain more traction this time amid growing tension in the U.S. over China’s rising biotech industry. Some lawmakers and industry insiders have called for additional restrictions on licensing Chinese biotech assets through the expansion of the COINS Act.