As concerns rise about the growing percentage of U.S. drugs manufactured in China, U.S legislators are seeking measures to bring more of the industry back onshore.

During a congressional hearing Wednesday, regulators and lawmakers in both parties expressed interest in reducing regulatory hurdles and providing incentives to domestic drug manufacturers to boost production.

The U.S., a global leader in pharmaceutical research and development, makes just over a quarter of the world’s pharma ingredients, according to the Food & Drug Administration. Federal support may help boost investment in the heavily regulated industry, which struggles against lower-cost, less-regulated manufacturers in China and India. China has put a priority on drug production, which has boosted growth there, Michael Wessel, commissioner of the U.S.-China Economic Security Review Commission, said at the hearing.

Wessel noted that Chinese venture capital investment in U.S. biotechs has remained steady, even as overall foreign direct investment from China has declined this year. 

“China seeks to harvest opportunities and, often, capitalized on intellectual property advances here,” Wessel said. He told lawmakers that China has been paying six-figure sums to U.S. drug experts willing to come work for its companies.

The efforts come as private equity, venture capital and public companies boost healthcare investments. Fundraising in pharmaceuticals reached $26.2 billion this year, already beating last year’s $21.7 billion total, according to PitchBook. So far in 2019, investments have gone to 448 drug firms compared with 498 all of last year, suggesting that the number of companies are also increasing. 

“China seeks to harvest opportunities and, often, capitalized on intellectual property advances here.”

In addition to a greater concentration of offshore manufacturing, a handful of high-profile recalls of drugs with China-made ingredients has grabbed Congress’s attention. Last year, a blood pressure and heart medicine called valsartan manufactured in China was possibly tainted with a known carcinogen, NDMA, according to Reuters

  • In addition to quality concerns, America’s dependency on China for drugs may be used against it in the ongoing trade war, several witnesses at the hearing said. The federal government estimates that the U.S. comprises one-third of the global market for biopharmaceuticals. 
  • One particular growth area is advanced manufacturing, or the use of technology such as 3D printing to improve how ingredients are produced. The FDA has been trying to spur growth on this front by issuing guidance on emerging technologies, working directly with researchers and expanding its in-house 3D printing facilities.