U. S. China links to health and medical products, assessing Market Opportunities Economic Health and National Security risks of these relationships. We will start with Benjamin Shobert at a senior associate for interNational Health, the National Hero of asian research. Mr. Shobert is the director of strategy for Health Business strategy at microsoft where he lead engagements with national governments, providers and the biotech community. Next we will hear from Katherine Eban an investigative journalist for Fortune Magazine contributor and arnie Andrew Carnegie fellow. Ms. Ebans book bottle of lies reveals fraud and i are conditions in the overseas manufacturing plants with the majority of her low caste low cost where medicines made. Our third panelist is Yanzhong Huang professor and director of Global Health studies at seaton hall university. Dr. Huang is also a senior in Foreign Relations where he directs the health and governments around table series encoder asked the Global Governance project. Finally we will hear from craig allen president of the United States business counsel. Prior to joining cbc mr. Allen had a long career in Public Service which included both bookstores in china broader asia and culminated with his appointment as a u. S. Investor for per night from 2014 to july of 2018. I ask all of our witnesses to standard mr. Shobert we will start with you. Good afternoon thank you for the opportunity to come back. Its always a pleasure to be here and to testify. Across washington d. C. The last three years have been marked by a recognition that much of what has been taken for granted in the u. S. China relationship specifically and globalization more generally needs to be reassessed. Given the extent which is normalized relationships between the United States and china had been assumed and taken into account during the construction of critical supply chain such as those in the pharmaceuticals and medical device sectors much of the thinking has been jarring and it has provoked policymakers and politicians to rethink assumptions that undergird the Global Economy for nearly three decades. Whether we should assume that health care will remain a tech make sector not subject to the strain and fissures that mark other hightechnology or whether chinas foreign has not felt these pressures will send will requiring a passionate assessment. Assessing risk we must assuage whether chinas success in other hightechnology sectors are applicable to health care. Health care ecosystems and in particular Life Sciences biotech are fragile and if proven difficult to recreate. Were they up and develop the second deck eight and cultivation between academia of venture Capitol Medical centers. While no one should down doubts chinas appetite for making these investments a degree of caution is worth striking is whether well be as successful as it has been other hightechnology sectors. Should chinas ambitions proved to be unfulfilled its possible for in health care and please may experience increasing difficulties over Market Access for Technology Transformations and if so Health Care May find todays more open and positive relationship with the Chinese Market including regulators could change. Risks will need additional attention from a policymakers as they relate to the lessons we should learn from the experiences of other hightech Knowledge Industries in china. First the impact of ongoing treatment tensions on bilateral chain uncertainties each of which has unique characteristics in the Health Care Sector anxiety over where you get your new iphone is one thing uncertainties over where you get your and their products or antihypertensives is quite another to the world, not just america has become increasingly dependent on china as its source for manufacturing pharmaceuticals. Whether america should have taken the dependency on foreign manufactured pharmaceuticals is not a question that is directed to the u. S. China relationship. Rather if american policymakers want to ensure a Certain National formulary is widely available to the public in times of crisis policies around Domestic Production and the National Formulary would be appropriate. Is worth calling our collective attention to this concern. Taking a dependency on china for pharmaceutical products has historically been understood as one of the reasons u. S. China relationship should be brought up a safe and stable periods interpreted through a lens of mistrust. If we indeed believe america cant take calculated dependency on china for critical components to moderate Life Health Care medicine being just two of those and we are still working in however if we no longer believe america can do so much of what has supported the modern era of globalization is no longer valid the second risk is sipping his role in the American Health care step sector predetermination by sipi is the company would have to divest its 1 milliondollar vestment in the American Health care platform has drawn significant attention buy american and chinese investors and has already had a negative effect on bilateral investments. Third difference in appetites for investment and for risk in relation to Large National biobanks funded by the american and chinese legal system. The datasets that result from these investments serve as the foundation for the 21st century economy. The greater diversity of quality and quantity of Data Available to researchers should in turn result in an accelerated development of medicine which should enable companies to spin out privileged data steps justifying government led investments in these datasets has become increasingly difficult in the United States in particular. For asymmetric data processes and standards between the United States and china and their impact on economic competitiveness needs to be more fully understood. As currently embodied in law and practice american researchers do not have symmetrical ability to work with chinese data assets is to chinese researchers to work with americans. Artificial intelligence and ability, excuse me Artificial Intelligence is ability to develop new cases hinges on large qualities of training and no country in the world is so serious about funding the aggregation across a number of disparate of which health care is just one that is china. American policymakers wrestle with questions around asymmetric data access policies between the United States and china would be wise to keep in mind American Health care and Technology Companies tinted benefit in a promulgated policies in both countries were to exist that allow training in both countries datasets. A current investment levels china will amass a larger and more Diverse Health care system for a set of data on which to train a ive been with china. With that recommendation to the Congress First deliberately engage the chinese fbi into american based on our companies ability to do the same on china and review americas National Formulary sent determine how best to construct a supply chain in time of crisis. Eric pursue harmonize standards from the sharing across borders for personal Health Information for the updater trade policy to reflect the era of big data and Artificial Intelligence and fifth make sure that our government has an appetite relative to its ambition in sectors such as biotechnology and Artificial Intelligence sectors is certainly of the National Security application to them but perhaps most critically directionally important as to where economy goes over the next few years. Thank you. Perfect timing. Ms. Eban. I hope i can do so the timing. Thank you for having me its a pleasure being here today play. The decade investigating the overseas manufacturing plants are the principles of generic drug in the u. S. Market. The effort culminated in a recent publication of mynheer times bestselling book bottle of lies, the inside story of the generic drug whom put came in me the book takes leaders into the manufacturing plants are the majority for a lowcost generic medicine is made and revealed endemic fraud in dire conditions to report the book i traveled to four continents. I was in china as well interviewed hundreds of sources and obtained over 20,000 pages of confidential fda documents. The u. S. Drug supplies 90 generic with the majority of those drugs coming from overseas principally india and china as well as 80 of the active ingredient in all of our drugs whether brand or generics come from overseas from china and india. Its crucial to the health and safety of the American Public that these drugs are effectively regulated. Those standards should be permitted to enter the u. S. Market and yet china has been a continuing source of vocal traded drug products most recently its active ingredients for the generic Blood Pressure medicine bow spartan that was found to contain a carcinogen previously used in the production of liquid rocket fuel which is not good for you. If the investigators found widespread fraud and manipulation of quality data in chinese manufacturing plants. After extensive reporting on this topic is my conclusion that the fda is not effectively regulating the overseas manufacturing plants including in china that exports u. S. Markets. Fda officials are allowing substandard drug products to enter the u. S. Market. They are making exceptions for reasons that include concern over drug shortages and confusion about their own authority overseas. The fdas investigators are spread too thin in china and the relatively small cadre of usbased investigators willing to perform overseas. Conclusion i believe the fda must overhaul its foreign Inspection System and more strictly enforce its own regulations to ensure the safety of the American Public. With that i like to give you three examples which are from my book where i talk about inspections in china. I followed an investigator named peter baker who arrived in beijing in 2015. Of 38 manufacturing plants as he inspected in china the 48 plants he inspected in china he found fraud or data manipulation in dirty aid of those plants. We know that there is endemic fraud and chinese drug plants because chinese regulators have found that them selves. In 2016 an investigation by chinas own National Products administration found 80 of Clinical Trial data submitted by Chinese Companies to regulators to gain approval for new drugs was fabricated. As an example peter baker showed up at a plant 200 miles south of shanghai which was the site of a joint venture with pfizer to make highquality low cost medicine. It was not a fly by night plant plan. It was chinas largest exporter drug ingredients to the u. S. Peter baker instead of requesting documents as many fda investigators to look inside the computer of the client and using rudimentary measurements that you using college looked for chinese symbols for the words trial injection and experimental samples. Despite a threeyear head start it took him about a day to figure out the plant was running an alternate in Hidden Laboratory operation and secretly pretesting its drug samples and unmasking the results in part by turning off audit trails to leave no evidence of the test. The fda followed up by putting the plant under an import alert but then lo and behold discovered 15 of those drugs were in short supply in the u. S. And lifted the restriction on those drugs. I cite another example when an fda investigator showed up at a plant that makes skin patches for pain and the plant manager grew increasingly concerned about the inspection and ended up holding the investigator hostage in a Conference Room for hours. The investigator was not released until the intervention of Chinese Police and chinese regulators. Despite that incident the actual hostage situation the fda concluded that the plant did not make a specified refusal of the inspection and so did not impose an import alert on the plant after that inspection. A third example is whats happening right now which is a worldwide recall of bow spartans active ingredients which were found to contain a carcinogen. An fda ms. Raider went to the plant in 2008 and actually found the plant was not investigating them. These in the active ingredient which showed up and recommended to the fda official action indicated which would have restrict did those drugs from coming into the u. S. The fda determined that the pharmacys response was adequate as a concerned the action pertaining to the chromatograms and demonstrated the peaks did not impact the product so did not impose an import alert. Guess than a year later that plan was under worldwide restriction because the drugs contained impurities. In closing i would suggest that the fda needs to overhaul its foreign drug inspection program. Needs a go to highly trained wellfunded cadre of inspectors with the clear career path. They should perform short notice or no notice inspection as opposed to announcing the month in advance as they do now and they should rarely overrule the recommended sanctions of its own inspectors which happens all too often now. Thank you very much. Thank you. Dr. Huang. Thank you commissioner wortzel commissioners. Thank you for having me at this important hearing. Thank you for inviting me to this important hearing. I am going to talk about the u. S. Governments access to the Chinese Health care market. In my written testimony i have talked about the Chinese Health care market, the market my oral presentation today i look at the challenges faced by u. S. Health firms in the Chinese Market as well as concluding with policy recommendations. Basic lee despite improved conditions for Market Access by u. S. Health firms buy some new challenges in the Chinese Market the Government Policies clearly target the Chinese Health industry against foreign firms. It seeks to increase the share of domestic components and materials of medical devices to 40 by 2020 and 70 by 2025. Chinese pharmaceutical firms call the improvement competitiveness. As of january 20 teen china has the thirdlargest number of pharmaceutical firms. It was reported from some multinational pharmaceutical firms including the u. S. With the deepening of Chinese Health care reform they are also facing increasing pressure to to make their drugs more affordable. Its a super agency called the National Health care Security Administration and they have been charged to lead Everything Health carerelated in china in negotiating with farmers. If china starts imitating a Health Care Model of uks National Health service the nhs a war placed the u. S. Dod for the worlds biggest employers. That negotiation with foreign farmers are just 44 across 36 products in 57 on products and will 2018. In late 20 teen the government lifted 31 drugs in the program that covered all Public Hospitals. That represents a third of chinas pharmaceutical market. Under this cut throat winner takes all process faulty National Farmers use this wisdom high market share for the high cost of pharmaceuticals because assurance for their medicines are no longer guaranteed. In june 20193 launched a Pilot Program of diagnosis related groups that classifies hospital cases into different groups. It is expected the program is going to be nationwide in five to 10 years. The new provider payments and to lower the cost of health care and the cost of pharmaceutical products. This poses new challenges for foreign farmers abdicating their products. Not only will they have to ensure their products included in different patient groups but they need to lower the drug costs might discourage chinese doctors from prescribing new and innovative drugs. The ongoing trade war threatens u. S. Pharmaceutical firms efforts to access the Chinese Market. We know this was on sale by the Chinese Government importing u. S. Goods using drugs and medical devices. Leading chinese economists in march recommended aging should curb its exports of api in effect to pharmaceutical ingredient as a countermeasure in a trade war with the United States. Im going to talk about the Regulatory Burden for the pharmaceutical firm. Despite chinas effort improving the regulatory process a regulatory system continues to prevent a significant word to pharmaceutical firms in china. The onerous requirement puts the market out of reach for small Startup Companies with investment capitol. Foreign companies faced tough closure requirements and filing applications for their products. Pharmaceutical firms get their products included in the reimbursement it involves too many Government Agencies and they have to be on the go across the country to participate in attendance. In a centralized System Pharmaceuticals contribute to the additional Regulatory Burden for the sake of time in reaction to the policy recommendation looking at the engagement in Chinas Health care market reveals dynamics that until recently until 2017 enabled the engagement that thrive despite the fluctuation in u. S. China relations. Today the booming Chinese Health care market has created challenges for u. S. Firms. If history can teach us anything its that both sides should avoid putting the Health Care Industry at risk as the result of deteriorating bilateral relationships. Usdi did the right thing by including pharmaceuticals and select medical goods from its in me but i think it is mostly important that we keep in mind that that becomes globalized and in collaboration the Research Becomes the norm we should avoid looking at the entire u. S. China Health Related investment through the terms of National Security. In a nutshell that principle applies to china and the United States. Thank you. Yankee mr. Allen. For the opportunity to testify before the commission today put im here to present at the u. S. China business counsel for private nonpartisan Nonprofit Organization with approximately 220 American Companies across all Industries Sectors that do business in china including the Health Care Sector. Also as noted former u. S. Ambassador and a trade negotiator with the department of commerce where he lived the discussions to improve chinas Market Access for medical devices and pharmaceuticals. Ive dedicated many years to increasing american jobs through altering our export sector. Its my belief that america remains among the most innovative nations because we cultivate the free flow of ideas , information and people and we engaged in a deliberative process that encourages and respects different opinions in order to arrive at decisions to benefit the greatest good. As the commission considers the relationship between the u. S. And chinese are said like to highlight three main principles that under live my recommendations. First u. S. Investments in china benefit the u. S. Economies. Companies have benefited greatly from the Growth Opportunities arising china has provided mostly through rapidly growing exports. Important to note Companies Invest in china to access and serve chinas domestic market but the revenue that they raise in china offers a growth and innovation in the United States. In 2015 our latest numbers u. S. Exports to china directly and in direct we supported one point a million jobs in the United States. The economic benefits generated from u. S. Investment in china and chinese investments in the u. S. Are combined the total jumps to 2. 6 million american jobs. The health care there is an important part of the story to u. S. Exports of pharmaceuticals to china raised 3 billion in 2018 as the biopharmaceutical industry supports 4. 7 million u. S. Jobs. The medical Device Industry supports 2 million u. S. Jobs. China has become the worlds secondlargest market versus pharmaceuticals and fourthlargest market for medical equipment in this market is growing rapidly as china ages. Its increasingly important that u. S. Companies continue to participate in this space to support job creation. The second principle is commercial challenges are best addressed through engagement. Its my experience that Chinese Health care regulators are properly focused on safety and efficacy and they want to learn from us and with us. Nonetheless well u. S. Companies have seen tremendous opportunities in china there are remaining access barriers that affect their companys ability to equally compete. The majority of these challenges are highly when nature and unique to the Health Care Industry and they would include one regulatory approval, pricing and reimbursement control and three instantly insufficiently affected Property Rights and implementation previous government cannot arrive at the most effective and sustainable approaches to resolving these very important trade issues if the are industry stakeholders and experts are not closely consulted. The most effective way is through regular dialogue between key u. S. And Chinese Government stakeholders. Take. Commercial issues in their ears to trade require regular precise and technical discussions. Also international provide clinical critical opportunities to leverage bilateral institutions to encourage china to adopt International Best practices and standards which will indirectly support u. S. Exports. The third principle is a Bilateral Dialogue makes us stronger. The Chinese Government has strong incentives to improve basic health care and expand access for innovative treatments for chinas growing and rapidly aging population. These are goals that u. S. Companies are well positioned to support. There are mutually Beneficial Solutions to be had by reducing technical barriers to trade through cooperation and engagement but we need to communicate regularly to compare best practices and ideally we need to build on a foundation of respect, trust and collaboration for recommendations i would submit to you for ideas. First we need to leverage all available tools for engagement. The government should seek to engage china through bilateral regional and multilateral forums to help foster improvements in chinas regulatory environment. We need to get back to platforms to regularly discuss these technical issues and encourage the Chinese Government to return to solve Health Care Reforms and find mutually agreeable solutions which will improve health care and safety and will also help to expand u. S. Exports. Secondly and in these consultations please continue to involve the private sector Industry Experts and the technical policy dialogue. It is essential that highly technical nuance to Health Sector issues are systemically addressed to target policy discussions not only between governments in consultation with industry but also with technical experts as well. Thirdly please strongly support missions like ustda and fda and the fda. Those organizations deserve huge Financial Support and then finally we must do narrowly and precisely defined emerging tech ologies and foundational technology. It is imperative that there control policies do not unduly limit innovation in american exports of that the ultimate goal is to maintain u. S. Leadership particularly in advanced sectors. Thank you for your consideration i thank all of you for your timeliness of your testimony. Commissioner cleveland. I just have one question to start. You noted that 80 of the data from sierra os was estimated to be fraudulent and we heard this morning that American Companies are increasingly relying on the cros. And if you speak to the regulatory process and what confidence can we have in the system . Thats troubling. We have talked about the ingredient in pills and Clinical Trials are fraudulent in that raises a new level of concern. In my investigation i found there is extensive fraud in cros and in fact a major fraud and an Indian Company was first triggered by finding fraud of the sierra but generally overseas we are relying for drug approvals on the data that this zeros are providing and of course it is the Drug Companies themselves that are paying to see arrows and it is a very frequent thing to have a back channel agreement that makes the data work out okay. My finding is there is endemic fraud. The fda is not up to the task necessarily of testing it and inspecting it an even more troubling is the fdas sort of prep this that all overseas inspections it announces its inspections in advance so it gives the Companies Six to eight weeks of advance notice that its coming which lets the companies whether they are cros or Drug Companies to stage manage these inspections for the companies are making travel arrangements for the fda. They are taking fda investigators out to dinner and often its just one fda investigator with a handful of days to inspect these firms. I think theres a tremendous amount of fraud that we are detect and enter drug supply from overseas is based on the data thats getting produced in that manner. You talked about see arrows in your testimony. I think here we spoke about that is one of the two forms of outsourcing services is booming in china as i pointed out. In your recent statement in china there are more than 1100 sierras around the globe based in china. Their market is one of the largest. 10 of the worlds market so it is very large so there are endemic problems in terms of size and quality of the Clinical Trials for example. In the meantime i think its important to china in the past few years have indeed made efforts in trying to approve improve the quality of the development and manufacturing of the drugs. Important measures launched by the icp i a has consistency. They want to basically, the efforts to consolidate the chinese pharmaceutical firms. Big companies are using these measures with the requirement on the efficacy and safety of the generic drugs to try to weed out and list half of the 3000 strong pharmaceutical firms. That. But the core issue we are talking about here is the safety of the products were importing. Thats not a question of fair or unfair, its a question of life or death. I dont mean that to or in any way to smart you but i dont understand why our desire to have a regulatory system in china, our desire to potentially block imports or anything else, if they cant be validated as safe. This should be viewed as an unfair approach by china. Im not saying you who said that but it that of what im feeling. Were asking them to be up to worldclass standards. Not doing that for protection, we are doing that for health and safety for our people. Its protecting their health and safety yes but not protecting market share or businesses or et cetera. Can you help me in terms of how the chinese view this. To view view us as being unfair question mark. Thank you commissioner, my approach to the subject for the last 25 years has been as a process of trying to promote experts. One of the key factors has been the us fda trying to increase standards across the board from 25 years ago, they started out with good manufacturing practices and then good clinical practices and they have really done good work to try increase standards across the board. That process, benefits us consumers obviously. As well as chinese consumers. There has been a Virtuous Cycle of consultation between the fda, the department of congress and ucr for many years. So as to try and improved standards or for all up to us standards or global standards. The hires Chinese Standards are the better it is for American Companies and american exporters. So there is a commonality of interest here. With chinese regulators who wish to advocate for and to ensure the safety for chinese consume consumers. This is along with us. I would also note with that because of the doubts of chinese drug and consumer medical device products, they are foreign and particularly American Companies have a very high reputation for quality. Thus our market there, is very strong and has been strong for a long time. I would posit with you that there has been a Virtuous Cycle over many years that cycle has at least temporarily stopped. I would argue that it is an hour interest to renew that cycle and to engage with the chinese regulators and American Companies to address many or at least some of the families within chinese manufacturing and the chinese regulatory space. The chinese regulators face terrible problems in trying to regulate their own country. The fda has helped them. Benefiting not only them but benefiting all of us. Thank you. Sit back im sorry. Go ahead police. Just a quick followup on that comment. The chinese safety issue is indeed a big problem. Their scandals of the past. In the meantime, youre also provide opportunities for the us companies to break into the Chinese Market. We saw this additional pressure for the chinese pharmaceutical market. In this summer of 2018. One of the largest chinese vaccine makers showed substandard dosage of vaccines, tetanus and whooping cough. They did a survey of more than 300,000 parents, and they found that 79 percent say that before the scandal, they wouldve given their child children there chinese children the vaccine. After that, only 60 percent actually only 40 percent said that they would like chinese medicine after the scandal. 60 percent would consider having their children inoculated outside china. In the course of my recording, i came across example after example of the fda essentially pulling his punches with chinese plans. Detecting fraud, substandard potentially substandard, products and choosing not to sanction those plans. What seemed clear to me is that diplomatic concerns are interfering with Public Health and safety. We dont have this problem in the us. Inspectors show up unannounced and they stay as long as they need to, they find with a find. Whats going on in china is very different. I would basically say, we actually choose to get tough on china, and the way to do it is to say, you want to sell you drugs into our market, youre going to give our investigators visas, theyre going to come over, theyre going to inspect on short notice are unannounced. Thats going to be how it goes if you want to sell it to our market. Understand. It sometimes hard for people to understand when they see the activities being taken against chinese more than 50000 internet police, et cetera et cetera if china wanted to regulate and ensure the efficacy and safety of its products, it could do it. It just chooses not to. Commissioner beeler. I dont want to beat a dead horse. Regarding inspections. In the context of engagements, if a nation if the people you are negotiating with an engaging with, do not accept the premise of unannounced inspections, why would you waste your breath after that . An issue like this. I would agree to engage them if they agreed to do unannounced inspections and i would engage them after they proved that i could do unannounced inspections. Does anybody know any regulatory system, anywhere in the world, that is robust, that doesnt include unannounced inspections question mark no, is there anyone . No there isnt. How many of you therefore are comfortable with the fact that 80 percent of the api produced in the world that are coming into the United States and or drugs are produced by those folks . Are you comfortable question mark personally. I am definitely not comfortable with that. My book reflects that. I will just say, the fda did do a Pilot Program in india of unannounced inspections from beginning of 2014 through the mid 2015 and as a result of those unannounced inspections, the rate of official action indicated findings which is the most severe findings increased by almost 60 percent. The fda, inexplicably and i never got an explanation from them, discontinued that program and went back to preannounced inspections in india. However, there is no, and i understand there is no on the books, that is preventing them from doing this. Thank you. Im comfortable with chinese supplying all of the apis basically in the World Without unannounced inspections question mark does that make anybody comfortable . I think nobody or no americans would be comfortable with that. [laughter] apis, especially considering the quality efficacy problem in the country. But when i am kind of slighted a different opinion. We dont want to securitize the dependence on chinese drugs. And that we dont want to make that a National Security problem. For the following reasons. First, the us is relying on china for this drugs because of the shifted global pharmaceutical supply chain. Also because of the 2000 us fail trade agreement that enables usbased and multinational pharmaceutical to buy ingredients for the drugs made in the United States. Also its because of that china, lack of competitiveness in the pharmaceutical industry. They have to focus on those lowend apis, [laughter] or generic drugs. It does not reflect the country, Clear Strategy like in china against the United States. And second, the technologies used to make this drugs, the only country that can make this drugs, china becomes needing api producer that is supported because they need to make it. We do have the way to solve this available but it is more expensive. Perhaps the president should protest. To drive the production somewhere else where they do unannounced visits. Let me say something. National security is widely. Lets understand something, the drug ingestion security of the American People is a National Security problem whether its a traditional National Security problem or not, it is a National Security problem. I think we view or at least i do, if we are talking unsafe, it is a problem. It is a serious problem. Im done for now. [laughter] for now. You didnt answer my question, some of you did. How comfortable you are with us being so dependent for apis on the country that is not allowing the most fundamental premise of inspection to exist. Im not addressing the question of the 16 inspectors are sufficient, i know not. Im not addressing the question of if we spent a hundred million dollars. I am questioning the fundamental premise. Im not even certain that china has said no to unannounced inspections. It is the us fda that is said no to us to unannounced and in inspections. An email after email that i obtained in the course of my reporting, they are concerned about diplomatic incidents. Thats why they dont want to do it. There is a long history of various other subjects where the us has sought to inspect and that unannounced doesnt happen whether it be forced labor or takes two years to get in inspect and not six to eight weeks and all kinds of other problems. If sovereignty issue they express sometimes, this that new thing, the fact that it doesnt matter what they explained that or not. I think in terms of unannounced visits, the chinese fda, the health regulation, they do now actually using more reliable frequency of those unannounced visits. The inspections. The vaccine scandal was uncovered. So we should encourage china to use more what they call slide visits or inspections more and more. Potentially could also have our fda office in china to join those inspections. We could use our leverage by the end of trade negotiations with china to actually ask china to allow us to join those inspections. In the meantime, i also wanted to. Out whether we feel uncomfortable and that is that we talk about that we are relying on china, right, for those apis to generic drugs, and in the meantime lets look at the other side of the coin. China also is relying on us to, for the most effective innovative drugs. This is especially important and not just about the market of 11 billion market in terms of chinese exports, medical and pharmaceutical products. It is also about the legitimacy, the government get legitimacy and it is performancebased. It changes the delivery, and good health to the people, its also about delivering effective medicine to the people. That currency, would be provided by multi National Farmers including the us pharmaceuticals. Doctor you talked about consolidation and of head of the witnesses and other panels talk about consolidation as well. The Chinese Government wants to consolidate. Nobody went into any detail so what have they done and what numbers are available. Have they announced any concrete plans and can you feel that in a little bit. What are they going to do in or have they done to consolidate companies and pharmaceuticals. Thank you. If you look at the chinese pharmaceutical industry, that is the governments started to that industry since 1980. That is the very fragmented, introduction to the gmps, good manufacturing practices, it is very fragmented, its also competitive, they have even today, the measurements are around 3000 pharmaceutical firms, many of them are small. Important players in the chinese pharmaceutical markets, only accounts for 10 percent. Of the entire market. That shows how fragmented the Chinese Market is. So to consolidate those like the big farmers or the us type of big commas that can be more competitive because even naturally. In the meantime, they want also to improve the quality, the efficacy, the safety of the chinese drugs and so they introduced this new regulation and requirement on the quality of the generic drugs for example. If you have or produce a generic drug, the same type that you have to achieve the highest of standards that same generic drug. That way they can weed out at least half of these pharmaceutical. Any of this can answer this question. Is not a trick question. Im just trying to find out what they are actually doing to try to consolidate. Since 2016 the government is also made up a lot of this same thing. Normally, it and agreed a Statement Like that, then they followup. They did this, and this and this. Are there any concrete plans they have consolidate. They subsidizing acquisitions or what . Are you saying that their efforts to impose higher Safety Standards, thats their consolidation . Okay. So theyre hoping that by imposing higher Safety Standards that some of these firms will actually drop out. They also encourage the acquisition and mergers. We have seen some of the biggest of pharmaceutical firms in china actually significantly increase the mergers and acquisition activities. How was the government encouraging that. Is there a special fund. They know how to encourage something when they want to encourage you. Right. We sing china in 2025, there really are no plans then or concrete policies specifically direct at consolidating the pharmaceutical industry. I havent seen any particular specific government like industrial policy type. So theyd like it to be consolidated but theyre not really doing anything to consolidate. In addition to that its also about how the reforming the tendering process for the hospitals. Thats a significant forcing function in addition to quality standards and inspection. I think its important that we not lose sight and mpa now, formerly bs fda is a new administrating this democratic capacity should not be overstated. They view the tendering process for the Public Hospitals as another mechanism by which they can start to when the list of pharmaceutical companies that persist in the supply chain because if youre not part of the procurement, and the tendering, then youre not going to be able to sustain yourself. Soon after going to do it through the control of the man. Some primarily through the hospital. Give two factors, syriac is that in your statement. And has two levers, one is the continuing to empower the mba, to have additional inspections capacity across the country and second is heather utilizing the tendering process. Civic okay thank you. If youll think of something else, we write these reports and were going to have a section on chinese and the rest of it, we dont want to say anything that we cant document. So i dont want to say that theyre trying to consolidate if theyre really not trying to consolidate. It is just an aspirational goal. Thank you. Back mr. Campos. Thank you for mesh they get to the panel. As i read your testimony in the listen to you, i was struck with your emphasis on the role of our fda. I wanted to provide you a chance to come comment. What impression one gets is that our fda is the problem. I would offer for your comment, navy is a secondorder problem. The firstorder problem is chinese and we need to do a better job, there are limits to what the fda can accomplish. I would like some clarification from you if you like. Personal, we have this model, where we are sourcing our pharmaceuticals from overseas. Thats the sort of number one issue or problem. We dont necessarily have in the question here this being debated was sort of levers of control do we have. To get a different result. That is from china. But the us fda is in charge of protecting us consumers. Saving them from substandard products. As an investigative journalist thats where i my attention but there is no question that we are facing a tsunami of compromised drug products in china. Its just proven over and over again and we have a current ongoing quality crisis right now with this recall of generic Blood Pressure medicine. Millions of americans got it and it came from china. I focus on us fda. We ought to not securitize the trade of either apis or highend pharmaceuticals. Are you aware of any embedded bit structure otherwise to us export of the very high end pharmaceuticals to china . Thank you. In my testimony, mentioned a couple of things. Incomplete intellectual property right enforcement. In the limitation of the intellectual property right the patent regime specifically, there are of course pricing issues, doctor wong mentioned provincial pricing activisms an urge to tempt down pricing to keep the healthcare expenditures relatively low. Third, the approval process of or for new drugs. They can be slow, leading to long delays for american patented products. Occasionally, a chinese generic coming up very quickly soon after the patent product, is approved giving the chinese manufacture some advantages. American pharmaceutical manufacturers have a good number of issues in china. Nonetheless, it is either their second or first second or Third Largest market in the world, its a rapidly growing market. For virtually all of them and therefore an important market for america jobs and growth. Thank you. To complete the thought then that professor long, the impediments are chinese side. Theyre not us policy impediment. And mr. Schober just a last question on data. You introduced that there are kinda two levels that you addressed. The first is, how are we going to think about data in the future. Secondly, you may be somewhat indirectly suggest that we ought to hedge our bets with the regard him how china share data with china and how they use our vita. I was hoping you might elaborate on that a bit. May be just a little bit more time to explain why this issue matters. As we think about the economy, the Global Economy over the next 100 years. One of the most important areas that we get right, in the United States and globally is Precision Medicine. Precision medicine is predicated on the development of these large data sets. These large data sites. To the extent company continue to be asymmetry. And what american researchers can do in china and chinese researchers can do here. That is one of the more best take learning that we should be pulling out of other hightechnology sectors that have struggled with asymmetries while what they can do what chinese can do here and we can do there. We dont have to approach other than a particularly militaristic manner, need to be in all asked as one of the ways in which trade protocols that we are designed to anticipate an era of cast metal. Zero and aluminum sheeting. I dont necessarily do well in an era of big data and Cloud Computing and Artificial Intelligence. I think this need some additional attention. In the space that we are talking about in particular, it is it is relevant, not just Precision Medicine but things like Machine Vision, and how that will be applied in ecology cases, is hard to overstate how important that it is that we get this issue right and very quickly. Thanks very much and thanks to our witnesses. I have so many questions. An ongoing available to ask all of the middle east in the sun. Very quickly, do fda inspectors on the ground have chinese Language Skills . Youve touched on a huge issue. In fact, because it was only seven minutes, couldnt get into it and in my testimony. Mostly they dont. Often, the translators are provided by the companies. In the companys salesman. I have been able to document instances where there are just wild deceptions because of that so sometimes Chinese Companies will pool resources and pay for one show factory that looks like how to central casting and because the fda investigators can even read the street signs, they are each inspecting the same facility but they thought it was for different companies. It is really the language barrier has created an opportunity for really wild deceit. I guess for all of you, im really trying to understand how the chinese got to the. That they are the lowest cost producer on these things. Its really rather stunning that they can produce at a lower cost than india. Government subsidies, what is the patterns that is allowed them to be able to produce at the lowest cost . In my reporting, i sort of traced the rise of china as a leading manufacturer of antibiotics, which was really sort of the rise of china and the pharmaceutical space. Part of that was because the very lax environmental regulations in these pharmaceutical plants create a lot of pollution, but also because they had hundreds of years of expertise in fermentation with soy sauce. Theres fermentation processes and antibiotics. That was sort of like opening the door to them as he goes to producer very very cheap pharmaceuticals and went on from there. Mr. Allen,. I would note that you see similar patterns throughout all of the chemical industries. Often petrochemical, defined chemical to dies, or textiles. China would probably be the lowcost producer around the world. I think nothing nefarious there rather it has to do with the cost of capital being relatively low and very large economies to scale. As well as an entrepreneurial culture, universities that are just pouring out engineers. China as i understand will graduate 1. 8 million engineers this year. And years into the future. So is not unnatural that china would have a very large industry here. Nor that they would be the lowcost producer. Again, all. To india as an example. They have all of the factors that you just mentioned. Also, biochemical and biomaterials of course are automated china until 2025. Means the chinese industry is focused on that. I guess that some what im trying understand. In addition to lax environmental conditions, are there subsidies, what advantages are they providing to the companies that have allowed them to do it. Its not just the low cost of labor but what other things are they doing to build this industry . Massive investments. I think weve covered it or i have to the commission. There is just a massive amount of state led investment in the creation of new biotech industrial parks. Early on, characterized by digging holes and pouring concrete, to create infrastructure and jobs. Then tax monies, but now is starting to become their home to a lot of Novel Molecules are being developed as a result of people returning back to china. Because they view this as an Opportunity Forum to grow. Paragraph professionally and personally. There is no way to talk about this without talking about the massive amount of state investment that has gone into this. Which means of course but we are seeing is what we have seen in industry after industry after industry, right. China is moving of the valueadded chain. But you mention cast metals. We have seen this process all along, we seen what it done to our economy. In this case, it is not just our economies that is being affect affected. It is also a really a National Security issue the health and wellbeing of all of us in all of our populations. One of the interesting things that came out of a short visit to china at the end of may and some meetings here in the us with the American Chamber of commerce is that corporations as a result of terrorists, are realizing that they are entirely too entangled in china and supply chains and they are disentangling in decoupling. I personally think thats a great thing. It creates some problems are a short period of time. I want to pose questions and i do know that there is a right answer but i think there are two ways that that decoupling to protect American Health, security and economy, could be imposed by the president. One, really high tariffs on any drug that comes in, they use chinese apr. The second, would be to invoke the International Emergency economic powers act. The president has the authority to declare an unusual and extraordinary threat to the National Security Foreign Policy or economy of the United States. That originates outside of the United States. The president has the authority to say, were decoupling. Give me, you are all involved more or los in looking at the industrial side. What would that do to companies. How long do you think it would take, if you looked three months from the day that order was given, six months and nine months, would they go and how would they reinstitute supply chains . I think one of the challenges for companies so if you take Drug Companies that are reliant on api, and their api manufacturers that they are buying from our all listed in their for a master files, with the fda. If you have to get a change of supplier approved by the fda, you cant just change where you are procuring, it has to be approved by the fda. Will thats a regulation, congress or the executive, we could be having a lot. Any of us. But wouldnt you want the fda to be inspecting those api providers because that is exactly what happened in heffron cart prices is that a provider of api, was not inspected by the fda because of a glitch and over 81 americans were killed. By adulterated heparin. Im second question im struggling with how hard trying to put the toothpaste back in the tube. We have to ask the right question to get the right answer. The right question is perhaps broader than this hearing is designed for. Did we properly gate how certain is that historys that stood up in china. And to some extent, shame on us. For not paying more attention to something as critical as referred to earlier as a National Security issue. Assuming aslan political orthodoxy for a long time that industries somehow self regulate themselves. There is a role here for a strong fda. Especially perhaps a different version of the fda, what is been required to enforce fda principles across and other countries border. As a non trivial matters. So perhaps, that suggest to us today that we have a very and comfortable question which you just asked which is what we do now question mark my answer to your question is that would be a really good time to be in the indian pharmaceutical business because more or los, whats going to happen is a bunch of precursor plants would get stood up in india, probably in about 30 days. I think the. Is made about other orders that could potentially get cut. To bring these new supply Chains Online and then in turn supply americans. I dont think we should have any reasonably those wouldnt lead to even more serious Patient Safety issues. Commissioner. What im trying to do is to determine what we can authoritatively, not the date we are the final authority is commission but what we can say in this report of the high confidence level. In her testimony, she wrote a book and i think this sums up your conclusion. It is the second paragraph in the testimony. Your investigation revealed endemic fraud and in dire conditions, and an industry where companies routinely falsify data and circumvent principles of safe manufacturing. Thats your conclusion. The rest of you on the panel, would you agree or disagree with that would you say it may be true but i dont know. I would like to see how much agreement we have a basic factual conclusion. Yes no or i dont know. I would say agree with the statement the characterization is the problem, i agree that it needs the attention of the us the digit. I agree with every recommendation that was made in the initial period twomac nobody has to answer but a yes no or i dont know. Im not qualified to say. From my own examination of the chinese history of regulating pharmaceutical products, i believe that is indeed systematic issue. An actual reason for reasons beyond the regulatory control and meanness is Political Economic reasons. There behind that we havent elaborated on. In the meantime, we also need to recognize that not just we are caring about the safety issues, actually the Chinese Government has also reason to be concerned about the safety of their products as well. Right, i think you made a. And i think everybody would agree with that that they do care about their own reputation. Amongst the Chinese People, one of you all are different with this is it big motivator forum because the Chinese People expect the government to deliver on this. So thats motivating them. Im just saying that im done in my second round. I note see why anybody should be shocked that this was found is true. We have a system where there are tremendous incentives not to worry about safety. It generates externalities are costs that are never brought home to the people generating. These Companies Never pay any price for this. So yes, of course under the circumstances they do have a liability system. In 90 minute commonlaw liability system. Eat here even if there were no fda, people are doing this eventually. Commissioner goodwin or some other good litigator would get a hold of them and they would pay a price. I dont see why anybody should be uncomfortable concluding what is obviously going to happen when you set the system up like this. Im testifying now. Go ahead. [laughter] tmac i just want to add from my testimony that i submitted, the fda investigators really do believe that these companies have figured out how to gain our system down to the issue of drug shortages. Because they know that if even if their cost cuts committing fraud, they know if theyre making drugs in short supply, its going to function essentially like to get out of jail card and the fda is not going to restrict the stumps and they can continue to sort of with an income flow there. They specifically feel that they are choosing to make drugs in short supply to protect the bottom line. How big are the barriers to entry question were bright. Because of the market opens up, how quickly can some video set up shop in compliance and you implied that in india or a lowcost country like that, this could be done quickly. On the api front for sure. Sf play chain supply. This white paper circulated in india that more or los pointed out that did you know that all of the indian pharmaceutical industry is more or los captive to apis coming from china. That was a nontrivial moment of truth for the amiss indian pharmaceutical sector. Im going to raise a politically sensitive topic without trying to be political sensitive. [laughter] the aca. What if we were to have a requirement that the only way an Insurance Company could reimburse you is if the products, the apis et cetera all came from regulated or inspected facilities. It seems to me that the Insurance Companies have every interest in getting you to use generics, formulas that they try to move the office quickly as they can. Because this is where all the money is in the system. If they know that they are required to only allow their patients to buy inspected products. It seems we drive the Inspection System. China will do what it should be doing, because it wants to continue to sell. India will build up its capacity or we will. Im not trying to get into the question of where these products should come from, rather they should come from regulated inspected facilities. Do any of you have a view. I like to say everything we are talking about today, is the regulated system. Every plant that i mentioned, everything, its all subject to fda regulation. So this is supposedly, the regulated dance of life which is why it is so worrying. But if you were to require a greater inspections on a regular basis, some kind of inspection protocol, for those. They are required. Under it if they are required. Im sorry is the generic drug user act. Under that they are required to achieve parity, foreign inspection must have parity with us inspections. Partly to achieve the ust to have the us inspections to achieve parity. But all of the plans we are talking about are supposed to be inspected roughly every two years. So what you are describing to me is maybe a could do for, if im produce pronouncing it correctly, reviewed by congress to make sure that flowing through the inspections are happening. On a regular basis without diplomatic. [inaudible conversation] just to be clear, the inspectors are to be happening. Over talk about is the quality. Certain protocols about what a good inspection which is unannounced, on x basis, by individuals who actually speak the language in a number of things. We have the existing mechanism you are saying, its a question of improving it in some way. Overhauling the fdas Foreign Inspection Program and making it los credulous and los honor based and making it rigorous and making sure that the standards are verifiable. Yes. To act you think china would have a problem with that question of. You know, i think im not enough of a china expert to say but they certainly want into our market and i think they do have a political and image problem at home about appearing to be effectively regulating things. Some of the fda investigator said i interviewed for my book, they found chinese regulators more cooperative than the indian regulators. I would encourage the Commission Recommendation congress that leaning in on this area about enforcement. If something where chinas domestic ambitions in terms of securing public safety, as domestic Economic Development ambitions and also its role in being part of the Global Supply chain, all alondra in the same virtuous way. I think is the case with many of the conversations were having with china right now, theres probably a bit of nuance is needed to approach this in the right way and i would encourage a commission to say to congress this is something we can be much more declarative and definitive about in terms of what we want. Its hard when she reject the word nuance but [laughter] essay away from that. Ms. Bartholomew. Thank you. So many things. On this note Rosemary Gibson earlier talked about is a new rareearth. We have to remember as we hear about when the chinese are the only producers of something, that their ability to use this things has leverage is something we need to have be concerned about. I have two questions. One dr. One, you talked about the chinese industry relying on us innovation. I wondered there, what specifically you were meeting and then, is the chinese industry sort of monetizing the r d that is being done here in the United States question mark on innovation in the sector. Either by buying it or by selling it or by sending graduate students over who are replicating peoples laps. Also the issue of hiring leading american scientists. The different categories of things but how are they trying to get access to our innovations because again, if this industry follows a pattern of other industries, we will be displaced even in our own innovation. Thank you for the questions. I think now the us the leader, on the high tech, pharmaceutical industry. Look at the number of innovative original drugs. That are developed. Clearly the us is the leader in the field china is obviously wants to improve their competitiveness of the pharmaceutical industry. In 2025, identified medicine is one of the top things are industry for the government to know about. They clearly have the ambitions to be a leader. But to what approach to use, the approaches to know and develop this pharmaceutical industry right. They certainly also play close attention to the development and the r d industry in the field. The specific measures they use, that is out of my knowledge. I think if you look at when i say the chinese are also relying on us in terms of ability to develop and deliver effective medicines. China hamza huge crises, hypertension, diabetes, cardiovascular disease, cancer, if you look at the cases, they are increasing significantly over the past year. There is a huge demand for this most effective pharmaceutical product. This can only be made by the National Multinational corporations and partially because those most effective for example and i cancer drugs. Until very recently, there only made by the big farmers. The chinese who produced, in 2011, like a common produced by the pharmaceutical firm but now we are on a new drug in the market, they have actually the revenue has dropped significantly. Then as an example that there shows that there is a feel of a very huge dependence on the us product. They feel very competitive, we dont want to underestimate or our resilience or capabilities of the leadership of our pharmaceutical industry when we talk about our dependence on the chinese drugs. Thank you. Do have time for one more yes no. Thirty seconds. Peoples individual Health Information, thats not a 32nd question or answer. For the record, i married into a family of hud farmers. Theyre going to be very excited to know that the hogs are the new rare. Data is the new oil as they say. The only question i have, is how aware is the top chinese leadership aware of what you have been telling us today . My understanding is that it is in the fda over in china did do a series of workshops with the industry and with government officials to try to talk to them about data integrity issues, and what these sort of good manufacturing practice standards are. I should also add i have been made an offer for publication on my book in china so if theyre not aware of it now, maybe they will be. This is, if i make, this is an intensely political issue. The quality of drugs and quality of healthcare in china and from the premier down, there is a mandate to improve quality and improve safety and improve efficacy. As recently as two months ago, the premier, himself spoke about the demand of the Chinese People were quality healthcare. Also education and environment. And food. So this is something the chinese leadership is intently focused on. And wishing to improve. When they find out, with the do anything to the companies that are violating for their doing. So there are many types of problems. The fda or the chinese regulators face. Corruption is one, their ability to get out to the factories is another one. The subcontracting is a third type of problem. I would note to you however, at least on the corruption side, that if chinese regulators of pharmaceuticals are found to be corrupt, its a bullet in the head. As punishment. Its very severe. That is indicative of the importance to which the Chinese Government looks at this issue. That is not resolve the problems yet. I think it is probably inaccurate to suggest that the officials responsible for safety and efficacy are not trying to address this issue. To have anything to add that . No just the bullet in the head metaphor is perhaps overly apt in this case. This has the highest degree of scandal. This has the highest priority and highest attention that the Chinese Government has the highest of levels. We heard before that when the Chinese Companies violate and nothing being done about them. I would not, i think again that the way i would look at the enforcement of a violation is that unfortunately, that the higher visibility, the more direct the Chinese Government is involved but broadly speaking, the government is trying to do what it can to crack down on these and does kill the occasional monkey to make a lesson for the chickens. Commissioner cleveland. This morning, let me start by saying that the idea that we would shift any factoring of production from china to india causes me as much because as leaving the system in place in china because during my tenure at the bank, we had a series of horrific scandals. They involved the bank financi financing, the production of false testing kits that produced significant risk and harm in india. Globalizing Safety Standards is probably the better approach rather than making assumptions about shifting from china to india. I was really interested in your discussion about phi. This morning when estate say, there is concern about the possibility of the risk of Health Information being used to target specific americans and you know that sort of in the category of Science Fiction. I think it be interested in your comments about the risk. What data do the chinese probably have access to and how are they using it . In particular, i am interested in your followup discussion on use of ai and the healthcare sector. The layout for us what you see is the data they are after. How they may be using it and what we do not have access to. In a symmetrical way. You know the identification is a critical issue. Do you really believe that they are going to be willing to engage in that kind of article discussion and then how will they use ai in syria question mark. Has a lot of questions. Let me see if i can do them justice. We start with the higher order question which is what is the objective of the data accessible. I would argue that something is just to hunt for data. Because data in wretches what an Artificial Intelligence system can do, whether were talking about biology, or Machine Vision for tumor mythology, is a hunt for data. China as this commission zero well, hamza history of doing things in a really big scale. Questions about quality, are always good to keep in mind. So china might very well spent 16 billion on ai, as they plan to do but the question of the quality of that investment needs to be asked and answered. So i think the objective with the data, i would assume that that should be understood largely between Economic Development prison. The desire to stand up new industry in china where they can have a sustainable competitive advantage. With that being said china has other inherent advantages with Artificial Intelligence that are worth knowing in those predicate steps that will that you build not just capture the data where they perhaps have the advantage but the annotation and the labeling that allows you to build the system or the models in question. But that is interesting apparently that is a high labor content. That is another aspect that chinas investment has some advantages that we dont have in the United States. So that starts to draw the attention what are the risks and opportunities we should be thinking about as it relates to other High Technology sectors. That we owe it to ourselves and our multinational corporations to make sure we are thinking about data access. And to maybe reduce that to a vernacular that dc is familiar with and not view china as a developing nation and the space. There capabilities are on par with ours or better. We need to set the legacy way to set it aside to look at them in a healthy competitor to inform all companies on both sides leading to new good Economic Development opportunities that are therapeutic maybe on the last question some of the fears i have heard over the last panel that i served there was a question as to whether or not china would have the ability to design the perfect bio weapon i want to encourage to see that as Science Fiction and not science fact the much bigger principle this commission should Pay Attention to is whether or not the access policies are leading to disadvantages to american entrepreneurs and researchers and whether or not we are making the systemic investments for the development of these initiatives and data sets leading to the 21st century economy. How do you do that . Talking about the barriers in place and the requirements on the chinese side that it has to be a chinese entity or chinese institution. What are the concrete steps you would recommend to assure data quick. We need to align how phi is handled and that is a very simple answer. But thats a hard thing to do. There are competing standards china has one if you interpret through a couple of policies. The United States leans heavily on the safe harbor act and hipaa and those 18 identifiers that if they have all of those it is considered store data and not properly identified so globally align we need to be on the standard to have phi all across the borders that would likely lead to a conversation of a global norm of identification in general and its fair to say that the United States has a lax view on what constitutes weather data is identified and what you do at that date data and ship it outside the borders. Scifi today may not be scifi tomorrow. Weve heard some pretty interesting things over those 18 years of this commission has been in business including teleportation, quantum computing leaps and a number of other things that just a couple of years ago were viewed as scifi but seem to be on the horizon. Number two, there is a concern i think we have already seen targeting of dissidents of those from the chinese leadership view is a risk to the country and that dna for family members and others but i dont think we should diminish the potential threats that are out there and we always need to be willing to discuss them to make sure they are just in the future and not within our grasp. If i could i have three linked questions out just to see because i have no idea. But first the European Countries seem to have the same problem we do coming out of china. Second, how do they approach and what they learn from them quicksand the third that it seems to me if we share the same problem then what is the possibility of a coalition . If that is developing other suppliers, or to resolve with china . [laughter] so the carcinogen that was detected in the generic drug was actually first flagged by european regulators. The us fda did not catch at the europeans did. The one thing that the europeans do that we dont do is routine surveillance testing of all drugs coming in through their ports. And there is quite a bit of supply that the fda is not engaged in with routine surveillance testing. That is number one. Number two, there has long been discussion of having global treaties on pharmaceutical quality to which it is signatory in the model is the Aviation Industry and that is sorely lacking. That is something that various countries have worked on but it hasnt really happened yet. One of the ways that countries cooperate in this space is through mutual recognition which is to say european regulators if you inspect the plant what you find you share it with me and that is good enough for me but of course recently we signed a mutual recognition agreement with europe but the problem with that is then you have regulators from the Baltic States who are not nearly as wellequipped to detect things hours our own regulators to give us the okay that we have not seen but there is no question there could be a global regulatory approach and maybe you could do that with the unannounced inspections to say that will be a global standard. It strikes me that it could be the Intelligence Community and then the hell with the rest of you. [laughter] up for your next diplomatic post. Too much rocket fuel. The title of the panels us china risk and opportunities and we spent a fair amount of time talking about risks and you inserted a sentence at the very end of your answer to the last question of the opportunities for American Pharmaceutical Companies in china. What are you hearing quick. Thank you for the opportunity. China 20 percent of the worlds population facing a terrible demographic especially exacerbated by the one child policy and their demand for highquality pharmaceutical is growing very rapidly well above Global Growth rates. We have done very well in that market and we will continue to do well with that bilateral relationship remaining stable. It is a matter of fact that chinese patients can obtain pharmaceuticals will prefer them and this offers a tremendous opportunity. Moreover it is a matter of fact that a large percentage of Global Engineers to contribute in this industry are coming from china that are chinese and innovating in the future as our companies that wish to work with them and grow global businesses with them. It is a fact our pharmaceutical industries are integrated and synergistic and interdependent and to the future of American Pharmacy to some extent is predicated on the ability to serve chinese customers and sell into that market. Anything that reduces our ability to take advantage of a very large pharmaceutical market will have the unintended consequence of the productivity and competitiveness and pharmaceutical firms. So we should be very careful as we regulate as to avoid unnecessary negative and unintended negative consequence consequences. Found those cassette carcinogens. Which country was it quick. I think it was the overall eu regulator. You said we do not do the inspections. We dont do surveillance testing of drugs coming into our ports. Would you recommend we do that quick. Yes. With the pharmaceutical industry oppose that . Sure. [laughter] thank you. We have come to the end of the day we are appreciative of all of our one all of your time and your participation and your testimony. Thank you for a great job putting this together so thank you to our staff we are adjourned through september 4th. Thank you. [inaudible conversations] [inaudible conversations] the question is where do i stand on the impeachment of down on donald trump . I came out in favor of impeaching donald trump. [applause] because no american especially not a democratically elected president is above the rule of law. [applause] i made a video about this i was one of the first to come out on this people said this might be risky may not get reelected im here to do what is right there is evidence he broke the law its in the Mueller Report so now the question asks he must be defeated in the ballot box november 2020 absolutely we dont know what the senate will do on the legislative agenda i go into every one of those hearings fully prepared i am more than capable to make sure donald trump is being held accountable at the same time im doing the hard work on healthcare and gun violence and Affordable Housing and all of the challenges we are facing. And in the spirit of compromise. Thomas jefferson question the need of a senate. The framers established the senate to protect people and as a check on the house. With congress and the United States senate. Conflict and compromise using original interviews the Video Archives having unique access to the senate chamber
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