If there’s one thing the Trump administration understands, it’s that foreign affairs is about a lot more than guns and planes. The America First agenda relies heavily on economics to project U.S. power through tariffs, partnerships with global corporations, and customized trade deals with other nations.
This strategy has been especially effective in outflanking China, which has barreled its way to the top of the economic food chain in recent decades. That’s why it’s important that the administration understands that its new agreement with Pfizer may end up hurting the America First agenda and empower China as it nips at our heels in drug manufacturing.
The partnership includes domestic manufacturing and consumer assistance pledges from Pfizer as well as a proposed website for direct consumer access to generic drugs. While the website details won’t be known until 2026, it already joins Mark Cuban’s Cost Plus Drug Company and Amazon RXPass as the best-known brands that are capitalizing upon patients’ desire to find lower costs without sacrificing their health or time.
Every direct-to-consumer company proclaims some combination of lower costs, convenience, and/or no insurance required. But generic drugs make up only 12% of all drug spending, and the ones provided by DTC companies include few or none of the most important (and expensive) specialty drugs. Cancer patients, for example, need cost savings the most, but they won’t find their life-saving medications online.
This means that no matter how many drugs are purchased from the proposed Trump/Pfizer website, it won’t make much of an impact on China. And that’s a shame, because according to a new report by economist Vance Ginn, the nation handles 30% of the world’s manufacturing - not far behind America’s 35%, itself a drop from 39% since 2009.
And despite being a global opponent, China plays a key role in our domestic drug development and use. Researcher Camm Epstein, citing multiple sources, recently noted that 40% of all prescriptions in the U.S. come from India. The latter relies on China for “about two-thirds of the active pharmaceutical ingredients…needed to produce those drugs,” according to Epstein.
Got it? We’re relying on our greatest geopolitical rival to stay healthy – the same country that created and lied about a global pandemic, and sent a spy balloon across much of the country shortly thereafter.
It’s not a far cry to wonder what would happen to our military servicemembers and civilian workforce if we were in a cold or hot war with China. China’s leaders could easily decide to pull its manufacturing inward, causing shortfalls of critical drugs that could harm millions of people.
Talking about drug manufacturing from a national security perspective may sound farfetched, but economics often matter far more to international affairs than headline-grabbing military action or diplomacy. The economics of slavery caused the U.S. Civil War, America’s oil embargo led to Japan’s attack on Pearl Harbor, and the First Gulf War was launched because Saddam Hussein’s Iraqi military invaded America’s oil-laden ally Kuwait.
It is incumbent upon America to become independent of China’s economic influence related to many areas of manufacturing, such as automobiles, batteries, and iPhones. That’s why drug manufacturing should be part of all of President Trump’s tariff and trade negotiations. Improving supply chains with regional and global partners will strengthen alliances, weaken China, and keep our nation healthy and strong should conflict break out.
However, freeing America from China’s grip won’t be easy - Epstein’s report lays out how China systematically became a dominant world player in the drug manufacturing space. Interestingly, he and Ginn differ significantly on solutions – the latter advocates for reduced regulations to spur innovation and domestic production, while Epstein takes a national security approach that includes tax and purchase incentives as well as targeted tariffs.
But either approach would be better than focusing on the paltry percentage of drugs that are generic. It makes for a good headline for the administration, but it won’t do much good for keeping prices down domestically – and it might distract us from real solutions to reduce dependency on China.
Irene Watkins was a policy analyst for The Heritage Foundation and the U.S. Department of Defense, with a specialty in understanding global power positioning.