we had these dramatic dislocations that have huge impact on our economy. the final point is we have to decide as a country, you would want to have an industry like pharmaceuticals here in the united states? do we want to have it? do we want to maintain that manufacturing capability? if the answer is no, then we are good to go, just let things happen. but if our answer is yes, then what do we need to do differently? that is what we hope that "china

rx" can stimulate the conversation about. >> patrick? >> let me read something from the book. pharmaceutical manufacturing plants are among the 70,000 u.s. plants that have shut their doors since china joined the wto in 2001. there's been a tremendous outsourcing of u.s. productive capabilities. everybody says we will be the innovators and let them do the lower. when you are not making things, you are not going be the innovators. they will be the innovators. we say we are getting -- you are not going to get cheaper drugs if they are the supplier. if they're going to be in a monopoly position. we are on a hazardous road in this country, and i think the

american people, i think they are waking up that we have huge problem. i could keep going on. >> that's why i like this issue, because can identify with steel, autos and aluminum but we get a didn't buy the built we put in her mouth and think we rely on to take care of our infections. >> but like you said you need those other things, devices and all kinds of healthcare is to been on those things, too. you know, in talking through these issues of kind of the intersection between kind of the rules of the road for trade, and then the things you describe to us about how china is actually capturing these markets. i'm having trouble kind of squaring the circle here. it doesn't make sense to me that this has been possible given the

kinds of what i thought were ability to kind of use the trading regime to enforce that people follow certain rules. >> unfortunately, the rules were set up on the debbie to go on the basis that everybody was going to follow the rules, and the chinese chose they only follow rules that benefit them. and the mechanism is so slow and so difficult to enforce that it's ineffective. and in addition to that you have to accompany that complains an american companies are so intimidated by the chinese that we can't even get them to file the complaint, okay? and so if the import an

automobile into the united states, the tariff is 2.5%. if we import an automobile into china the care is 25%. and the tariff auto parts is 25%. how does that make -- why are we not complaining? because we can't get out of companies, they are so intimidated by the chinese government -- >> the companies have standing. i as a public health bush would not have standing about -- >> use code has to bring the case in the wto by jeff to provide the government with the information to bring your case. if they are hesitant because the chinese will punish them with operations in china, if they provide the government with the information, you'll see many of these companies won't even testify. they will have a trade group testify so they are not identified both before the china

commission and in the congress. i worked in the senate banking committee for 15 years. i've seen this up close. boeing, i remember we would wonder when boeing makes a sale to china, china says you have to make a part of the plane here in china in order to sell to do. we used to think, why is that? we put something in the debbie keough you can't do that. chinese complete ignore this and they say we are not forcing her companies. they are doing it on their own. of course they're doing it on their own, one, they make their shareholders wealthy. a very short-term problem and state that for the united states long-term. >> maybe have each of you comment on what might be some thoughtful paths forward, they be starting with dan and patrick and let you finish, rosemary.

but think constructively because it seems that we've gone down a path that isn't leading us out of this. >> okay. you have the united states that is process oriented. we have a constitution, we sign treaties. for the most part we follow them. then you have a country, china, which the end justifies the means, stealing, lying, cheating, anything else is encouraged and fostered by the chinese government. so you have these two desperately different systems that can't blend together. and so i think the only, we are the only industrialized country in the world that does not have an industrial policy. germany, canada, japan, china,

everybody else has an industrial policy. and what we have to do is if we don't start to subsidize our advanced manufacturing industries, we will cede that whole industry to china, okay? and they have completely wiped out the opto electronics industry, the entire industry has moved to china. lasers, sensors, digital, all the stuff of the future is now in china. they are in the process of moving the entire semiconductor industry from the united states to china. having all of our chips made in china, imagine. the white house called this and asked us to look and company called global foundries inc. santa clara california and there were moving to china. i called the president of the company up. he said to me, the chinese offered us free use of a

$4 billion chip manufacturing plant, no taxes for ten years. they will train all of our workers, and it went on and on and on. he said i didn't even know who to talk to in the u.s. government. i said, well, it wouldn't have made any difference because nobody would've done anything for you. and he said to become what would you do if you were me? and, of course, the incentives are so great that were moving to china. they are doing this for all these critical -- and less of the u.s. government starts to incentivize these companies to stay here, now, we had, there's a lot of problems with the tax bill, but we had to get our corporate income tax down to everybody else was paying. that was a problem. the corporate income tax in china is 15%, higher limit is

12. the united states was 35, wasn't it? >> thirty-three. >> we were way out of whack so that was a good first step. but there's lots of things that the u.s. government can do to incentivize these companies to stay here. we actually were incentivizing them to move. because if you, a prophet that a company made was not subject to u.s. corporate income taxes unless they repatriated the money. so they would just leave the money over there, continue to build other factories. the answer to come i think, to the drug problem with talking better today is that the united states has to incentivize drug companies to manufacture here, and that's a function of providing them with the r&d facilities in the software industry, in the semiconductor industry one of the biggest problem is they can't find

enough electrical engineers. they have plenty of electrical engineers in china. so when i talked to intel, one thing u.s. government could do is to say we will pay your tuition, anybody who studies electrical engineering and a state university in the united states, we will reimburse your tuition if you graduate and stay here and work. it's things like that the we need to do, otherwise, we are going to lose -- imagine, artificial intelligence, robotics, supercomputing and the other thing that we're doing -- >> electronic dollar bills as one of their -- >> yes, the other thing that we are doing is supercomputing is the basis for innovation in the united states for advanced technology, okay? it is critical, and the united states opened up the first

supercomputing station at lawrence livermore laboratory in california in 1946. up until a few years ago the united states led the world in supercomputing. about two years ago the chinese exceeded the united states and supercomputing. and now the gap is getting wider. what does congress to? they cut the budget of large -- is like eating your seed corn. this is the insanity. that's what i say i have met the enemy and it's not china, okay? we do all of these crazy things that just harm us. for 150 150 years we didn't hao do anything. we didn't have to have an industrial policy because we dominated the world from an economic point of view, but those days are over. if we don't do anything we are going to lose all of these critical industries. >> here's what i think. warren buffett wrote a famous

article in "fortune" magazine saying the trade deficit is going to sell the country out from underneath us. that was the name of the article. he said when you're running massive trade deficits using other guys dollars. they can go back and buy your industries. that's what's happening now. president kennedy did not know how to get a man to the moon. he set a national coal because he thought those in america's interest. congress but onto it and we figured out to get a man to the moon. to me the best thing to turn out to be a safe were going to set a national coal and balance our trade. we'll figure out how to do it. part of it is with governance reform, key part. part of it is providing these incentives that they had this talk about for our own children. not all the foreign students to getting science and technology education of the treaty. and three, the corporate tax bill.

i would've done it differently. i wouldn't sit if you are an american company and to produce in the united states will give you a very low tax. if you're going to do on your production in china, ship it back to come will have different tax rate for you because we want to incentivize production and jobs in the united states of america. there's lot of ways to do this but you got to set a goal. once you set the goal then we can fear how to do it. >> the other thing, and i'll stop after this, is what's really hurting this country are buybacks. buybacks are where corporations buy their stock. up until, ronald reagan changed, there was a securities law that prohibited corporations are doing that because it artificially inflated their stock. raking change that, and today in the first three months of this year tens of billions of dollars of stock had been brought back by corporations. that means that instead of those revenues being used to grow the

company or to put into r&d, it's going back to the major stockholders are usually the president and chief executives and some hedge funds. it hurts the economy and arts the country. that's another law that we need to put into place to stop stock buybacks. that money should be used to grow companies, not to be enriching ceos. >> have you guys been thinking about how confuse our priorities are? you talk about china subsidizing the manufacture of things like drugs and semiconductors and we subsidize sugar, and it's very sad. that's very said. rosemary, i'm going to give it to you to talk to us about the path forward, the last word. >> the reason i wrote "china rx" from a mother and father could read it was because i think we

have to bring in what i call the common sense of norms of ordinary people. if you look at the meeting today there's more stories about the dangers of getting your drugs from canada then there are stories about the reality of what's happening to our drug supply. this this is a story that has bn hidden in plain sight that frankly they don't want us to know. and so i think we are to draw in and expand the conversation to know that the people who come to washington in the inner circle of relatively small group of people for making the policies that have created the situation that we have now from corporations and government, and it's not working for ordinary people. and so i hope with this book we can expand the conversation with people who know that something is not right. what he said that. the american public knows there's just something not right, , but to not being educad because we frankly have had a news blackout. you can't get this topic on the

nightly news and a lot of mainstream media. and so how can we find alternative news sources across the spectrum? this is not a democrat or republican issue. this affects all of us. and so that's what we intend to do for the next number of months, and if there are places where you have it in your work and in other parts of your life where we can have this conversation, please let us know. that's the intent. were going to start something here. we had been so impressed, within two weeks, how ordinary people and people in the industry who can't speak publicly but they know we have a serious problem. they are caught. they are good people in pharma companies who don't like the fact there's a plant with your company name on it with the bathroom is a hole in the floor. i can imagine there's any person who likes that situation. so i can we draw on those people in the commonsense norms of the public and change the conversation and inform the people, and informed people can do the right thing.

>> all right. >> thank you. >> thank you very much. thank you all. >> thank you. [applause] >> we have a couple of minutes if we have any questions from audience. there are a couple of my fax that here in the aisle. i see somebody coming forward. if you don't mind, introduce yourself. hello. [inaudible] >> patrick mentioned section 301 case that was brought by the office of u.s. trade representative and in the much-anticipated move of 45 pages of proposed tariffs were released, they included a lot of chemicals, pharmaceuticals. what if you all it seemed a list of whether that, you know, do what you antennae, to incentivize production or have a perverse effect of, you know,

more production in china? >> my understanding of what 301 is being used is to focus on the industry that china has put in the project 2025, that will be there high-tech industries as dan has talked about which ones they are. but among them is biotechnology. and so if you put tariffs on those industries, one, you have industries chinese is given to the industry. secondly, you make the more expensive for those goods coming to the united states and wiping out our people who might want to be making those kinds so we have a chance to move up the food chain and have those kinds of products being developed here. my understanding is that's what ustr is trying to focus on in

their 301 on the project 2025. >> next question? >> building off of that, my name is isabel and i went inside your street. it sounds like terrorists are not the answer here to reducing the u.s. dependence on these pharmaceutical sectors and critical minerals used in these products. what other congressional solutions do you think are available aside from occluding incentives in the tax bill? are there any sort of congressional -- you mentioned putting pressure on congress to solve this, and what are some ways in doing that aside from the tax bill? >> are you speaking to me? >> anybody. >> go ahead. >> i think that one thing congress can do is, it is clear that certain drugs are critical to the national security of the united states, and those drugs

must be, certain amount of them must be made here. let's say penicillin, okay? we can't be 100% dependent upon china for our penicillin. so one thing that congress can do is identify the critical drugs and require them to be made here. maybe the issue some kind of subsidies, incented or whatever they want to do, but that would protect us from any adversarial action that china may want to take next year or five years from now. >> i'll jump in while you're thinking. in the case of heparin that are researchers who are making progress in coming with a synthetic heparin so don't have to rely on pigs and china for it. it. but the incentive to turn that synthetic product into a market drug are not good because currently heparin is still very cheap. so the market isn't a line to

want to buy a more expensive product, but public investment that is very targeted and strategic unessential medicine, we we need to think about public investments in that research and bring a product like that to market that will preserve and protect us from dislocations and interruptions and supply. >> for pandemic preparedness we have a strategic national stockpile, and the government stockpiles certain products, not just drugs, but other products, you know, all kinds of things to be there in case of a major pandemic. so it's not a foreign concept of a national interest in having the visibility of certain drugs. i should see also indicates of the heparin, what really happened beverly shutdown our manufacture of heparin was when there was the problem so-called -- in the cattle in the uk.

it was felt to be sensible to stop using cows to make heparin. from account you got a lot more heparin, and that was how we manufactured it ourselves. when they thought -- it shifted to china to be done with the pigs, which is to say if we had a better way and people have been working on this to monitor to detect the low levels and cattle you could see that was safe and it would be a way that was more efficient for us to manufacture it. it's not efficient to manufacture it out of pigs. it's not fun in my field, yet do talk about things like this which is not a pretty picture. >> let me comment one more thing. as i said i was on the senate banking committee we did the 88

trade bill. that's 38 years ago. when senator byrd and i think jim wright was house speaker, they charged each committee to look at areas under their jurisdiction, give hints and develop ideas make the list more competitive. we haven't done it in 30 years. i think congress needs to get into this business, do the hearings and develop the different provisions of law that can help us compete better in a global economy. in the 88 trade bill we covered exchange rate for the first time. we put cfius which been referred to here. a lot of great things that were in that bill but in 30 years the debbie deal wasn't even in existence. china was in the wto. we really need to update the whole competitive strategy in the united states. you have to do it for the congress. >> take two more questions starting with this gentleman. [inaudible] >> rosemary, you mentioned

pharmaceutical, strategic. as one if you could elaborate, should we have strategic reserve or key medicine but without list look like? >> this was brought up. i think would be really desirous to identify a group of public health experts, physicians and is identify what is the list of essential medicine that we need to have. to the point we should not be allowing other countries to produce in such a substantial share of the market. so that would be a first step. and at physicians and those who use of these products can by the way most physicians have no clue about the situation that we're in. so that would be the first step. the experts identify one of those products that we need. the question can we stockpile,, how much can stockpile? by justin is they are more discreet -- >> i wasn't meaning this

stockpile. you you'd want to be contingency manufacturing to have capacity. >> absolutely. there's another point here. there's new technology that is appropriate for the manufacturers of some medicines called continuous manufacturing. there hasn't been that much advances in the manufacture medicines. it hasn't taking advantage of new technologies. another role, how can congress and the federal government incentivize companies to advance in its making of drugs question there some products you can make within 24 hours, it was a technology developed at mit and was founded by european company, not a u.s. company but that technology is there. there is prefabricated drug plans that china is buying from general electric. how come china is buying it? why are we not find it here? so incentive to upgrade our pharmaceutical manufacturer is another step in the right direction.

>> i'm from kaiser health news and my question is rosemary. we have been hearing for a while that 40% of finish drug products and 80% of aei's are made in foreign countries. but that number is from 2009. the fda hasn't updated it since, between fat and the lax labeling laws that says your drug only has to say where it is manufactured or who labeled it or where it was distributed. how are you able to figure out that the number of pharmaceuticals made in china was indeed growing? >> that's a great question. the numbers that are out there are old. i think they obfuscate, and where our data points came from is from people at work in the industry, who have come out and, frankly, talk turkey about how, in fact, dependent that we are. and we don't have good official numbers. have to ask the question, why

not? the obfuscation, 80% of our active in crete is come two countries, they don't want to split up india and china. what they also don't want to do is split up the active ingredients from the raw materials. and so india may be making the active ingredient but it may be dependent on china for the raw material. they don't into that level of detail to really pin point the amount of dependence that we really have. so to answer your question, our data point in from interviewing people in the field who said that if china shut the door, within months we would have to shut down our hospitals and/or pharmacy shelves would be there. you can't get better than that. and, frankly, we should have the answer to the information. we need to know who is making our drugs, what our supply and demand. we need to do risk assessment by country, by plant. we don't do that. at least in the public interest. this commercial database, but we don't have this in the public

interest and it's nobody's job in the federal government to do that. that's stunning. we would allow them for food. wouldn't allow it for oil and energy supplies, but we allow for medicine. there's lots of reasons. there's a lot of people don't want us to get into this under the terms of it is proprietary trade secrets. national security should take precedence over that. we've got to open up that they can of worms, shine a light on it with 180-degree summit. >> waitressing is interesting,, but that is it is actually a quite complicated industry, that the unrwa chemicals that are specially chemicals that are then used to make the active, that are then formulated. i think what we see on these containers is where they were actually packaged can which is the last step. you don't really have a way of understanding where those ingredients were before they

were actually packaged into that final product. >> there's actually conflicting laws. there's custom laws that requires companies to put on the packaging the country of origin which is defined as where the active ingredient come from. when it comes in the country, just a label or the active in food comes from. we have information exists somewhere, and we don't use it very well. i don't how many people actually know it. then there are fda rules and they allow a wild west. it could be the packager -- >> it's the retail package is different from than spitting than the customs package come in. >> it's a complicated system. >> correct. >> could i raise the question -- >> there's a tip in united states we can see the label of the medicine. edit some cases those labels

indicate who is the manufacturer, where it was manufactured and in some cases even the active ingredient. if you can't find that out from the label, then you can try to call if your company, and some compass will tell you. others will not. it's worth a try. >> how much of this this is tha no? given that haven't put out a new breakdown about that come to the fda know what all these things are made? did the keep it in a locked up place? >> they know, they know. the question is why can they tell us? >> i have a question. when i was first on the china commission one of the things we found out was like walmart, we count american companies, if you want to stay in our supply chain, you better move to china and meet the lower costs. are the drugstores like cvs, are they pressuring the american

companies, like pfizer at and others, to move their operations to china in order to stay in their supply chain? how does this work? do you have a fix on that? >> i do have an edge do that but what i do here is there's a real hammering down on manufacturers, we can't underestimate what it takes to run a high-quality manufacturing facility. there's perhaps a lack of specific vocation or perhaps a dozen medical. >> of departments in companies want to make sure we get the lowest possible price. you have a challenge and then between quality and safety, and you often safety doesn't win out. this avoided the transparency on what this market looks like and who is pressuring whom because it is a complex. >> there should be congressional on something like this, shouldn't there? >> i would love for members of

congress to other courage to do that. >> again, i want to thank you all. thank our speakers and especially rosemary gibson, author of "china rx." thanks to all of you. disability and enlightening segment. -- this was really and enlightening segment. thank you. [applause] [inaudible conversations] >> booktv is on twitter and facebook and we want to hear from you. >> host: we are pleased to be joined here on our set on