the free radio app. be a part of the national conversation through c-span's daily washington journal program or through social media feed. c-span, greeted by private industry america's cable television company as a public service and brought to you today by your television provider. >> good afternoon. i'm lynn and i'm the dean of the book health and i'm delighted to have everyone join us today for this discussion. we have an author and incredibly important book here, rosemary gibson. her book explores the topic of a dramatic shift b in where our medicines come from. as china looks at the pharmacy of the world and many of us in the medical public health profession have been unaware of this shift. we may notice at times there are shortages that they are

contamination issues and other problems but i think we have not been aware that there has been this systematic issue, a major change in the system that manufacturing and deliver pharmaceuticals. the implications of one country controlling the supply of medicine is astounding, no matter what state we are talking about. think aboutng it. what if there is a global pandemic and it is hard tot' loe move products across the world. what if there are heightenedns tensions within the south china sea and everyone could be vulnerable and everyone could be put at risk. the role of the fda in this situation cannot be overstated because the fda cannot be effective in ensuring the safety of the medicines in the far-flung regions of the world as a can at home. many of us are not aware of the face to face contact that the

fda has with those who are manufacturing our drugs. the inspections that they conduct, they are very hands-on and involved a major that the manufacture of drug can stay safe. they have set up offices all over the world to do that but that is not the same as having offices or manufacturers in your own country. and with the u.s. losing manufacturing which is continuing to happen.s the situation could becomeo even me severe. the day we discussed these vertical issues as well as a possible solution and i look forward to very robust discussion. first, let me introduce to you rosemary gibson.nsns senior advisor at the 18th center in principal author of china rx exposing the risks of america's dependence of medicine in his recipient of the highest honor for the american medical

writers association in 2014 forgetting the public voice in their interest to critical health issues of the day. at george washington university they gave a 2015 lecture that we had annually here at the school of public health and at the robert wood johnson foundation rosemary was chief architect of h.its 250 millionon decade-long national strategy to establish inpatient collate of care programs that now number 1600. she received the lifetime achievement award from the american academy of hospice medicine and worked with the cbs documentary on our own terms. she is recipient of the lewis blackman patient safety award from the south: hospital association and rosemary is printable author of medicare milltown, 2014 battle over healthcare, treatment trap and known what her book has been

reviewed in the publishers weekly washington post and there is reference and proceeding that ine u.s. senate mentioned in congressional testimony noted in "the wall street journal" new york times usa today consumer report and other news outlets too numerous to count. rosemary [inaudible] a nonprofit distance organization headquartered in ann arbor, michigan but she graduated from georgetown university and has a masters degree from the london school of economics. please, join me in welcoming rosemary gibson. [applause] >> can i take over for now? is the microphone working well back there? wonderful. thank you, gentlemen and ladies. good afternoon everyone. doctor goldman, i want to thank you for making this event possible. it's a very timely and fitting that we are here at a school of

public health in the very preeminent school of public health in the nation's capital to discuss the public health applications as well as the national security risks associated with our dependence and growing dependence on a single country for our medicines. it is timely for another reason. the president is set to give a major speech in the coming days and weeks about drug prices and we know many americans are suffering under the burden of the high cost of medicines but we have to be mindful of unintended consequences, companies might feel pressure to reduce their prices and reduce their cost which could potentially drive more manufacturing to china. we will have to keep a close eye. there is one lesson we draw frot today it's the intersection of our medicine and trade. and our trade policy. who would have ever thought of that connector looking at leah binder who wrote a wonderful piece on the blog last week that

made this brilliant connection. it goes very deep. so i wrote china rx with the purpose of informing the public about this very big shift in where our medicines are coming from. for many of us going up our medicines were made here in the united states and maybe europe or japan but now there has been a dramatic shift eastward. i wrote it for my mother, so my mother could read it but also for policy wonks and academics. we all need access to this information. we want to trust the medicines that we take in those medicines that can mean the difference between life and death. we need to know where our medicines come from and why are we dependent increasingly on a single country, what are the risks and what can we do about it. i was going to bring my smart phone and my medicine bottle but

let's just make believe i have it here. one of t the questions i get asd the most is how come i didn't know about this. how come i did not note that there is growing dependence of the united states on china for so many of our medicines? if you take a look at your smart phone and you look on the back at least mine says designed in california, assembled in china. if you've ever gotten those amber colored bottles with the white plastic cap that tells you how to take your medicine, what that does is but does not tell you where it comes from. there is no reason that we should know. let me tell you about what this dramatic t shift in where our medicines come from looks like. why one of the first things that we've done ite we name the medicines that are being made in china by chinese companies and sold here in the united states in china rx. they include anabiotic's, antidepressants, birth control

pills, a lot of young women are interested to know that. medicines for alzheimer's and parkinson's, epilepsy. high blood pressure, hiv aids and much more. for right now china is just beginning to get into the manufacturing of generic drugs but it has a plan, as doctor goldman said, to become the pharmacy to the world. i predict that within decades, maybe less, maybe more china could overtake india as a dominant generic drug manufacturer. for right now china's biggest footprint in the united states is making the active ingredient in so many of our medicines but there is a part of our medicines that give us the therapeutic value and they make thousands of active ingredients for many of our medicines that we find in

our home medicine chests and in hospitals all over the country. many people that we spoke to both former government officials and from industries that if china shut the door on exports, within months, pharmacies shelves in the united states could be empty and hospitals would cease to function. so, how did we get here? what about other countries? one of the most interesting facts that i learned is that even india, which is a dominant generic drug manufacturer, even india is dependent on china for the active ingredients in raw materials. this is in many of the medicines it makes that for its own people but also for exports. there is a fascinating article in the economic times which is an india newspaper and it started out with a story of a

soldier on the border between india and china and they share a long border and there is lots of tension in that neighborhood and in that part of the world. and so, it's a something to the effect that imagine an indian soldier on the border and he opens up his medical pack and sees hisis medicine that he is running out. that soldier isrd dependent upon the people on the other side of the border, the adversary for the components to make essential medicine. that's a fascinating situation. the article went on to say this is the national security issue. i have yet to see an article here in the united states posing that question talking about that here. i applaud the indian media for being transparent about it. if there is any interruption in supply there were not only affect the health of their population and their military but would also affect a very important part of their economy because as you know they make an export many generic drugs.

were are we and what is the biggest risk. as doctor goldman said the biggest risk is when we have centralization or concentration of so much of our medicine within a single country, no matter what country that is. if there is a [inaudible] type of event and companies are shut down for months and months and if there is a global health pandemic and countries have to line up for medicine that is could be a mobile catastrophe or if tensions in the south chinapo sea and that's a hot spot right now and they block trade routes where does that leave us? that is a challenge with the concentrating any important product that we need for life in a single country. how did we get here? how did this happen? i will start with the story of the prescription i got two months ago today and it was an

antibiotic and amoxicillin, form of penicillin, the great drug worked really well and i was back to myself in two weeks. a real gift. penicillin tells a story of what happened in that making of that particular product. some of you might remember back during world war ii when right before the normandy invasion on d-day the federal government and industry, including companies like pfizer made sure that there was enough penicillin manufacturing capacity here in this country to help all the wounded soldiers that would walk away from that event and by having that penicillin availability it saved hundreds of thousands of lives where government and industry work together to ensure that we had an adequate supply of that miracle drug. let's fast-forward a couple decades and in 2000 for the near

times reported that the last penicillin manufacturing plant in the united states was about to shut down and that was bristol myers squibb plan in syracuse, new york. but "the new york times" did not tell the back story and what was really going on in the global market that triggered that? thanks to some european producers that are very public rmirited and have information out on the internet about what happened during that time. we can learn about what was going on in the global market. 1980 china very wisely invested heavily in penicillin fermentation capacity on a massive scale. twenty years later they began to see chinese companies come in on the global market and they dumped penicillin atnd below market prices and ineffectively

drove out american european and even indian companies from that business because they cannot compete. the european producers call this a landsliders decimation of ther industry. then what happened is there was a spectacular price increase that all of us that was invisible to us in some way paid for. in "china rx" we call that the assignment penicillin cartel. that is not the only cartel happening. if you read "china rx" you can read about the vitamin c cartel. i'm sure many of you take vitamin c and he might take a tablet but it doesn't come from oranges in the florida grove but it's made in a chemical plant from absorbing as egg probably in china. there's a fascinating story about that vitamin c cartel and

that continues to this day. thankfully there were american european and japanese producers of this absorbingng acid, active ingredient invited nancy and a couple companies dumped it on the world market, drove out competitors and when they were gone raised the price again spectacularly. clear violations of antitrust. we could have a whole session today on the vitamin c cartel because that story continues, lawyers are still arguing over and has enormous applications for a lot of our medicines and other products we get from china. we have these penicillin and vitamin c cartel's and what does this tell us? it tells us that we are losing control over the supply of our medicine. we, as a country, are losing control, others are dictating the price and dictating the

supply. we have to ask ourselves is this a situation that we want to be in? what was driving this and what were some undercurrents? we identified two. first is the generic drug law which is 1984, for those of you who remember the [inaudible] act and it made generic drugs available to the america public, a wonderful, wonderful best step forward and made them affordable for millions and millions of people. but that meant companies, if s they had to sell products more cheaply, were looking for a place to make them more cheaply. and so, they pivoted east to asia. buta at that time the fda was unequipped to oversee and regulate a global industry. what else was happening? in our research i've a very boring life when you find things

on the internet late at night and one of the most interesting things i found was a memo written by a dedicated fda employee, a chemist, and he asked the question or said we have no idea where all these bulk drugs, active ingredients, are coming from. they could get to the president. s had a period of time in the united states where it was the wild west. we did not know were some of these products were coming from. let's fast-forward to the year 2000. there was another major event that has triggered u.s. dependence on china and that is one, right here in washington, congress and the white house agreed to grant china access to the u.s. market and also china joined the wto. it was fascinating to see within

a very short period of time after that the penicillin cartel was formed, vitamin c cartel was up and running and the united states closed its last aspirin creating product plant, local producer cannot compete and it went out of business. something very important also happened in 2004. a major healthcare company in thelt united states switched suppliers. it was a very important ingredient for product they make and that product is called [inaudible] and a blood thinner. it's widely used in hospitals. if you been to hospital probably had heparin. a couple of years after that swift they switched suppliers from the u.s. to a china -based

supplier it turns out there was a contaminated ingredient that was found in baxter's heparin product. from china and there was deliberate contamination for economically motivated reasons and there were 250 deaths in the united states associated with that contaminated heparin. that triggered extraordinary reforms, good progress to try to fix what we basically had to deregulate environment in other countries where we got our medicine. but it is still far from perfect. there are a couple of lessons here. the first is this globalization has effectively been a form of deregulation and you don't need and the laws to change the regulatory structure but just move production overseas and

that is effectively deregulation. the united states has had the highest, gold standard, good people at the fda and industries to ensure that we have high-quality medicines, every pill, every time. we effectively are outsourcing the manufacturing of our medicines to countries that have few, if any, standards. it's really remarkable. in this time. in 2007 some of you might remember the news report or the head of the chinese equivalent of the fda in china was executed for taking bribes. government officials in china said we are still at a very early stage of being able to manufacture high-quality medicines. that did not start or stop the market moving to a place that acknowledges it had very few standards. really a remarkable transition.

the other thing that is fascinating and again, to your point about your lack of transparency truths turns out we have a trade deficit with china in pharmaceuticals, at least as of 2014. i've never seen a public official in the united states acknowledge that we have a trade deficit in pharmaceuticals. maybe it's there and i love to see it if you caught a glimpse of it, please send it to me. but where i did that find this data point is a speech that doctor margaret -- gave in china where they were happy to hear that there is a trade deficit with the united states and china and pharmaceuticals. we have a lack of transparency. so how dependent are we on china really? i will give you a couple of fascinating examples. in 2015 the fda inspected a plant in china and it did that

because it was getting a lot of customer complaints, presumably industry complaints about the active ingredients that they were getting from this plant. it was bacterial contamination and some of the products did not have their full therapeutic value. that's in chemotherapy and could be devastating. the fda went in and found what they called systemic data manipulation paid it's a plant that is passed muster by the fda, tiny fda and other inspections over many years. the fda banned 29 different products from coming into the united states but because the so dependent is the fda had to exempt 14 of those products from its own ban. some ofe those products includd antibiotics or ingredients for antibiotics and ingredients for chemotherapy because the fda was concerned about drug shortages

here in the united states. that is how dependent we are on as a country. there was a fascinating story about the availability after the anthrax attacks and some of you might remember here in washington and in new york so the u.s. military needed to buy a whole lot of [inaudible] and n ey went to a reputable company in europe reported in bloomberg and in the course of writing the book i i spoke to the ceo of the company and they said yes, he get the starting material from china, so think of it the u.s. military needed [inaudible] after the anthrax attack and it was obtained from china. as someone from the industry said so what if china is the anthrax attacker? on medicines they can give you a strategic weapon and then there were other examples when india said that in the newspaper said

maybe our military is dependent on the adversary for medicines i thought what about us in the united states and where is the defense going to procure its medicine? i called up the defense department and communicated to the defense logistics agency which purchases medicine on behalf of the military family members retirees and they acknowledged that beginning in 2012 that it had to begin purchasing a limited number of drug products from china apparently because there wasn't any otherly source. what about our veterans? utterance hospitals now, federal government has made it easier for the va to purchase drugs made in china simply because that is where the commercial market is going.wh what about the risks? what are the hidden costs of cheap drugs? we don't see them. in "china rx" we have identified with some of those risks are.

what about consumer protection and product liability? i called up a lawyer, american lawyer, who works in china and advises western companies and says you have to understand the china price and the attitude is one of the reasons our product is so cheap is because we assume no liability for it. it is buyer beware. let's take an example, say you tke a medicine that is made in china by a chinese company and it's sold here in the united states by a distributor and chances are the distributor has no financial assets or limited assets and you effectively have no legal recourse. where are the hidden prices of cheap drugs, the lack of consumer protection what happens when the fda goes into plants in

china and what does it find? there is a plant that was making an epilepsy product and the plant lacked any temperature and humidity control system to save money. so when the fda inspectors went in and was a hot day and if yo you -- the employees open the window it's supposed to be made under temperature controlled environment. it's a way to save money. another hidden cost of cheap drugs. seven years after the heparin tragedy the fda went into a plant in china that makes heparin or a sedative. what it found was that the company that supposedly was making it was not the actual manufacturer but the real manufacture was another company that apparently the fda had banned because the prior possible complicity in the heparin tragedy years before.

the show factory and the shadow factory. one of the most stunning things that we found will doing this research is that even american companies who have plants in china don't meet the standards we would all come to expect. a major u.s. company, fda went into its plant in china and decided to close a plant because it had no place to wash their hands. the toilet wasn't open pit in the floor. this is what happens when the outsourced production from a country with the highestwe standards in the world to replace that is still on a growth trajectory. that said, we have to be clear but there are some plans in china that are close to and or meet western standards.

but there is variability. it will take a long time for orthose of you who have ever worked in quality control and quality improvement and it takes a long time to build up a culture of quality and meeting standards and safety and to sustain it. those are some of the risks that we see. i will close with what do we do? where do we begin? one of the first recommendations is that we need to have a change in our mindset about our medicines. right now there are a commodity the different than a t-shirt and how can-s we buy them is the cheapest possible price even if it's a few cents difference on a 50-pound drum of product? instead we need to view our medicines as a strategic asset, just like we view oil or energy supply and asic food commodities like wheat and corn. let's treat them like a strategic asset.

the second thing we need to set up a checking and forecasting system. so we know where our medicals are coming from, global supply, global demand and forecast production and know where the hotspots and the risks are. we do this for energy and we even gone the department of energy website and they track this. so we don't run out. the same is true with food but we don't want to run out of food with a strategic asset is something that a country will fall apart if we don't have it. we need to consider our medicines as a strategic asset. they are made by private companies but they serve a very important public purpose and so we have to work more together to ensure that we have our medicines and we have control over the supply of those medicines that we rely on every day. finally, we have to make sure that we maintain manufacturing capabilities here at home. it takes knowledge, skill and

experience on how to make drugs. we can't let that go. i spoke to a person who runs the manufacturing plants for a brand name drugs and she said we do everything right and i can tell that she does. i see these from people who are coming, looking for a job, that come from other plants and they said our company just built a new plant and they are not using it but moving east. this person wonders who will do this when i retire.ir what will happen to our company if they could end up being or having publicc relations and marketing and pr without any substance? we can't let that happen. i will stop there. i just want to say we are here at university, "china rx", it lopens up a landscape and i hoe there are students and faculty here and others in journalists that dig deeper and we keep this on the radar and we understand

what is going on in this very important market and we can only do that if more people are interested. so, thank you very much and i hope you buy a copy of "china rx" for tell your family and friends. it took three and a half years to do this research. it's not a transparent industry. thank you. >> thank you. we will move into a discussion with our distinguished panel appear but before going into that i just have to thank you very much for the research and a for bringing this issue forward in a way that tells a vivid and, in some ways, it's of a wake-up call for many of us in terms of realizing that this is a very real issue. ... in this country. and i thought maybe i would first turn over to dan appeared on a panel with us. he's the former commissioner of the u.s. china economic security commission expert in those and china.

in today's current political context, there's a lot of concern about globalization of trade and commerce, a lot of concern about the movement of manufacturing but it puts some perspective on how in medicine particular but also in medicine but also how this continues to unfold vote in this current time we are in today. >> this is a culturally supplies almost all of our medicine, i country steals between 215 and $600 billion a year of our intellectual property according to the fbi they subsidize their

fans manufacturing industries which includes pharmaceuticals in violation of the trade laws, a country that protects their domestic advanced manufacturing industries in violation of the trade laws, a country who forces technology transfer all companies during business in china. in violation of the trade laws, a country who freely buys our advanced manufacturing companies, in years and done other strategic basis where we are prohibited from buying their advanced manufacturing companies. in a country that uses trade as a weapon. three years ago, the chinese seized off the coast of the

philippines, the confrontation arose between the philippine coast guard and chinese navy overnight, trying to cancel all of it into china. that is our 10% of the philippine economy. millions in the ships. about two years ago, the japanese sees a chinese fishing vessel in their quarters and left a clue. the chinese immediately stopped shipping rare earth minerals minerals to china because the toyota plant caused it to shut down. janet japanese released the crew and shipments contained. so this is a country we have now become dependent upon for our drugs. what's at stake here is, we are

moving from our relationship of a competitor to a relationship of an adversary. the chinese have one aircraft carrier, they are building three more aircraft carriers. aircraft carriers are a weapon. they are building courts all over asia. they are using islands in the east and south see belonging to the philippines, japan and vietnam. militarizing the islands and putting missile bases on these locations. militarizing space now have the capacity to take out our gps system in space. in addition to that, they are spending hundreds of billions of dollars improving their milita military, reaching parity with

us on fighter jets, submarines and missiles. their stated intention is to push up out of the eastern pacific. you don't have to be a military expert to seek what's going on here what this may lead to. i speak all of the country and i always say i've met the enemy. the enemy is us. shame on us for allowing this irresponsible business procedure to perceive proceed with a critical component so my hope is that we can raise the alarms here to pressure our congress to do something in a responsible way for the american people but i'll stop here. >> is a follow-up the way i

became aware in the context and from china contaminated, i think she talked about that a little bit, to my shock, i learned it's all coming from china. most say it's a blood thinner but i think many people aren't aware that it more than that. it's what is keeping it from clotting, not have ivs done. they flush your id, it's a heparin so it's an absolutely essential drug, not only for people needed as a blood thinner but anybody who needs an intravenous direct. so it's hard for me to

understand how that could have happened, how could it happen? something that is essential that basic medical care could wind up being completely offshore. >> heparin comes from the intestines -- what was going on over there, it became an industry for housewives living in small areas in china who were pulling the cuts of these animals out and very unsanitary conditions, many have no running water and shipping them to distributors and allows that in chicago. it was from that basis that the problem developed. the fda is trying to get inspections on site in china, the chinese have severely

restricted the number of inspectors they will allow end. that whole program has become completely ineffective. >> hundreds of thousands involved in the production of this product, it would seem to be very difficult to inspect, to me.t much of any enforcement at all. do you have any comments on th that? >> and fda inspection here, 10000 miles away but i think the real issue is what happened with the world's largest pork producer, you are familiar with this transaction, where did all of those go from here in virginia? by the way, if you have sunday morning bacon or ham on new year's day or if you are going to mcdonald's, that is coming

tom a chinese company. we had a problem and if you want to talk about that, because it's a controlled in a substantial portion in the united states. the company was sold to china and we lost, potentially lost, we don't really know because it's a private company and congress has no authority to ask. where are you sending your pig got? are you shipping them to china or are they staying here in the united states to make this important drug? >> if you could imagine, it was le largest producer in the united states, 36% of pork market. they paid a huge 30% premium for this company. pork is 50% of the meet daya

diet in the china. they are the only company in the world that has our pork reserve. you can imagine every six months, they have to turn this over. the problem is, the average chinese pays 40% of their income for food. in the united states, we spent 11%. so slight increases in foodo prices create instability in china. that's why they did this. the chinese have learned it was better to buy the coal mine than just the coal. it's better to buy the mine than the work. they had all they wanted on the commodities market that they chose to buy this company not only for the get this company but they got all of the

technology they are handling genetics from all kinds of sophisticated technology that this company originally from the department of agriculture from our tax dollars, and the real problem is that it's now coming back into the united states with that label. so you have no idea what you are really eating. we have certificate of labeling here in the united states. there are 18 exemptions. you growth and you want to buy pork, you can't -- you look at the package and see packaged or processed in the united states, it ultimately comes from china. i know from testimony that 85% comes from china. if i'm going to buy that, it is

coming from china, contaminated fish farms. it became -- it becomes a real problem not going what they are buying and the issue in congress was, should they allow this to take place and ultimately, it was determined by congress that this was not an actual security item and they allowed this to take place. today answer that? >> thank you for that. i'm going to turn to patrick from the former assistant secretary of the u.s. department congress where he was responsible for the international trade administration during the clinton administration and

before we are talking about this, at the time it was creat created. they witnessed that this was not o smooth process creating the wto, there were a lot of concerned members of the public. i think most of us at the time were quite optimistic about that and particularly about the prospect of bringingpa china ino an international trade agreeme agreement, we could see potential risk and also a number of potential upsides and i thought i would start with the issue, 25 years later, do you think that has met our expectations in terms of bringing china into the wto and

opening up trade? >> first off, went to china first in 1981. china was a poverty-stricken country. they had what they called humiliation, it was taken over by the western powers beginning peth the opium war, the second opium war, the fall of the emperor, japanese invasion, the whole thing fell apart. control on 49 tried to build a communist party country, it didn't work, they couldn't get the economy going. they took over in 1979. he says we need foreign investment, foreign technology, foreign know-how in foreign markets. that's where we are going to get our wealth and power back.

they want to be numeral no they want back. okay. we accept that and i think that is pretty accepted among countries now. china and the wto. the wto was created, we used to have a gap 45 until 93 when the wto was created. wasn't as optimistic that it was going to work because i was there to keep financial services out. we didn't think we were getting market in asia so we did not want financial service to be covered by the wto because there's something calledse msn, very low tariff to china because both favored nations and you have to do that. china did not come into the wto when it was created.

in 2000. because china was a communist country, we could not the msn more than one year at a time. there was a law called jackson so we could get china more than one year at a time. we are giving thought, why did they want to get into the wto if we are already giving them back? they wanted permanent msn. that meant the congress had to change our law. the congress was worried to do so and all the following course, this will increase american exports to china. when china comes into the wto, had a decision 2000, 2001 the cayman and congress gave them and in 2000, the bush of ministration brought them in 2001, bipartisan, both parties. they hads a $80 billion trade

deficit. we have a $370 billion trade deficit with china right now. congress was told would help increase american expert and decrease the 80 billing dollars trade deficit, it did not. the whole thing was about investment.e day after the houseboats in china giving permanent msn, there's an article saying this was never about export, this was about american companies investing in china. both to satisfy the chinese market and push it back here. that's exactly what happened. there's nothing going on the same. , i saw it. when you have something called corporations at the stakeholder 1990, the big organization of ceos, they said there responsible these are to their customers, employees,

their communities, their shareholders and their country. 1990 -- 1999 when the business market put out the new statement of what the obligations were close to the shareholders. that's it. you asked with a response body is in their own compensation is tied to their ability tor make their shareholders wealthy. american corporations, their response body and china now in the wto and we are locked in 2.5% tariff from china and the united states. that is not me when we ship goods to china, we paid about 11%na tariffs for american goods going to china. msn means you only gives your trading partner. the incentive is for american

companies to go to china and shipped back here. if you read the book that our author put together, he will see that is what happened. our companies, we have talented high level people in this country and their jobs and they were taken from here to china. that's what's guiding this whole process. ralph omri, the former chairman of that foundation, he had written extensively on this whole issue of how we move from frakeholder to shareholder to capitalism. as you see, the average ceo is to make 50 times the average worker. albert making like four or 500 times that.im there concentrated wealth among the country and they are undermining average middle-class

job in this country. this is a very important issue and you put your finger right on it in this book and pointing out the national security application to what we are doing in our country hasn't grasped it yet. i think the american people know something has happened and i think trump tapped into this. he talked about this issue, i'm not sure he has all of the policies in place to address this because unless you deal with this issue, you're not going to be able to do that. as a helpful? >> particularly, contains a tremendous amount of intellectual property has gone into the department and production but also an enormous investment by the american people in his science and research, the prices we pay for drugs and research done privately by the companies or

nih, i'm happy to see the world benefiting from back we are now entering into this. where there increasing conflict between our country and china, we are seeing that there is terrorists going on these products that includes intellectual property including the drugs. can you talk a little bit about why they would be targeted for terrorists and what the impacts of the tariffs might be? >> the chinese put out project 2025, they've identified ten key want to puthey world leaders in. in terms of satisfying their own market and global markets. they are pumping subsidies, they

are stealing intellectual property from american companies, when american companies invest in china, they require it to be done through joint venture so you have the technology plus they say if you want to do well in china, you should put a lab in and you will be considered a friend of china and get better treatment. all that is going on. what the administration was doing, section 301 of our trademarks. we identify unfair trade practices, we can target those practices with tariffs. that's exactly what bob in this administration are doing. they are saying certain of these industries subsidizing from your stealing doctoral property, forcing companies to step down, we are going to start restricting your access to the american market. we are not going to help you make those leaders. one, when i.to get access to

your market and second, you're going to destroy the rest of what we can do here at home. since china had the wto, we had $4.2 trillion with trade deficit with china. i know the big discussion among economists, the trade deficits really matter. if you look at the filming of gdp, there are four factors. one is med experts, the difference between exports and imports. when you're running negative exports, which we are doing hydrate, one billing dollars last year, 750 billion in manufacturing goods last year, it's a detrimental effect on job growth and wealth in the economy. we've got to get this trade situation scraped out. i'm all in favor of what they are doing on section 301, i do not think is adequate, i think we have to get to this corporate

if you and appreciate our responsibility to this country and not just their shareholders. >> it's hard for me to understand economic final but one thing i can understand that's a fundamental is the extent to which the prices of drugs are driving the cost in this country and the differentials between the same drug in this country compared to what people pay in canada, europe or australia, our prices are there. in comparison to others but if there's hope to be able to reverse the flow or other policies we would need to do, are there solutions on the horizon? i think is a couple of issues here. first, one of the o reasons drug

prices can be so high in the united states, they have nothing to do with china but our own internal market administration and for those, if you're watching, all the middle men and women from drunk manufacturers to the pickup at the pharmacy, there's a lot going on there. what should be a costco model open competition, it's been turned upside down be one of the most expensive place you could do that. a lot of people are making a lot of money off that middle process that can make drug prices so high. >> so this is from having insurance we see the price, $125 within what we pay then a negotiated price at $12. 90% of the price goes away.

that's difficult to comprehend.s >> tonight is the best disinfectant, we need sunlight to be 125 degrees in the blazing sun, drug prices, how they are set in whose settings on. we don't have it now. there's no urbanized constituency to demand that transparency. that's what we need. i also want to respond, or patrick were saying about the impact of our loss of industries communities. the book, iab tracked a little t about connecticut, the place where fisa had substantial operations in their programs. for lots of reasons, when drugs and lipitor when off patent and investing in china, billions of dollars for research and development building plant there, you see what happens as they step back and had

substantial layoffs, what down to that local economy? i spoke to people who work in real estate, i spoke to the guy who runs the bowling l.a., a gentleman who has an insurance company and he described how what happened to housing prices and jobs and the guy from the bowling l.a. said with off these layoffs, industry moved offshore and we've lost patent protecti protection. we are seeing an increase in drug use, beautiful shoreline community, it is just changing and it's changing rapidly. a couple of weeks ago, i called the gentleman fly interviewed who ran an insurance company there in grimes, is quoted in the book and he said thank you, but i've got to tell you, i had to shut down my business. the loss of these businesses is having a profound effect on

communities around the united states, they volunteered in the newspapers, you might hear in the local newspaper but it's devastating to people, their families and they are highly trained people. many more people in the stem fields. we have people in the stem field, some of them are devastated and companies are setting up very high investments in china they are trying hiring researchers at a third of the cost. d have a huge impact in the community. we have to decide as a country, we want an industry like pharmaceuticals here in the united states? three want to have it? we want to maintain that manufacturing capability and if the answer is no, we are good to go. if our answer is yes, what do we need to do different? that's what we hope china will circulate a conversation about.

>> when we just read something from the book. pharmaceutical manufacturing plants are among 70000 u.s. plants that have shut their doors in china and the wto in 2001. it has been a tremendous outsourcing of u.s. productive capabilities. everybody said we are going to be the innovators, when you're not making that, you're not going to be the renovators. we say we are getting cheaper drugs, china is in the position to control the price of drugs, you're not necessarily going to get people doing drugs there in that position. we are hazardous roast road for

this country. >> that's why i like this issue because we can identify with steel and auto and aluminum but we can identify with what we put on now, some things we rely on. >> all kinds of healthcare but on these issues about the intersection between the rules of the road and the things you described about how china is owactually capturing these mar markets, i'm having trouble squaring the circle here. it doesn't make sense to me that this has been. given the kinds of, what i

thought were the billings to use trading machine to enforce that people follow certain rules. >> the rules were set up on the wto on the basis that everybody was going to follow the rules. chinese chose to only follow the rules that benefit them into the mechanism is so slow and so difficult to enforce, it is ineffective in addition to that, you have to have for company complaints. american companies are so intimidated by the chinese that we can't even get them to file the complaint.

so if they import an automobile into the united states, the tariff is 2.5%. if we import an automobile into china, the tariff is 25%. it's 20%. are we complaining? we can't get companies intimidated by the chinese government. >> companies would have -- an official on this -- >> they have to bring your case to the wto. you have to provide the government with the information and if they are hesitant because the chinese will punish them with their operations in china, if they provide the government with the information you will see many of these companies won't even testify.

but before the tiny commission and in the congress, i worked in the banking community for 15 years, i've seen this up close. boeing -- who would wonder -- when boeing makes a sale to china, they make it part of the plane here in order to sell here. we used to p think why is that? we put something in the wto the you can't do, chinese completely honest. they say we are not forcing your company's, they are doing it on their own. of course they are doing on their own because they make them selves while there. it's a short-term problem and it's bad for the united states. >> maybe i will have each of you comment on what's going fast-forward, trying to think

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

canada, china, japan, everybody else has an industrial policy. what we have to do, is to -- if we don't subsidize manufacturing industries, we receive that whole industry to china. they have completely wiped out the electronics industry, the entire industry moved to china. lasers, digital all this stuff in the future is now in china. they are in the process of moving the entire semiconductor industry from the united states to china. the white house looking into a company called global foundries in california, but they were moving to china, i called the

president of the company up and he said, the chinese offered us use of a formfitting dollar chip manufacturing plan, low taxes for ten years, they'll trade all of our workers and it goes on and on. he said i didn't even know who to talk to in the u.s. government. i said it wouldn't make a difference because they wouldn't look at it anyway. he said to me, what would you do if you were me? of course the incentives were so great, we are moving to china. we are doing this unless the u.s. government starts to incentivize these companies to stay here. there's a lot of problems that we had to get our corporate income tax down to where everybody else is. that was our problem. the corporate income tax in chinarp is 15% and the limit is 12.

so we were way out of whack. i was a good first step but there's more things the u.s. government can do to incentivize these companies, we were incentivizing them to move. if you profit that accompanied made overseas was not subject in the corporate income taxeser unless they repatriate the money. they would leave the money over there and continue to build others. the answer to the drug problem we're talking about here today is the united states has to incentivize drug companies to manufacture here. that is providing them with r&d facilities, pay for r&d the software industry and semiconductor industry, one of the biggest problems i can't

find enough electrical engineers. they have plenty of them in china. one thing the u.s. government can do is say we will pay your tuition, anybody who studies electrical engineering or state university in the united states, reimburse your commission once you graduate if you stay here and work. it's things like that that we need to do. otherwise, we are going to los lose -- imagine artificial intelligence, supercomputing and the other thing we are doing -- the other think we are doing is supercomputing is the basis of innovation in the united states for advanced technology. it is critical and the united

states opens up supercomputing stations for laboratory 1946. up until a few years ago, the united states led the world supercomputing. two years ago, the chinese exceeded the united states and now the gap is getting wider. what this congress do? to cut the budget. it's like eating your seaports. this is the insanity. i've met the enemy and it's not china. we do all these crazy things that harms us so if we -- 150 years, we didn't have to do anything. we dominated the world but those days are over. if we don't do anything, we are going to lose allth of these m.itical industries. >> here's what i think.

the trade deficit is going to sell the country out from under us. when your running massive trade deficit, sending those dollars back, they can go back and bite 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 goal because that is in the interest of the american people, we figured out how to get them there. the best think they ought to do, we're going to dominate that trade. we will figure out how to do it. part of the government is a key part, partners providing these incentive and talking about our own children. fortin students getting science and technology in the united states and i would have done it

a different way. i would have said if you are an american company and you produce it in the united states, we are going to give you a low tax. learn to do all your production in china and ship it back here, we're going to have a different tax rate for you. we want to be incentivize production in the united states. there are a lot of g ways to do this but you have to set a goal. once you set that goal, you can figure out how to do it. >> the other thing, which really hurting these countries are thought.ar buybacks are where corporations buy their stock.po up until ronald reagan changed the security laws that prohibited corporations from think that because it artificially inflated that, greg and change to that end today, in the first three months of this year tens of billions of dollars of stock had been brought back by corporations. that means instead of those

revenues being used to growth the company or put in r&d, it's going back to the major stockholders, usually the president and chief executive has a fund, it hurts the economy the country. another flaw we need to put into place to stop buybacks. that money should be used to grow companies, not to enrich ceos. >> how confused priorities are in the public health, you talk about china subsidizing manufacture of things like drugs and semi conductors. that is very sad. rosemary, i'm going to turn it to you and talk about tax forwards. >> the reason i wrote china so

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

nightly news and a lot of the mainstream media so how can we find alternative use across the spectrum? this is not a democrat or republican issue. it affects all of us. that's what we intend to do for the next number of months and there are places where you have it in your work and it's where we can have this conversation, please let us know. the intent we are going to start something here, i've been impressed with in just two weeks, how much ordinary people, even people in the industry who can't speak publicly, they know we have a serious problem. therefore the people and companies who don't like the fact that their company has a bathroom with a hole inn the floor. i can't imagine there's any person who likes that situation. how can we draw on those h peope the norms of the public can change the conversation and informed the people and informed

people can do the right thing. >> thank you. thank you very much. thank you, all. [applause] >> we have a couple of minutes, a couple of mike's here in the aisle, i see somebody coming forward. if you don't mind introduce yourself. >> section 301 case by the u.s. tradeht representative and 45 pages of proposed tariffs were released and they included a lot of chemicals for pharmaceutica pharmaceuticals, i wonder if you've seen the list and whether that would do what you are intending or have perverse

effect of that production in china. >> my understanding of 301 is being used to focus on the industries ofus china is put in the 2020 with a high tech industry. among that technology and so if you put tariffs on those industries, the subsidy that the chinese is giving to those industries and secondly, you make them more expensive for those goods to come into the united states. in workout are people so might not make those so we have a chance to move up the food chain and have those developed here. i understand is to focus on the

301 on project 2025. >> building off of fact, my name is isabel, i'm with inside u.s. trade. it sounds like tariffs are not the answer here on these pharmaceutical sectors and critical minerals use in these products. what other congressional solutions do you think are available in including incentives in the textile are there any congressional funds you mentioned putting pressure on congress to stop this? what are some ways in doing th that? >> one think they can do is declare certain drugs are criticalke in the national

security of the united states. those drugs must be made here. let's take penicillin. we can't be one 100% dependent on china for penicillin. one thing that can require them to be made it may be the issue ofof subsidy incentive or whater they want to do but that is to protect us from any adversarial action china may want next yeary or five years from now. >> in the case of heparin, there are researchers who are making progress coming up with a synthetic heparin so we don't have to rely on pigs in china for its but the incentive intern by synthetic product into a market drug are not good because currently, heparin is still very cheap. the market isn't aligned to want

to buy a more expensive product but public investment targeted in strategic on essential medicine. we need to think about public investment in that research and bringing products like that to markets that will preserve and contact us from interruptions. the pandemic preparedness is a national stockpile if the government stockpiled certain products, not just drugs but other products. n95 masks and all kinds of things to be there in case of a major pandemic. so it's not a foreign concept and having the availability of certain drugs. in case of the heparin, what really happened and what sets down our manufacturers of heparin, was when there was a problem with in the uk.

i thought it would be sensible to stock them to make cows. that might be the case for heparin, they manufactured ourselves and when they stopped that use, it kind of shifted to china. that's to say if they had a better way people have been working on the monitor, you could see that space and that would be away i would be more of interest because it's not efficient to manufacture that. you have to talk about is like that, it's not a pretty picture. >> i will just comment on one more thing. i was thee. committee when we dd

the 88 trade deal 30 years ago. it was i think jim was our speaker, they charged each committee to look at areas onac other jurisdictions and to develop ideas of how to make the market better. we haven't done in 30 years. congress needs to get into this business and to develop the law that can help us be better in a global economy. in that trade bill, we have exchangeat rates, there are a lt of great things in that bill but the wto wasn't even in existence. we need to really update the strategy of the united states. we have to do it through the congress. >> we will take two more questions. >> you mentioned pharmaceutical

strategic, i'm wondering if you could exaggerate, elaborate on the purpose but should we have a strategic reserve or medicines d it look like? >> i think it would be good to identify group of public health experts positions and others to identify what is the list of essential medicines we need to have and we should not be allowing other countries to produce in such a substantial share of the market. that would be a first step. those who use them from most physicians have no clue about the situation we are in. i would be a first step.. the experts identified one of those products we need. the question is, can we -- how can how much can we stockpile? it's more discreet --

>> you want to continuous manufacture. >> there's another.here, a new one that's appropriate called continuous manufacturing. there hasn't been that much advances in the manufacturing of our medicines, as a taking advantage of our technology. another role of health and congress and the federal government incentivizing companies to advanced making of drugs. there's some drugs you can make within 24 hours. month technology developed founded by a european country, not a u.s. company that technology is there. prefabricated drug plans that china is buying from general electric. how can china buy it? why are we buying them here? incentives for technology in our pharmaceutical manufacturing is another step in the right

direction.he >> i'm from kaiser health news in my question is too rosemary. we've been hearing for a while that 40% of the drug products and 80% of apis are made in foreign countries. but that number from 2009, fda hasn't updated between fatah and the lack of labeling laws that say your drug only has to stay, where's manufactured who labeled it where it was distorted, are you are you able to figure out the number of pharmaceuticals made in china was indeed growing? >> that's a great question. the numbers out there are old. where the data points came from is from people who work in the industry who can come out and talk turkey about how we are. we don't have goodod official

numbers, we have to ask the questions, whyhy not? 80% of w our active ingredients come from 200. they don't want to split up india and china, they just don't want to. they also want to do is put up the active ingredient from raw material. so you may make the active ingredient but it might depend on china for that material. they don't really pinpoint the amount of dependent we really have. to answer yourll question, our data points came from people in the field who said it china shut the door, within months we would have to shut down our hospitals and pharmacy shelves there. you can't get better than that. we should have the answer to that, we need to know who's making our drugs, water supply and demand? we need a risk assessment by country, we don't do that. at least in the public interest. commercial database is that we

don't have this in the public interest. it's nobody's job the federal government to do that. that's stunning. we wouldn't allow that for food or oil and energy supplies that we allowing for this. i think there's a a lot of peope who don't want toic get into ths under the terms of proprietary secrets. national security should take precedence over that, we need to open up that big can of worms. china relies on with 180 degrees sunlight. >> it's actually quite complicated industry. there are raw chemicals used to make active that are then formulated and i think what we see on the containers is where they were packaged. you don't really have a way of understanding before they were

actually packaged in that product. there is conflicting flaws thatt requires companies to put on the packaging country of origin which is defined as one of the active ingredient coming from? it comes in the country, you have to label really active ingredient comes from. we have the information somewhere. we don't use it very well. i don't know howly many people actually know it but then there's fda rules and they allow cld west, it could be the packager -- >> that's different than the package coming in. >> is a complicated system. >> correct. >> where you can see the label of the medicine and in some cases, the labels indicate the

manufacturer, where it was manufactured and in some cases, even the active ingredient. if you can't find that out from the label, you can try to call up your company and some will tell you, others will not. it's worth a try. >> how much does the fda know? given that they haven't put out a new breakdown of that. does the fda know where they are made? >> they know. they know. the question is, why can't they pull it? >> i have a question. one of the things we find like walmart, american companies making goods for the unitedou states but they want to stay in our supply chain, you better move to china to get the lower cost. are they pressuring the american

companies like kaiser and others to move their operations from china to stay in their supply chain? how does it work? >> i do here is others are real hammering h down on manufacture. we can't underestimate what it takes to run a high quality manufacturing facility, the lack of sophistication or maybe it doesn't matter because procurement departments in custody's want to make sure we get the lowest possible price. in you have a challenge between quality safety and too often, safety doesn't run out. this is where we need transparency on what the market looks like and whose pressuring who because it's so complex. >> congressional hearings on something like this, shouldn't

there be? >> i would love for them to have the courage to do that.co >> i want to thank you all, thank our speakers, thanks to all of you, this was really enlightening session. [applause] ... tonight books and reading. first pamela paul, editor of the new york times book review offers her thoughts on

how to get children interested in reading books then marianne wolf explores how our brains process reading digital media and after that the bookseller and publishing executive james muscat on the 1000 books he says a person should read in their lifetime. what book tv this week and every weekend on c-span2. >> sunday at 9 pm eastern on "after words", abc out correspondent jonathan paul provides a behind-the-scenes look at the trump administration in his book front row at the trumpet show . he's interviewed by mike mccurry, former white house press secretary in the clinton administration. >> you get an email the people which is a phrase which actually i spent a little bit of time in the book about the origins of that phrase. it's a very ugly phrase it's been used by stalin, used by hitler, during the french revolution. basically the justification

was, the people who were targeted by the law under which they were found guilty and beheaded, the actual law uses that phrase and any of the people. >> watched "after words" with jonathan karl at 9 pm eastern on tv on c-span2. >> kevin merida, why is espn putting out a young readers book called thefierce 44 ? >> for the undefeated, our platform which focuses on race, sports and culture, we had done a digital project 2017 that was kind of an ode tothe first african-american president . hence the title the fierce 44 so we had this idea that let's do kind of an all my two and arguably the greatest