Of all the corporate entities that funnel money into Congress to get their own way, the pharmaceutical industry must be the prettiest girl at the ball. No one seems to be able to tell her no, certainly not after she dumped two and a half billion dollars on Washington DC over the span of the past decade.
Big Pharma, unsurprisingly, loved Obamacare, for the great socialized medicine scheme created 32 million new paying customers by raiding the pockets of Americans who now have the privilege of picking up the healthcare tab of people who don’t bother to work for it themselves.
This lobbying hasn’t just ensured drug companies a steady customer base, but a steady profit stream as well, as the prices Americans pay for prescription medication are by far the highest in the entire world.
Yet if Big Pharma can control the United States government with a few tugs on the purse strings, they may find unwelcome competition hitting the shelves soon. That’s because China’s pharmaceutical industry has, like their manufacturing and their construction industries, caught up with the leaders of the rest of the world.
Yet China’s drugs don’t constitute yet another cautionary tale of trade deficits, but the potential to change the healthcare environment by creating far cheaper, and perhaps far more effective, pharmaceuticals.
It’s certainly understandable that many Americans might not feel comfortable or safe taking medications made in China. After all, safety standards on the other side of the world are notoriously lax; examples like the 2008 mass contamination of baby formula, which landed tens of thousands of Chinese infants in hospitals, hang a very dark cloud over the potential of any Chinese product that promises to improve health.
Yet skepticism can be answered with success stories a-plenty. China’s biotech firms aren’t just large, efficient, and modern, but they’re also pulling close or even pulling ahead. Chi-Med, a Hong Kong-based company big enough to trade on the NASDAQ, is pushing forward end-stage trials for a drug they claim can cure colorectal cancer (which has just a 66% five-year survival rate).
If given the green light by the FDA, and similar health agencies of Europe, Canada, and Australia, Chi-Med’s drug could be the first Chinese-made pharmaceutical with a global reach.
China’s drug market has become the second largest in the world as the nation modernizes and as its population ages. It’s not a close second: China’s $150 billion spent on pharmaceuticals each year is less than half of America’s $400 billion.
But unlike our market, most pharma companies in China have slim profit margins and hundreds of competitors. With so little return and so few leaders, investment has been poor, with Chinese pharma companies devoting just 5% of spending to research and development, a figure that’s about a third of American or European counterparts.
However, the figure is ramping up, with investments of fifty billion dollars flowing into the Chinese life science industry in 2016, What’s more, China is attracting some of the best minds in the biology and chemistry business, who are eager for better pay and less red tape than they’d find on this side of the Pacific.
It’s far too soon to say that Chinese drugs, ranging from pills that prevent baldness to full-blown cancer treatments, will flood our shores and decrease the cost of our prescriptions. But if it happens, when it happens, it could hardly come too soon.
During Obama’s 8 years in office, the price of drugs doubled. This spending has come down particularly hard on the shoulders of senior citizens, as Medicare doesn’t cover the cost of prescription drugs; the average senior citizen spends $3000 per year on prescription medication.
Tales of excursions to Canada are typical for senior living communities living close to either border, where pills can be five or even ten times cheaper than on this side of the great northern divide.
One of the cornerstones of President Trump’s platform on healthcare reform has been to bring down soaring prices. Chinese pharmaceuticals can provide a much cheaper alternative to the pills that line our shelves today, though it’s hard to imagine Trump giving any sort of approval for more Chinese products to come onto the market.
If he bows to the pressure, however, skeptics of American drug companies will be able to clean up on the marketplace.