Event. Afternoon. We will get started. Examine panel will u. S. China links in products marketing opportunities and Economic Health and National Security relationships. We will start with benjamin shobel who is a Senior Associate InternationalHealth National borrow of Asian Research and n director of strategy for Health Business strategy at microsoft engagements with national governments, providers biotechnique. Then we will hear from katherine journalistestigative bookrtune magazine and her bottle of lies the inside story drug boom reveals fraud and dire conditions in the manufacturing plants where the majority of low cost medicine is made. He theuird is a professor and director of Global Health he t seton hall directs the Global Health governance roundtable series and the china and Global Governance project. President of en the United StatesChina Business council. Joining that he will a long career in Public Service included multiple tours in china and asia and culminated as ppointment as a u. S. Ambassador. Witnesses it keep the to keep the minute seven minutes. Across washington the last three years have been marked by a regular anything much of with granted for taken for granted in the u. S. Hina relationship needs to be reassessed. Given the stpt it which normalized relationship between and china was es ssumed and taken into account during the construction of supply chains such as pharmaceutical and medical fors much of sectors has provoked policy politicians to rethink assumptions that have economy. D the whether we should assume highhcare will be a unique Technology Sector not subject to the strains that mark other High Technology industries or whether it is earlier in chinas Foreign Direct Investment cycle and has will lt the pressures but requires an assessment. Ri risk we must weigh their success is applicable to health occur. And buy yes yo it has tan nique ecades of vin he is mement and ties between academia, medical centers and industry. Should doubt their appetite caution is worth whether it will be as successful as quickly as it has een in other high Technology Sectors. Should chinas ambition prove it 23eu8d r filled companies can experience issues. Ty over f so health care might find todays more positive relationship with the chinese change. Could additional ed of attention learning from other industries in china. First, the impact of trade on bilateral investment unique which has characteristics. Anxiety over where you get the one thing. Is where you get the antibiotics or is another. The world not just mark has china as theent on source of manufacturing pharmaceuticals. Whether mark should have taken best s not a question directed to the u. S. China relationship. Ather, if american policy makers want to ensure a certain available in times of crisis policies around production and National Formulary with be appropriate. Our worth calling attention to this. Taking a dependence on china for pharmaceutical products has been understood as one much the relationship can and should be thoughts of as safe. New through a ed lens of mistrust. We take them for critical components health characters just two, we are still working in good faith. If we no longer believe america can did so much of what the american era of globalization is no longer vali valid. Determination that the Chinese Digital Health it company would have divest its 100 million nvestment in the American Patient Health care platform has investors andn by had a negative effect. Third, differences in appetite or investment and risk in relationship it Large National b american unded by the and chinese systems. As the sets Serve Foundation for the 21st century economy. Greater diversity and quadrant of data should result an accelerated development of precision medicines this should companies spinning out ew medicine predicated on access to those sets justifying overnment led investment has become difficult in the United States in particular. Asemitic policies needs it be more fully understood. Embodied in law and practice, american researchers symmetric ability it work with chinese data assets as chinese researchers to work with american. Ability l intelligence o develop new use cases hinges on access to large quantities of training data. Country is as serious about funding the aggregation of data a number of verticals which healthcare is one than china. Policy makers wrestle with questions around between china and u. S. It would be wise it in machinr mind American Healthcare benefit if policies exist it allow training. Investment levels china will amass a larger and Diverse Health care set of ata it train a. I. Than will china. Let me end on five recommendations. Gate chinese into american based on e verticals our ability to do. Review the National Formulary to construct how the splupply china. Standards around the sharing across borders of information. Th pdate the policies to reflect era of big did tata and mac sur china relative to its new sectors. That have a National Security implication it them and ly are most critical ly important as to where or economy in connection 100 years. I can do as well with the timing. Thank you for having me. I spent a decade investigating the overseas manufacturing are the principal suppliers of generic drugs it that s. Market and culminated in my back about the of the the inside story generic drug boom that came out in may. In the readers overseers manufacturing plants where the majorities of low medicine is lecost medicines is made. Book i traveled it four continents and i was in interviewed , hundreds of sources and obtained ver 20,000 pages of confidential documents. 90 generic with the majority overseas indians and 80 of active ngredients in all our drugs come from overseas the bulk of indian. Om china and it is crucial to the health and safety of the American Public hitted. Regular no substandard product should be permitted it enter the market but china has been a continuing recently active ingredients for Blood Pressure to have a was found the in general used in production of rocket fuel. Found fraudtigators and manipulation of quality data plants. Se manufacturing after reporting on this topic it f. D. A. Conclusion that the is not effectively regulating in china including that export to the u. S. Market nd officials are allowing substandard drug products to enter the u. S. Market making xception for reasons that include concern over drug shortages and confusion in their own authority overseas. He f. D. A. Investigate fors are then and some willing to perform inspections. F. D. A. Must at the overhaul the foreign inspection force and more strictlien its own regulations it ensure the safety of the American Public. I would like it if i have you three examples which are from my book. Followed and investigator named peter baker who arrived in 2015. Ng in of 38 manufacturing plants that 48 nspected in china, or data e found fraud manipulation in 38 of them. There is intkpl mick proud because c they have found that themselves. Investigation by chinas own National Medical found administration that 80 of Clinical Trial data ubmitted by Chinese Companies to gain approval for new drugs was fabbri indicated. Fabbri indicated. Plant ker showed up in a of shanghai site pfizer. Nt venture with by night plant. It was chinas largest exporter the u. S. Ients it instead of requesting documents inside the he looked using r of the plant and language he looked for words and despite the head it took him about a day it particular out the plant was hidden lab tier operation and laboratory and masking the and results in part by turning off he audit trails it leave no evidence of tests. The f. D. A. Followed up by planned under an impart alert restricting the 15 of thosescovered drugs were in short supply in United States and lifted the restricti restriction. Another example of an f. D. A. Investigate for showed up plant that makes skin patches for pain and the plant concerned about the inspection and ended up holding hostage in a or Conference Room for hours and he investigate for was not released until the intervention of Chinese Police and regulators. Despite that, an actual hostage f. D. A. Concluded that the plant didnt make a of the d refusal inspection and so did not impose import heaalert. Is what is ple happening right now which is a valspartin call of ingredients that will a carcinogen. Investigator went there in 2017 and found that it was not impurity in the ingredients and recommended to the f. D. A. Indicated which would have restricted the drugs the united in states. But the f. D. A. Determined the was adequate as investigations peaks onstrated that the didnt impact product. O did not impose an import alert. Less than a year later it was restriction wide because its drugs contained impurities. I would suggest that the f. D. A. Needs to overhaul its Foreign Drug Inspection Program nd it tphaoeneeds a go to highy cadre of ll funded inspectors. There should perform short or no notice inspections as opposed to announcing them there in advance and should rarely offrule the recommended sanctions of its own inspectors which happens too often now. Thank you very much. Thank you. Dr. Wang. Thank you. Hank you for inviting me to this important hearing. Im going to talk about the u. S. Companies access to the Chinese Healthcare market. My recent testimony i talked about the Chinese Healthcare market, the u. S. Companies. Arket share y oral presentation i will bring up the challenges faced by selling it thems will conclude and with policy recommendations. The u. S. Health firms face new to the es in selling Chinese Market. Clearly nment policy targets the chinese domestic its h industry to increase competitiveness making chinese 025 increase the share of materials of medical devices to and 30 by 2025. Firms arearmaceutical improving their competitiveness. Of 2018 they have set of firms gest developing new drugs. T is reported from some multinational pharmaceutical new positions or in chinese pharmaceutical firms. With the steepening of rrpl they pressure by easing. Aking drugs more Affordable Agency in the ealth care security has been charged to lead everything in china and ated with forei iating foreigners. Imitating the health occur moral of the u. K. Replace the ll u. S. D. O. D. To be the worlds employer. The negotiations with foreign in a with reliabilitying average price cut of 44 for the in 2017 and 57 2018. 17 products in in late 2018 the government tpnew procure menment school this listed 31 drugs and covered hospitals in 11 cities. That represented a third of fapharmaceutical market. Multi is process National Firms stand it also market share because ssurance for the medicines are no longer guaranteed. 2019, they launched a nticipate program of diagnosis related groups because cases. Ied hadnt it is expected this program is fully implemented nationwide in five it 10 years. Provider of payments aims it lower the cost of Health Including pharmaceutical products. Poses challenges for those marketing products. To ensure they have they are in protocols but they it lower the drug cost doctorsscourage chinese from prescribing new drugs. U. S. Ade war threatens farm sought confidential access utical firms it the market. He list that impose punitive tariffs included commonly used mechanical devices. A leading chinese economist that it should curb the export of ingredients as a urrent measure in a trade war a countermeasure in a trade war with the United States. Will also talk about the interrogatory burden for the pharmaceutical terms feel efforts to improve process, it y continues it present significant fortune tprpl suit confidential foreign pharmaceutical firms. It makes the market out of roof companies. Start they face tough requirements in applications for products. It is difficult for foreign farm harmaceutical firms to get in the list. They say it is too front involving too many government they have to be on the go across the country to participate. N a centralized system for pharmaceuticals is a regular regulatory burden. Pol policy the recommendations. We have a dynamic that until 2017 enabled expand and thrive despite the tphrubg wigs in relations. In the bottoming market has created opportunities and challenges for u. S. Firms. Anythingy can teach us before the sides should avoid industryhe health care at risk of damage. Did the right thing by excluding pharmaceuticals and goods from theal proposed tariffs in may. It is also that mportant that we keep in mind that as pharmaceutical become globalized cooperation is the norm we looking at the entire u. S. And China Investment prism of National Security. In a nutshell, do no harm. Applies it both china and the United States. Thank you. You. Ank mr. Allen. Thank you for the opportunity to testify before commission. Im here as president of the u. S. Champion Business Council a private Nonprofit Organization 220 american ely Companies Across all industry rbgts that do sectors including the health consider sector. Ambassador er u. S. And trade goshor with the goshor where i led the it improve chinas arket access for medical devices and farm suit calendarless. Dedicated many years it increasing american jobs through bolstering our export sector. Remain among the most innovative nations because we free flow of ideas, information and people that gage in a process uncourageous and respects at erent opinions to arrive decisions that benefit the greatest good. Commission considers the relationship 2010 the u. S. And i antwan u. S. And chinese would like it highlight three man principles that underlay my recommendations. U. S. Investments in china benefit the u. S. Economy. U. S. Companies have benefited greatly from the growth china has provided ostly through rapidly growing exports. It is person to note important to note most companies ins have in china to serve their domestic market but the revenue generate in online is also a driver of growth and he United States. China u. S. Exports it directly and indirectly jobs in 1. 8 million the United States. He economic benefits from that investment in china and are 2. 6 american jobs. The healthcare sector is an part of this story and u. S. , ports of pharmaceuticals reached nearly 3 supports 2018 and it 4 po 4. 7 u. S. Jobs. Medical Device Industry supports 2 million u. S. Jobs. Hina is the second largest market for pharmaceuticals and further for mechanical equipment rapidly as owing china ages. It is increasingly Important Companies participate in this to support u. S. Job creation. The second principle is commercial challenges are best engagement. Hrough it is my experience Chinese Health care regular hit fors are regulate fors are picked on afety and efficacy and want to learn from us and with us. Nonetheless, while u. S. Health tremendous e opportunities in china, there are remaining Market Access affect our t equally ability i to compete. Challenges are technical and unique it ealthcare including interrogatory approval delays, pricing and reimbursement and insufficiently effective intellectual property andment station implementation me. Effective approaches to resolving these trade issues if sector Industry Experts are not closely consulted. Most effective and Sustainable Way it resolve pecific commercial issues is through regular dialogue antwan key u. S. And Chinese Government stakeholders. Technical commercial issues and require to trade regular precise and technical discussions. International fora provide ortunities it leverage our bilateral negotiations. We must continue it use multi institutions to encourage china to adopt practices andbest standards that will indirectly support u. S. Exports. Health dialogue makes us stronger. The Chinese Government has improve basic health care and expand access to their aging om population. These are goals that u. S. Are very well positioned to support. There are mutually beneficial be had by reducing technical barriers to trade and gh cooperation engagement but we need to communicate regularly it compare practices and we need to build on a foundation of and collaborative rag ration. We need to leverage all available tools foreign engagement. The government should seek it engage china through bihall and regional and multilateral forums deposfoster improvements. Platforms to regularly discuss technical and encourage the Chinese Government to return to