And for International Health and also the director of strategy at microsoft with those engagements providers next to hear from an investigative journalist from Fortune Magazine contributor and a carnegie fellow her book bottle of lies reveals fraud in dire conditions with the overseas manufacturing plants were those costs are made and the third panelist who is professor and director at seton hall university. Also a senior fellow for Global Health counsel ford relations with the roundtable series and Global Governance project. Finally you will hear from craig allen president of the United States counsel prior to joining csp c the long career in Public Service which calls multiple tours in asia culminating with ambassador 2014 through july 2018. I ask all witnesses to keep your remarks to seven minutes and we will start with you. Good afternoon its always a pleasure the last three years have been marked by a recognition of the Us China Relationship specifically and the globalization more generally given that extent of a normalized relationship and to take into account the critical supply chain much of this rethinking has been jarring with those policymakers that undergird the Global Economy for three decades. Whether we should assume it is a Technology Sector those that have other High Technology industries and as such has not felt these pressures to have a dispassionate assessment. We must persuade if that high Technology Sectors in this particular Life Sciences a biotech or fragile proving very difficult to recreate. Taking decades of cultivation of Venture Capital medical centers if the country will be as successful should the ambition prove that it is possible they begin to experience difficulties over Market Access or Technology Transfer that today is more all been positive relationship with the Chinese Market with the chinese regulators could change. And then to have additional attention to american policymakers for those lessons we should learn from those experiences of other High Technology industries in china. First the impact of ongoing trade with that bilateral investments each has unique characteristic in the Health Care Sector uncertainties where you have your antibiotics it has become increasingly dependent on china for pharmaceuticals. Whether america should have taken that dependency is not best directed to the Us China Relationship. If they want to ensure that a Certain National formulary in terms of crisis those policies around Domestic Production would not be appropriate. Its worth calling our attention to this concern taking on china for pharmaceutical products historically has been understood as one of the reasons the us china should be thought of as safe and stable now interpreted through a lens of mistrust if we believe there can be calculated dependencies on china for critical component components, healthcare, medicine that we are still working on good faith. But if we no longer believe america can do so much of what has been supported is no longer valid. So evaluating into the Health Care Sector the april 2019 determination of the chinese Digital Healthcare company has to back the 100 milliondollar investment has drawn significant attention and has already had a negative effect of bilateral investments and third those differences in relation by the banks funded by the american and chinese respective political systems. Those data set that serves as the foundation to the 21st century economy greater diversity and Data Available to researchers should in turn accelerate those medicines which then should spin out new therapeutics and diagnostics with access to those data sets so government led investment has become increasingly difficult in the United States in particular. For asymmetric data access policies between United States and china with their impact on economic competitiveness to be more fully understood as currently embodied in both law and practice american researchers do not have the ability to work with chinese assets as do Chinese Research to longer creatures to work with americans Artificial Research one intelligence ability to develop new use cases have large quantities of Training Data no country in the world is as serious about funding the aggregation of data across the number of verticals than china. If american policymakers wrestled with the questions around the asymmetric data Access Points its wise to keep in mind American Healthcare and Technology Companies have the policy of both countries were to exist on the data set. At current investment levels china will amass a much larger and diverse healthcare set of data upon which to train ai then china. First to put chinese into the health care based on our companys ability and then to review the national formularies to how best to construct that supplychain. And third the standards around the sharing across borders of information and forth come up to the trade policies with the era of Artificial Intelligence and fifth to make sure our government has an appetite to match real china relative to its ambitions such as biotechnology and Artificial Intelligence. They do have a National Security implication but the most critical is directionally important as to where our economy goes over the next 100 years. Thank you. Thank you for having me its a pleasure to be here. Investigating the manufacturing plants that are there principles the players of the market culminating in a recent publication and then to go into the overseas manufacturing plant with those dire conditions into the four continents to obtain 20000 pages of documents with the majority of those coming overseas with those active drugs whether active or generic coming from overseas it is crucial to the American Public that these are affected directly they should not be permitted to the us market but yet china is a continuing source of adulterated products most recently affected ingredient for the generic Blood Pressure medicine containing a carcinogen previously used in the production of liquid rocket fuel which is not good for you. And with the chinese manufacturing and reporting on this topic it is my conclusion that the fda is not effectively regulating the overseas manufacturing plants including china that exports to the us market and fda officials are also allowing substandard drug products to enter the us market they are making exceptions over a concern of a drug shortage and confusion of for their own authority overseas the fda investigators are spread too thin with staff in china and a relatively strong cadre of usbased investigators not willing to do inspections overseas. They must overhaul the foreign Inspection System to more strictly enforce its own regulation to ensure the safety of the American Public. With that i would like to give you three examples which are from a book that i talk about inspections in china. One investigator named peter baker who arrived in beijing 2015 of 38 manufacturing plants he inspected, im sorry 48 he found fraud or data manipulation and 38 of those. We know that there is endemic fraud in chinese drug plants because regulators have found that themselves in china. In 2016 investigation by chinas own National MedicalProduct Administration found 80 percent of the trial data submitted by the Chinese Companies to regulators gave approval for new drugs that were fabricated. So showing up at a plant 200 miles south of shanghai which is in a joint venture with pfizer to make highquality lowcost medicine. It was not a flybynight plant largest exporter of drugs into the us. Peter baker instead of requesting documents as investigators do, looked inside the computers of the plant using rudimentary mandarin he learned in College Trial injection and experiment of samples in mandarin it chicken one day to figure out it was running an alternate and Hidden Laboratory operation and putting in drat on drug samples and turning off the audit trail to leave no evidence of the test go the fda followed up by putting the plant under the import alert but then lo and behold discovered 15 of those drugs were in short supply in the us and lifted the restriction on those drugs. Eyesight another example when an fda investigator showed up and they make skin patches for pain in the plant manager grew increasingly concerned about the inspection and held the investigator hostage in a Conference Room for hours in the investigator is not released until the intervention of chinese regulators. But that incident an actual hostage situation the fda concluded the plant did not make a specified refusal and so that did not impose anything on the plant of that inspection and that third example is what is happening right now is a worldwide recall of active ingredients full of carcinogens one investigator went into that plant in 2017 and actually found the plant was not investigating impurities in fact it showed up and they recommended to the fda official action indicated which would have restricted those drugs from coming into the us. The fda determined the response was adequate as it concerns the observation and demonstrated it did not impact product so it did not impose an import alert one year later they were under a worldwide restriction because the drugs contained impurities. So in closing i would suggest that the fda needs to rehaul all drug Inspection Programs and go to highly trained wellinformed cadre of inspectors with a clear career path. They should perform short notice or no notice inspections in china not one month in advance as they do now and look at their recommended sanctions as they pull those as happens off too often. Thank you very much. Thank you. Thank you for inviting me. To this important hearing. I will talk about us Companies Access to the china Healthcare Market. My written testimony and the Market Companies and through my presentation today with the challenges in the Chinese Market and then i will conclude policy recommendations. Basically to improve conditions to face new challenges with the Chinese Market for go the government instituted policy clearly targeting Domestic Health increasing the competitiveness against foreign firms in china 21 2025 to increase the share of material of medical devices to 40 percent 70 percent by 2025. And those firms are also improving competitiveness china has the Third Largest pharmaceutical firms and it was reported the statute including in the us did not have permissions of the pharmaceuticals. The deepening of the Health Care Reform also has increasing pressure by making the drugs more affordable to create a super agency the Additional NationalHealthcare Administration hsa has been shocked to have everything healthcare related in china and then to negotiate so imitating the Health Care Model in 2017 and also across 17 products in 2018. In late 2018 the government also introduced that lifted 31 drugs for perfumes and a program so that combined is one third of chinas pharmaceutical market also the cutthroat process farmers will stand to lose high market share from their pharmaceuticals because of their assurance of their medicine is no longer guaranteed. So in june 2019 hsa launched a Pilot Program called dig and taken into different groups and it would be nationwide. And that aims to lower the cost of pharmaceuticals. In marketing the products and with that implantation groups and then to lower the cost to prescribe new and innovative drugs. The trade war also there and those efforts so that list unveiled by the Chinese Government to import goods with medical devices the leading chinese economy and with that countermeasure of a trade measure. And also that Regulatory Burden and despite chinas efforts in that regulatory system always has a significant burden and with those small start up companies with limited Investment Capital and with entirely new applications for their products. It is also difficult to get their products included companies complained with too many Government Agencies to go across the country to participate. And with that procurement system actually continues on a Regulatory Burden. For the sake of time with policy recommendations, look at the us Companies Engaged in china Healthcare Market that until recently that engagement despite that fluctuation of the relations that the chinese Healthcare Market has opportunities and challenges for us firms in history can teach us anything that both sides but the Healthcare Industry at risk of damage and that deteriorating bilateral relationship. Window select medical goods but it is also important and those that become globalized and International Collaboration and that becomes the norm looking at the investment of National Security. In a nutshell do no harm. Thank you. Thank you for the opportunity to testify before the commission today on the Us China Business Council a Nonprofit Organization approximately 220 American Companies to do business in china including the Health Care Sector and with the trade negotiator of the department of commerce with the discussions to look at the Market Access of pharmaceuticals. Over many years increasing american jobs through the export sector. Its important america remains among the most innovative nation because of the free flow of ideas and to engage in that process that respects different opinions in order to arrive at decisions that benefit the greatest good. As the commission considers the relationship i would like to highlight those principles underlying the recommendations in first those investments benefit the economy they have benefited greatly for the Growth Opportunities rising china has provided the rapidly growing exports. Those that invest in china to access but the revenues that they generated so in 2015 the us exports to china supported one. 8 million jobs of the United States with that Chinese Investment of the us are mild it is two. 6 million american jobs this is an important part of the story in the biopharmaceutical industry of 7 million us jobs over 2 million us jobs china is the second largest market for pharmaceuticals and fourth for medical equipment as china ages it is increasingly important to continue to participate in this space. But commercial challenges are best addressed through engagement and is my experience that chinese healthcare regulators are focused on safety and efficacy and they want to learn from us and with us. Nevertheless, while the west Held Companies see tremendous opportunity in china there are Market Access barriers that affect our ability to equally compete as indicated. The majority of these challenges are highly technical and unique to the Healthcare Industry to include one Regulatory Approval and pricing with reimbursement controls and insufficiently effective Property Rights and protection and implementation. Us government cannot arrive at and the best approach is to resolve these issues of privatesector industry stakeholders and experts are not closely consulted. And the most Sustainable Way through specific commercial issues is to through regular dialogue between the go