US medical supply chain remains at risk of ‘manipulation’ by China’s Communist Party, say lawmakers

By Matt Egan, CNN

New York (CNN) — A pair of Republicans leading powerful House committees are calling for the Department of Veterans Affairs to speed up efforts to decrease the agency’s reliance on China for medical supplies, CNN has learned.

The Covid-19 pandemic laid bare a dangerous vulnerability in America’s medical supply chains that resulted in shortages of masks, respirators and other life-saving gear.

Now, China Select Committee Chairman Mike Gallagher and Veterans’ Affairs Committee Chairman Mike Bost are warning the VA needs to do more to prevent a similar episode in the future.

“The COVID-19 pandemic exposed the national security and public health risks of failing to guarantee adequate medical supplies. It is critical that we learn from this experience,” the lawmakers wrote to VA Secretary Denis McDonough in a letter shared first with CNN.

Bost and Gallagher point out that in early 2020, the Chinese Communist Party (CCP) nationalized control of the production and distribution of medical supplies in China, rerouting shipments headed overseas to meet the country’s skyrocketing internal demand.

“This led to a global shortage of medical supplies that was acutely felt here in the United States, impacting every health system, from the Department of Veteran Affairs down to small rural hospitals,” the lawmakers said. “If our reliance on Chinese manufacturing and our lack of sufficient domestic production are not properly addressed, our public health supply chain will remain at risk of manipulation by the CCP, putting Americans in danger in future emergencies.”

The VA is in focus because, as Bost and Gallagher note, it is the largest integrated health care system in America. As the biggest buyer of medical supplies among federal agencies, it has considerable influence.

The Department of Veterans Affairs confirmed receiving the letter and said officials are working to respond to the lawmakers’ questions.

“VA works diligently to purchase goods made in America whenever possible,” Terrence Hayes, the VA press secretary, told CNN in a statement. “We are working in collaboration with other Federal entities as well as industry to identify U.S.-made products and to support the rebuilding of U.S. manufacturing capacity. As a result, the vast majority of what VA purchases comes from domestic sources.”

The day after taking office in January 2021, President Joe Biden signed an executive order instructing the VA to team up with the Defense Department, Department of Homeland Security and Department of Health and Human Services to build a national strategy on pandemic supply chain resilience.

Those government agencies published a report in mid-2021 detailing goals for “maintaining a public health supply chain that is resilient against disruptions from pandemics and other biological threats.”

In their letter, Bost and Gallagher complained that report includes “very little detail” about when and how to implement the new strategy.

“Like so many other government reports, we are concerned that this report is gathering dust on a shelf and failing to translate into action,” the lawmakers said. “We need to reevaluate the conventional wisdom that just-in-time inventory is sufficient. Holding greater inventories may be somewhat more expensive, but it greatly increases the medical supply chain’s reliability.”

The Republicans argued the VA took some positive steps under former acting Under Secretary for Health Richard Stone, who stepped down in June 2021.

“Much more must be accomplished,” Bost and Gallagher wrote.

According to World Trade Organization data, more than half of America’s imports of Covid-19 critical goods came from just three partners: China (30.6%), Mexico (15.3%) and Malaysia (9%).

The GOP letter to McDonough asks for answers to a series of questions by November 29, including whether the VA has participated in whole-of-government pandemic exercises on supply chain preparedness and whether the agency has assessed its dependence on China for medical supplies.

Congress has attempted to take steps to boost the resilience of the nation’s medical supply chain by easing dependence on goods from less friendly nations like China.

In June, Democratic Sen. Tom Carper and Republican Sen. Thom Tillis introduced legislation that would empower the White House to negotiate trade deals on medical goods and services. That bill would give the US president targeted authority to enter into trade agreements or reduce tariffs with America’s “trusted trade partners.”

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