When Washington and Beijing began throwing tariff punches at each other last month, few industries were off limits. Yet there’s been at least one notable exception: Both countries have decided that their burgeoning trade in medicines should be protected. 

To be sure, President Donald Trump has opened a national-security investigation into imports of pharmaceutical products, a step that could precede the imposition of tariffs. However, he has already exempted many of these goods, such as antibiotics, from the far higher levies imposed on other imports from China. 

Meanwhile, China has privately exempted some companies from reciprocal tariffs Beijing has imposed on U.S. goods, including pharmaceutical products, Michael Hart, head of the American Chamber of Commerce in China, said at a press conference last month.

This week, The Wire looks at the medicines and other pharmaceutical products moving between the world’s two largest economies.

DRUG DEPENDENCIES

American officials have grown increasingly concerned with the country’s dependence on China for pharmaceuticals and their ingredients, especially after the Covid-19 pandemic caused supply crunches for crucial medical equipment. China now supplies almost a quarter of the United States’ pharmaceutical imports by volume, and products the U.S. buys from third countries are often reliant on Chinese inputs. Mexico, for example, heavily relies on Chinese ingredients even as its own exports to the U.S. surge.

Many of China’s drug exports tend to be generics, however, which cost less than patented treatments, including brand names like Ozempic. As a result, China is a smaller player when its exports are measured by value rather than weight.

China meanwhile has its own dependence on the U.S., which supplies around 140 drugs to the Chinese market, including Eli Lilly’s weight-loss injection Zepbound and Johnson & Johnson’s cancer treatment ibrutinib, according to Chinese database Insight.

You have this mutual dependence. Each side is discouraged from making pharmaceuticals and medical devices a target for the trade war.

Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations

Supply of these drugs will begin to dwindle if China does not give them relief from tariffs, says Bruce Liu, managing director of Greater China at consultancy Simon-Kucher. “That’s definitely bad news for patients,” he says.

Mainland pharmaceutical companies have made some progress in developing drugs that can compete with Western market leaders, potentially blunting the impact of tariffs. A peer-reviewed study published in the U.S. journal Blood last year found that Chinese company BeiGene’s zanubrutinib, a rival drug to ibrutinib, was more effective than the Johnson & Johnson treatment, for example.

Still, patented drugs sourced from abroad or made by U.S.-Chinese joint ventures tend to be more effective, says Yanzhong Huang, senior fellow for global health at the Council on Foreign Relations.

“You have this mutual dependence,” he says. “Each side is discouraged from making pharmaceuticals and medical devices a target for the trade war.”

China is also highly dependent on imports for diagnostic medical devices such as MRI machines. Imports made up three-quarters of the Chinese market for these devices in 2021, with U.S. suppliers accounting for 27 percent of those, according to the U.S. International Trade Administration.

WESTERN RELIANCE

If the trade war expands to include other countries, as Trump has indicated he wants, China will have a far larger problem on its hands. More than half of the 3,159 medicines on the 2024 national drug list — the medicines reimbursable by China’s public insurance system — are made by Western companies.

China Subsidizes Many Western Drugs

A look at ten of the medicines on China’s national drug reimbursement list made by U.S. and European companies.

Drug	Brand Name	Example	Use	Manufacturer
Liraglutide	Victoza		Diabetes	Novo Nordisk
Dapagliflozin	Farxiga		Diabetes	AstraZeneca
Aflibercept	Eylea/Zeltrap		Age-related blurriness	Bayer/Regeneron
Pembrolizumab	Keytruda		Cancer	Merck
Nivolumab	Opdivo		Cancer	Bristol-Myers Squibb
Trastuzumab	Herceptin		Breast Cancer	Roche
Adalimumab	Humira		Rheumatology/Immunology	AbbVie
Infliximab	Remicade		Arthritis/psoriasis	Johnson & Johnson (via Janssen Biotech)
Etanercept	Enbrel		Arthritis/psoriasis	Amgen
Dabigatran	Pradaxa		Blood clots	Boehringer Ingelheim

Source: 2024 NDRL

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