ICYMI: At Hearing, Warren Stresses Risks of Foreign Investment in U.S. Pharmaceutical Supply Chains, Calls For Transparency

Foreign investment in American pharmaceuticals has increased over 500% in recent years Approximately 80% of the pharmaceutical ingredients and nearly 100% of the raw materials used in U.S. generic drugs are imported Warren: “Without greater visibility into these acquisitions, it is not just national security that could be on the line — Americans’ access to medicines is also at risk.” Video of Exchange (YouTube) Washington, D.C. — At a hearing of the Senate Special Committee on Aging, U.S. Senator Elizabeth Warren (D-Mass.) highlighted the risks of foreign investment in U.S. drug manufacturing and urged for greater visibility into ownership and operations of these foreign companies. The United States increasingly relies on foreign nations for its supply of drugs and pharmaceutical products. Approximately 80% of the active pharmaceutical ingredients — required components of generic drugs — and nearly 100% of the raw materials used in U.S. generic drugs are imported from China. This dependence makes the supply chain vulnerable to disruptions and other slowdowns, threatening life-saving care for millions of Americans, including seniors. In 2018, Congress passed legislation to expand the scope of the Committee on Foreign Investment in the United States’s (CFIUS) review of foreign investments to include biotech companies that are critical to U.S. innovation, subjecting them to closer scrutiny for national security risks. Yet reporting from the bipartisan National Security Commission for Biotechnology found numerous instances of foreign-owned companies still acquiring American pharmaceutical and biotech companies without undergoing any review or being approved despite clear national security risks. Nazak Nikakhtar, Chair of the National Security Practice at Wiley Rein LLP and former Assistant Secretary at the Department of Commerce who led the Department’s participation in CFIUS, emphasized the importance of scrutinizing foreign investments in pharmaceutical manufacturing, arguing that companies with links to foreign adversaries must be reviewed to prevent intellectual property theft, risks to upstream and downstream supply chains, and predatory bankruptcy of American companies. “If a foreign adversary invests in the United States, we’ve seen so many instances of them creating disruptions to upstream and downstream supply chains, or actually bankrupt a company, take all that capability and offshore it, so we don’t have it in the United States,” said Nazak Nikakhtar . “We need more visibility into what’s happening in these transactions when it has the potential to influence such an important part of our pharmaceutical chain,” said Senator Warren . Yesterday, Senator Warren, along with Rick Scott (R-Fla.), Chair of the Senate Special Committee on Aging, introduced the bipartisan Pharmaceutical Investment Oversight and Accountability Act , which would require the Federal Trade Commission (FTC) and the Department of Treasury to produce a report examining the effects of foreign investment on U.S. drug manufacturing and supply chains. The bill is one provision of Senator Warren’s Pharmaceutical Supply Chain Defense and Enhancement Act to reinvigorate the United States’ pharmaceutical manufacturing capacity and end the nation’s reliance on foreign countries for critical drugs used by millions of Americans. When asked how leveraging federal purchasing power strengthens U.S. pharmaceutical supply chains and pharmaceutical manufacturing capacity, Rush Doshi, Director of the China Strategy Initiative at the Council on Foreign Relations, affirmed, “Finding a way to leverage the procurement power of the government and its ability to set standards across the industry is indispensable to solving this problem and creating predictable, stable demand, which brings on more supply.” “We’re in an emergency situation, and we need to be using all the tools we have to make more medicines here at home, and that should include federal contracting and procurement policy,” concluded Senator Warren. Transcript: Behind the Label: Foreign Ownership and Control in America’s Drug Supply Chain. U.S. Senate Committee on Aging July 15, 2026 Senator Elizabeth Warren: Thank you, Mr. Chairman. So I appreciate the attention that the chairman and the ranking member have given to scrutinizing the United States’ dependence on foreign-made pharmaceuticals and on the impact that has on seniors’ access to medicine. It’s just powerfully important, and you all have been really ringing the alarm bell on this, and I appreciate it. I am also especially glad that today’s hearing focuses on a part of the problem that receives a whole lot less attention, and that’s the impact of foreign investment in U.S. manufacturing capacity. Foreign direct investment in American pharmaceuticals and medicines has skyrocketed from just over 89 billion in 2020 to nearly 566 billion in 2024. That is an increase of over 500 percent in just that short time. At the same time, countries like China are now outpacing the U.S. in drug licensing and research and development, challenging America’s leadership in biomedical innovation. And that’s why we have the Committee on Foreign Investment in the United States (CFIUS), whose job it is to investigate these investments for national security risks. Now, Ms. Nikakhtar, you led the Department of Commerce’s participation in CFIUS during your time in government. Why is it important to scrutinize foreign investments in pharmaceutical manufacturing? Hon. Nazak Nikakhtar: Well, there’s a number of reasons, and I think—thank you for that question—so, one important reason is to see, look behind the veil. If it’s a company that has actually links to foreign adversaries, somebody has to look at that. It might not be readily apparent, but the U.S. government needs to look at it. The other one is really important. It’s not always about IP theft. If a foreign adversary invests in the United States, we’ve seen so many instances of them creating disruptions to upstream and downstream supply chains, or actually bankrupt a company, take all that capability and offshore it, so we don’t have it in the United States. And these are just examples, but the realm of predatory FDI into the United States that foreign adversaries do, and our allies don’t do that. That’s the important thing. It’s a pattern we see over and over again with foreign adversaries. We need to review it, but also importantly, we need to ban those transactions. Senator Warren: This is a really great point, and I’m just going to start with something that’s just even more threshold to get started. We need greater visibility into it. Ms. Nikakhtar: Much greater visibility. Senator Warren: We need to be able to see what’s happening with these acquisitions, and obviously it’s not just national security that’s at risk here. It’s whether or not Americans get access to essential medications. Now, that is the essential reason behind why Congress passed legislation back in 2018, during the first Trump administration, that expanded the scope of CFIUS’s review to better capture foreign investment in the biotech companies that are so critical to U.S. innovation. But here’s what troubles me: a recent report from the bipartisan National Security Commission for Biotechnology found numerous instances of foreign-owned companies still acquiring American pharmaceutical and biotech companies without undergoing any review whatsoever. Ms. Nikakhtar, why are biotech and life science acquisitions still falling through the cracks? We actually changed the law on this. Why is this still happening? Ms. Nikakhtar: There’s a number of reasons. I’ll mention the key. Usually, and I see this over and over again, and it makes me want to pull my hair out, I’m surprised I have any hair left. Congress legislates and gives the executive branch comprehensive authority, and the executive branch self-limits its implementation of those authorities. And so it constrains all the authority that Congress gives it. That is what happened with FIRMA. Number two, there’s a lot of transactions that are simply just voluntary to CFIUS. So companies can elect not to notify the U.S. government, and how will the U.S. government find out about it? And number three, CFIUS jurisdiction doesn’t extend to most greenfield investments, joint ventures. So guess what? How’d China circumvent CFIUS? It goes down those avenues where CFIUS doesn’t exist. They know the lawyers will hire. They go, “Hire them. Help me craft this to circumvent CFIUS jurisdiction.” And there’s no way we can find out. Senator Warren: Well, it’s obvious that there is a lot of work to do at a minimum. We need more visibility into what’s happening in these transactions when it has the potential to influence such an important part of our pharmaceutical chain. So today, I think Chairman Scott and Ranking Member have already talked about it, but I’m going to do it one more time. Chairman Scott, Ranking Member Gillibrand, and I are introducing a bill to do just that. The Pharmaceutical Investment Oversight and Accountability Act would require the federal government to uncover who owns and controls key parts of our drug supply chain and then to investigate the effect of foreign investment on our ability to make essential medications and maintain innovation right here at home. Now, I’m glad we’re doing this, but frankly, we shouldn’t stop there. The bill is one provision in my larger Pharmaceutical Supply Chain Defense and Enhancement Act , which would pair oversight of foreign investment in the U.S. pharmaceutical industry with greater use of federal purchasing power to create a sustained demand so we can make these markets work domestically. Mr. Doshi, how would leveraging federal procurement power make our pharmaceutical supply chain more resilient and strengthen domestic pharmaceutical manufacturing capacity? Rush Doshi: Thank you, Senator Warren, and thank you for your leadership on this issue. I’ll be very brief in my answer. The U.S. government has incredible purchasing power, but right now we effectively focus on low cost, not resilience and not quality. And so, as a result, people are not incentivized. Purchasing groups are not incentivized to purchase, you know, with any knowledge of upstream KSM or API dependency. That means they buy, perhaps, into the Chinese dependency that we already have, and that’s a huge problem. It could change, and it wouldn’t necessarily be that expensive to change it. For many of these generic drugs, we’re talking about differences in price of pennies on the dollar. So, finding a way to leverage the procurement power of the government and its ability to set standards across the industry is indispensable to solving this problem and creating predictable, stable demand, which brings on more supply. Senator Warren: Yeah, I really appreciate it. I think that’s exactly right. The Pharmaceutical Investment Oversight and Accountability Act is a really important place to start, but cracking down on foreign investment alone is just one tool in the toolbox. We’re in an emergency situation, and we need to be using all the tools we have to make more medicines here at home, and that should include federal contracting and procurement policy. So, I look forward to continuing to work with my colleagues on this, and hope we can advance some serious legislation here. Thank you all for being with us. Thank you. For years, Senator Warren has worked to end the United States’ overreliance on foreign-made pharmaceuticals and boost the nation’s domestic manufacturing capacity: In July 2026, Senators Elizabeth Warren (D-Mass.), a member of the Senate Special Committee on Aging, and Rick Scott (R-Fla.), Chair of the Senate Special Committee on Aging, introduced a bipartisan push to urge regulators to investigate foreign investment in the U.S. pharmaceutical industry. The lawmakers today announced the Pharmaceutical Investment Oversight and Accountability Act, legislation to require the Federal Trade Commission (FTC) and the Department of Treasury to produce a report examining the effects of foreign investment on domestic pharmaceutical manufacturing capacity and supply chains. In October 2025, at a hearing of the Senate Special Committee on Aging, U.S. Senator Elizabeth Warren (D-Mass.) raised concerns about the vulnerabilities of the U.S. drug supply chain, highlighting the risks of foreign-made pharmaceuticals and advocating for greater investments in U.S. manufacturing. In March 2025, at a hearing of the Senate Armed Services Committee, U.S. Senator Elizabeth Warren (D-Mass.) questioned Mr. Keith M. Bass, nominee for Assistant Secretary of Defense for Health Affairs, on the Department of Defense’s (DoD) pharmaceutical supply chain vulnerabilities . Mr. Bass committed to purchasing essential drugs from domestic manufacturers and working to expand DoD’s capabilities of manufacturing essential drugs in-house. In December 2024, Senators Elizabeth Warren (D-Mass.) and Tina Smith (D-Minn.) reintroduced the Pharmaceutical Supply Chain Defense and Enhancement Act , a bill to reinvigorate the United States’ manufacturing capacity and end the nation’s reliance on foreign countries for critical drugs used by millions of Americans. In October 2024, Senators Elizabeth Warren and Marco Rubio (R-Fla.) reintroduced the United States Pharmaceutical Supply Chain Review Act , legislation to require the Federal Trade Commission, in consultation with the Department of Commerce, to produce a report on the impacts of foreign investment in the United States’ pharmaceutical industry. In September 2024, Senators Elizabeth Warren (D-Mass.), chair of the Senate Armed Services Subcommittee on Personnel; Rick Scott (R-Fla.), Ranking Member of the Senate Armed Services Subcommittee on Personnel; Marco Rubio (R-Fla.), Chris Murphy (D-Conn.), Joni Ernst (R-Iowa), and Mike Rounds (R-S.D.) wrote to the Department of Defense (DoD) seeking an update on its pharmaceutical acquisition strategy following the decision in Acetris Health, LLC v. United States (Acetris), which loosened requirements on federal agencies to preference American-made products in purchasing decisions. The lawmakers raised concerns about the decision’s potential to increase DoD’s reliance on foreign pharmaceuticals. In April 2024, while chairing a hearing of the Senate Armed Services Subcommittee on Personnel, Senator Elizabeth Warren questioned officials from the Department of Defense and other experts on efforts to ensure service members are receiving safe, effective medicines. In March 2024, Senators Elizabeth Warren, Marco Rubio (R-Fla.), Richard Blumenthal (D-Conn.), Kevin Cramer (R-N.D.), Joni Ernst (R-Iowa), Mazie Hirono (D-Hawaii), Angus King (I-Maine), Mike Rounds (R-S.D.), and Eric Schmitt (R-Mo.) wrote to the Department of Defense requesting an update on the Department’s efforts to address risks to the military pharmaceutical supply chain. In December 2023, at a hearing of the Senate Finance Committee, Senator Elizabeth Warren highlighted the need for the public manufacturing of generic drugs to address critical drug shortages and ensure access and affordability of prescription drugs for consumers. In December 2023, Senator Elizabeth Warren and Representative Jan Schakowsky reintroduced the Affordable Drug Manufacturing Act to address the skyrocketing price of prescription drugs and increase competition in the generic pharmaceutical market. In June 2022, during the NDAA negotiations, Senator Warren prioritized her bills to help prevent civilian harm, electrify the military’s vehicle fleet, prevent conflicts of interests and corruption at the Department of Defense, prohibit price gouging by defense contractors, expand medical care for military families, lower the costs of prescription drugs, and reduce America’s reliance on foreign countries for critical drugs. In December 2021, Senators Elizabeth Warren and Marco Rubio (R-Fla.) sent a letter to Gregory Kausner, who was performing the duties of Under Secretary of Defense for Acquisition and Sustainment at the Department of Defense (DoD), urging him to address DoD’s overreliance on pharmaceuticals produced abroad . In November 2021, Senators Elizabeth Warren and Marco Rubio introduced the Strengthening Supply Chains for Servicemembers and Security Act to address the national security risk posed by the United States’ reliance on foreign entities for pharmaceuticals. In April 2021, Senators Elizabeth Warren and Tina Smith reintroduced the Pharmaceutical Supply Chain Defense and Enhancement Act — comprehensive legislation that takes bold steps to reinvigorate the United States’ manufacturing capacity and end the nation’s reliance on foreign countries for critical drugs used by millions of Americans. In September 2020, Senators Elizabeth Warren and Tina Smith (D-Minn.) wrote to President Donald Trump raising questions about the failure of his recent Executive Order to address the nation’s overreliance on foreign nations for key drug products and asking that he support their legislation, which would address this serious problem. In March 2020, Senators Warren and Rubio introduced bipartisan legislation to combat America’s supply chain risk and dependence on China for pharmaceuticals. In December 2019, Senator Elizabeth Warren, along with Senators Tom Cotton, Mitt Romney, and Tim Kaine, sent a letter to Secretary of Defense Mark Esper raising concerns about the national security risks posed by U.S. reliance on foreign-manufactured pharmaceutical products. In June 2020, Senators Elizabeth Warren and Marco Rubio (R-Fla.) introduced the United States Pharmaceutical Supply Chain Review Act to direct the Federal Trade Commission (FTC) and the Secretary of the Treasury to conduct a study on the United States’ overreliance on foreign countries and the impact of foreign direct investment on the U.S. pharmaceutical industry. In December 2019, Senators Elizabeth Warren, Tom Cotton (R-Ark.), Mitt Romney (R-Utah), and Tim Kaine (D-Va.) sent a letter to Secretary of Defense Mark Esper raising concerns about the national security risks posed by U.S. reliance on foreign-manufactured pharmaceutical products. ###