Exiger CEO Brandon Daniels Testifies on Pharma Supply Chain Risks | U.S. Senate Hearing Replay

Chairman Scott, Ranking Member Jill Brandon, distinguished members of the committee, thank you for the opportunity to testify today. For 20 years, I have worked with pharmaceutical and medical device companies supporting them through some of the most significant crisis management and litigation matters affecting their product development, research, and supply chains. During the COVID-19 pandemic, I served on the White House's joint acquisition task force where I worked alongside federal partners to secure PPE, medical devices, and life-saving pharmaceuticals. That experience underscored for me the fragility of our pharmaceutical supply chains and the urgent need for reform. In my role at Exiger, I'm leading the development of artificial intelligence to map supply chains down to their raw material origins. This work reveals in precise detail the vulnerabilities hidden in our health care system. The scope of this problem is enormous. America's medicine cabinet is no longer made in America. Nearly three quarters of the essential medicines used in the United States are sourced overseas. India now supplies about half of the generic drugs we consume. But 80% of the active pharmaceutical ingredients that make those drugs possible come from China. In fiscal year 2024, Chinese firms supplied 77% of India's penicillin G and 94% of its 6-APA, which is the indispensable intermediate for penicillin-derived antibiotics. This concentration creates a dangerous single point of failure for every drug that every hospital, clinic, and pharmacy in this country depends on. That means a Medicaid prescription filled in Ohio or a Medicare prescription processed in Florida can often be traced back to a Chinese supplier. The choke points for our most basic medicines are controlled by Beijing. And we are not just dependent. We are actively financing that dependency. In 2024, Medicaid reimbursed more than $150 million to a single generic drug company that sourced ingredients from at least six Chinese firms tied to forced labor and national security concerns. Dual-eligible patients, who represent just about 14% of Medicaid enrollment but consume more than a third of its spending, are the most exposed to this fragile system. Every taxpayer dollar spent on these medicines strengthens the leverage Beijing has over our health care system. The consequences for seniors and all American citizens cannot be ignored. As Chairman Scott mentioned, contaminated eye drops from India have left American citizens and seniors permanently blind. Blood pressure and diabetes medications imported from Asia have been recalled after testing positive for carcinogenic impurities. These are not outliers. Over 30% of recent FDA import alerts involve Chinese producers and another 16% involve Indian suppliers. These are the very countries we rely on most. Even more troubling, our data shows that forced labor is woven into these pharmaceutical supply chains. Chinese state-owned enterprises with documented links to Uyghur forced labor in Xinjiang supply raw materials and active ingredients that ultimately find their way into drugs consumed by Americans. This creates both an economic competitiveness barrier through labor arbitrage and a quality hazard for US pharmaceutical supply chains. The weakness in our medicine cabinet is also a weakness in our national security. More than 54% of the Department of War's pharmaceutical supply chain is classified as high or very high risk because of reliance on foreign suppliers. Chinese state media has openly suggested that drug exports could be withheld as a weapon in conflict. In that scenario, the most basic medicines in our hospitals, our pharmacies, our military stockpiles could become tools of coercion. No adversary needs to fire a shot if they can choke off our access to antibiotics or insulin. The path forward will not be simple, but it is clear. We must expand domestic production of critical medicines, particularly antibiotics and essential generics. We must diversify supply chains to trusted allies and ensure no federal program relies on a single country. We must enforce forced labor laws so that no American patient consumes medicine produced through coercion. And we must demand transparency at every level using modern mapping and monitoring to stress test these supply chains before they fail. The stakes could not be higher. Every time a senior fills a prescription, every time a service member receives treatment, every time our children and grandchildren need to fight an ear infection, there is a real chance the supply chain leads back to a potentially compromised source. Thank you for your time this afternoon. I look forward to answering any questions you may have.