The Daily Signal - Our Pharmaceutical and Medical Supply Chain Poses National Security Issue, Says Rep. French Hill

Episode Date: April 29, 2020

Rep. French Hill, R-Ark., recently proposed legislation to ensure that the U.S. expands its medical supply chain to decrease dependence on foreign manufacturers, including those in China.  Hill joins The Daily Signal Podcast to discuss why is it important to do so, incentives to make it happen, whether decreasing dependence on China for pharmaceuticals would create disruptions and shortages, and more. We also cover these stories: The Centers for Disease Control says social distancing recommendations have now expanded to dogs and cats. The House of Representatives will not be coming back to Washington, D.C., next week as previously thought.  Quest Diagnostics will be providing the ability for anybody to order a coronavirus antibody test. The Daily Signal podcast is available on Ricochet, Apple Podcasts, Pippa, Google Play, or Stitcher. All of our podcasts can be found at DailySignal.com/podcasts. If you like what you hear, please leave a review. You can also leave us a message at 202-608-6205 or write us at [e-mail]. Enjoy the show! Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Daily Signal podcast for Wednesday, April 29th. I'm Virginia Allen. And I'm Rachel Del Judas. Congressman French Hill of Arkansas recently released legislation to ensure that the U.S. expands its medical supply chain so that the U.S. is less dependent on foreign manufacturers like China. He joins me on the Daily Signal podcast to talk about how this would work. Don't forget, if you're enjoying this podcast, please be sure to leave a review or a five-star rating on Apple Podcasts. and encourage others to subscribe. Now on our top news. The Paycheck Protection Act received another $310 billion on Monday to provide loans to small businesses so that they can make payroll. But concerns have been raised that larger corporations have applied for

and received loans under the Paycheck Protection Act. On Tuesday, Treasury Secretary Stephen Mnuchin joined CNBC to address these concerns and explain the Treasury Department's new protocols to ensure that only those who need the forgivable loans are the ones receiving the funding. It is unfortunate that there's a small number of companies that have created a lot of publicity that took loans. I think it was inappropriate for most of these companies to take the loans. It was clear there was a certification. We don't think that they ever should have been allowed to. We put out an FAQ clarifying the certification in saying that if they paid back the loans in two weeks so that we could reprocess that money, they would have no liability.

Otherwise, they would have liability. And I must say I'm encouraged by the number of people that have paid them back. I never expected in a million years that the Los Angeles Lakers, which I'm a big fan of the team, but I'm not a big fan of the fact that they took a $4.6 million loan. I think that's outrageous, and I'm glad they've returned it or they would have had liability. And let me just say, I'm going to be putting out an announcement this morning that for any loan over $2 million, the SBA will be doing a full review of that loan before there is loan forgiveness. So we will make sure that what was the intent for taxpayers is fulfilled here. But let me just say again, the program, overwhelming success, a million of the loans so far are for companies under 10 people. people. The House of Representatives will not be coming back to Washington, D.C. next week as previously

thought. We will not be meeting next week, majority leader Steny Hoyer told reporters. The House physician's view was that there was a risk to members that was one he would not recommend taking. Hoyer instead said that lawmakers will not be asked to return to the nation's capital until the next wave of coronavirus relief legislation is ready for a vote. On Friday, President Trump signed a 480 for a billion dollar coronavirus relief package to give more funding to hospitals and for testing as well as for small businesses. Today brings some more positive news on meat supply concerns. Tyson issued a statement earlier this week, warning that closed processing plants would

quickly lead to meat shortages in the grocery stores. But on Tuesday morning, President Trump told reporters in the Oval Office that he plans to sign an executive order to address the, quote, liability problem. and keep plants like Tyson's open during COVID-19, as reported by the Hill. Despite major concerns surrounding meat shortages, the president said per the hill, we'll be in very good shape. We're working with Tyson, which is one of the big companies in the world, and we always work with the farmers. There's plenty of supply.

Quest Diagnostics will be providing the ability to order a coronavirus antibody test online, eliminating the need for a visit to a doctor's office to be tested. The $19-dollar test shows whether someone has been exposed to or potentially had the coronavirus and develop the antibodies to fight the infection. It doesn't guarantee immunity, but physicians say a positive antibody test indicates that a patient may have some level of protection against reinfection per CNBC. In a statement, Quest that will review test requests and issue if approved. The Centers for Disease Control says social distancing recommendations have now expanded to dogs and cats.

That's right. After several dogs and cats tested positive for COVID-19, the CDC released recommendations advising Americans to, quote, treat pets as you would other human family members. Do not let pets interact with people or animals outside the household. If a person inside the household becomes sick, isolate that person from every person. everyone else, including pets. The CDC added that at this time, there is no evidence that animals play a significant role in spreading the virus that causes COVID-19. Based on the limited information available to date, the risk of animals spreading COVID-19 to people is considered to be low. Now stay tuned for my interview with Congressman French Hill of Arkansas about the medical supply chain in China. Our top priority at the Daily Signal is to

ensure that you have the most accurate information regarding COVID-19. Here's an important message from the White House. We are dealing with an unprecedented public health crisis with coronavirus, otherwise known as COVID-19. We're working around the clock to develop treatments and vaccines to combat the disease. We have taken an unprecedented all of government and all of America approach to combat the COVID-19 outbreak. FDA is working around the clock to help innovators around the country develop medical products for Americans and providers. I'm joined today on the Daily Signal podcast by Congressman French Hill of Arkansas. Congressman Hill, it is great to have you on the Daily Signal podcast.

Rachel, it's great to be with you. Thanks for the invitation. Well, thank you for making the time. We do appreciate it. You recently introduced legislation to ensure that the United States is less dependent on foreign manufacturers like China. Can you tell us how your legislation would be? work. You bet, and I want to thank Heritage for its good research here. I thought your interview with Tori Smith was particularly good. The supply chain is a national security asset, and members of Congress on both sides of the hill are thinking about, well, how should we approach it? What's the right way to consider that, considering we have a free market economy, and obviously we have

sources of supply around the world for all countries. So my view was let's amend the Defense Production Act, the DPA. Recently, President Trump undertook his authorities under the DPA to compel greater ventilator construction in the United States. So the Defense Production Act, dating back to the Korean War and the Truman administration, allows America to step up resources in time of war for national security purposes in domestic construction. And my vision was let's add to that planning node medical supplies, both pharmaceutical agreements, medical equipment, and what we think of now is PPE, personal protective equipment,

and other medical supplies, and make sure that we have a diversified supply chain there. My bill would add those items to the Defense Production Act as a national social service. security matter and would ask the president to produce a strategy around that. Here, he would assess those supply chains. How much is already in the United States? How much is in countries friendly to the United States? How dependent are we on active drug ingredients, Finnish drugs, medical supplies, medical devices? And then put that strategy in place so that we don't have the situation that I believe we had this first quarter of 2020 when the tide went out and we found out we really didn't have any swimming trunks on when the water receded. We really didn't have

the kind of thoughtful planning I believe that we should have had in this area of strategic medical supplies and pharmaceuticals. On that note and talking about being strategic when it comes to our medical supply chain, why is it so important to be less reliant on foreign manufacturers like China. If your supply chain is in an authoritarian regime, not a market economy, economy with a lot of government intrusion in it, it means it's not as transparent. It means it's not as market-driven as say we are in the U.S. And while the FDA regulated pharmaceutical ingredients are spread around the world, as Tori has outlined in her great work for heritage, you still have these potentials for log jams. And I think the point is to have a strategic study as a part of the Defense

Production Act so that we really know where we are, where we need to be, and how we could ramp up production here more easily instead of it being a mystery, which it was as we got into this pandemic. Well, one of the provisions in your legislation is for the president that he could provide incentives to ensure that the availability of medical articles that are used for essential national defense? What do you think some of these incentives that you outlined could look like? Well, they might be R&D incentives. They might be locational incentives to bring production back to the United States. They might be purchase order incentives from the national stockpile or from DOD, for example.

There might be a variety of things, and I think that's what would be good in the bill is to have the executive branch study those best ideas and put forward recommendations. We've heard some people say and talk about how decreasing dependence on China for pharmaceuticals could create a risk that would cause disruptions or shortages that would jeopardize different supply chains or different accesses to medication. What is your response when people talk about those kind of concerns? Well, that's why the SAVE Act that I proposed is not China specific. It's asking the president to have a strategic approach for national security purposes

to our pharmaceutical and medical supply chain for that particular purpose. We want to take advantage of innovation around the world. We want to take advantage of manufacturing capacity around the world. so it's not meant to disrupt that supply chain, but it is meant to strategically make sure that we have redundant supply chains in critical ingredients. I think the most recent thing when you look in the press here over the last few weeks, you see that 100% of ibuprofen for whatever reason is located in China. That would be a non-diverse supply chain of something that's a very common ingredient in every household in America. So those are the kinds of things that one would think through and offer a strategy that took into account all the potential manufacturing capacity around the world where it's located. And we do this now in national security related aviation production, technology production.

So this is not unusual. I think what's unusual is that we didn't have it done previously. Another provision that's in your bill allows the president explicit authority, as you've talked about, to use the DPA to protect supply chain. allowing entities to increase the security of supply chains in their activities. And if this were to happen, practically speaking, what would that look like down the road? Well, I think if you have a strategy of having redundant supply chains, then you'd have the ability to switch production from one country and one plant to another more easily. So from that point of view, that when you want to ramp up or you want to isolate supply chain,

you have a strategy to do that, that's driven by the private sector. driven by private sector innovators so that they need to turn that switch, they can. So looking at what's happened with China and coronavirus, what do you think the America's relationship should look like with China going forward? We've seen different people from both sides talking about how changes need to be made. And so going forward, what are some things you would suggest for the U.S.-China relationship? Well, we've been making many of those changes over the last three years during the administration of President Trump. We've seen SIF the Committee for Investment in the United States broadened its analysis of intellectual property and joint ventures,

which affects not just China, but Chinese companies particularly. We've tried in the House Financial Services Committee to graduate China from its ability to borrow from the World Bank, for example. We've encouraged the World Bank to have more transparency in China's predatory pricing as a sovereign country in the third world. So my view of it is when you look at national security policy in the South China Sea, when you look at the pandemic medical supply issue, when you look at one belt, one road, and China's predatory economic policies, China's reputation now in Europe and Asia and here in the United States is in tatters. I think they really are going to dig out of a deep hole of what Xi's pivot in making China a more aggressive rival economy in the world over the last few years. So I believe that America will continue this approach of trust but verify in a number of categories when it refers to China, economic, national security, diplomatic, all of the above. Speaking of, you know, trusting and verifying and moving forward,

how do you think China should be held accountable and the Chinese Communist Party should be accountable for their role in what's happened? Well, there's no doubt that an investigation leads to ensue on what do the Chinese know. When did they know it? When did they share that with the World Health Organization and other international bodies and bilaterally with countries, including the U.S. We know we were told basically the genetic makeup of this virus around January 12th. The question I think we should have is, how much earlier should we have known so that we could have been better prepared in the world, been better prepared?

And that's why I appreciate President Trump's skepticism about the world health organization and its influence by China. I think that's something that should be looked at as well. Well, before coming to Congress, you were an investment manager and founder, chairman, and chief executive office. of the Delta Trust and Banking Corporation, and given your experience in the banking sector, what is your perspective on the Paycheck Protection Program? Well, it was a remarkable task to stand up a $350 billion small business lending program in basically a week, and then in 13 days later, have made over a million loans for that amount of money. From one point of view, it's a stunning achievement of American can-do attitude.

But of course, in any time the government attempts to engage and intervene in the private economy, you're going to have challenges. And so the PPP program, the Paycheck Protection Program, is no exception to that. They had technology programs. They had borrower definitional programs. They had bank understanding of the program. All those things were business challenges around it. But nonetheless, it's helped a lot of small businesses. The Treasury estimates over 30 million Americans were kept in their job by that first tranche of the PPP program. And today, as we record this, $310 billion has been added to that program to help more small businesses,

particularly sole proprietors. How have the people of Arkansas been affected by coronavirus, whether it's looking at the medical and health aspect or the economic impact of coronavirus? What are you seeing in your state? Well, it's been very disruptive here as it has been across the country. As of yesterday, we had about 3,000 cases,

and we've lost 49 Arkansasans through the virus, for which we lament that. But Governor Hutchison has had a go-slow, more prudent approach to shutting down business. So while we've had over 100,000 Arkansans apply for jobless claims, we have a lot of Arkansas still working. The governor's now focused on reopening the economy during May. He's being equally cautious about the reopening approach.

So I'm optimistic that here in Arkansas we have weathered the storm about as well as possible, but it's, as we all know in America, hard work and ingenuity is, what we're all about. But this virus has thrown us for a loop on how fast we can get our economy back to full capacity. Well, looking at what next steps are, I know on last weekend on Friday, the House passed another stimulus bill. And the numbers that came out recently were about, I think, 4 million people in unemployment. So going forward, what would you say our next steps that would be prudent for Congress to take? Well, Rachel, this is a staggering amount of money that Congress has appropriated.

We've appropriated nearly $3 trillion, $60, of what we would spend in any one budget year running the entire federal government. And when you combine that spending and that appropriated money with the ability of the Federal Reserve to leverage it, it's almost $7 trillion that's being injected into the American economy

in just, say, three months or so. So my personal view is we need to assess the appropriated money that we've already contributed to fighting the virus in public health and getting the economy stable before we go and sign up for another spending package. Let's take stock of where we are and what we've accomplished and see how well it's working. And on that note, and lastly, how would you encourage people to talk to their members of Congress about this issue itself and how much has already been appropriated? and while trying to respond, also trying to be fiscally responsible.

So how would you encourage, you know, given your experience in banking and finance, how would you encourage the average person who is very concerned about the economic state of the country to talk about this and share their concern with their lawmakers? Well, we didn't ask for this black swan to sweep across the globe and disrupt the entire economy and particularly disrupt the best economy here in the United States we've had in five decades. So we didn't ask for it. So we have to muster the resources to fight it, fight it effectively, and then get the economy back. I would say all Americans are filled with common sense, and if they know the rules, they will adopt accordingly,

help us get the economy back to full capacity, take care of their families. So I think citizens should contact their representatives and talk about their own personal experience, how they safely got back to church, how they safely got back to work, how they safely taught their kids out of a social distance and yet still maintain a great relationship with all their friends. We have to operate from a community level up to beat this virus and get back to work. Well, Congressman French Hill, it's been a pleasure to have you on the Daily Signal podcast. Thank you so much for joining us. Rachel, thank you and thanks for all the good work you do, my best wishes. And that will do it for today's episode. Thanks for listening to The Daily Signal Podcast.

We do appreciate your patience as we record remotely during these weeks. Please be sure to subscribe on Apple Podcasts, Google Play, or Spotify. And please leave us a review or a rating on Apple Podcasts and give us your feedback. Stay healthy and we will be back with you all tomorrow. The Daily Signal Podcast is brought to you by more than half a million members of the Heritage Foundation. It is executive produced by Kate Shrinko and Rachel Del Judas. Sound design by Lauren Evans, Thalia Rampersad, Mark Geine, and John Pop.

For more information, visit DailySignal.com.