In late November 2015, the U.S.-China Joint Commission on Commerce and Trade (JCCT) was held in Guangzhou, China. Secretary of Commerce Penny Pritzker and U.S. Trade Representative Michael Froman co-led a high-level U.S. government delegation to the high-level dialogue. The Chinese delegation was led by Vice Premier Wang Yang. For the first time in JCCT’s 26 years of history, the dialogue featured a one-day healthcare event attended by senior government officials and business leaders from the healthcare industry in both countries. Titled “Achieving a Successful Health and Healthcare Ecosystem,” the event itself is emblematic of the increasingly multifaceted, shared interests in the U.S.-China relations.
As a member of the U.S. delegation, I reminded participants of the event how Guangzhou has been a witness to the growing bilateral cooperation over healthcare. Beginning in 1835, U.S. missionary doctors helped local people in Guangdong establish the first hospitals of modern Western medicine, the first medical and nursing schools, the first public health programs, and the first women’ health and rights programs. The process was interrupted after 1949, but resumed with the Sino-American rapprochement in the early 1970s. As a matter of fact, physicians were among the first groups in the U.S. granted permission to visit China. Bilateral cooperation over health expanded in length and strength after 1979, when the two sides signed the Health Protocol.
Unlike security-related issue areas, the dynamic of U.S.-China health cooperation is largely insulated from the fluctuations of domestic politics and strategic foundations. Indeed, even in the post-Cold War era, U.S.-China health cooperation continues to grow in breadth and depth. In part, this is because health is a politically less sensitive area where each side feels strongly about. Shared health concerns challenge the two countries to promote jointly the welfare of their people. Already, we have seen effective bilateral cooperation under way in HIV/AIDS prevention and control, in food and drugs safety, and in addressing international public health emergencies.
Transformation in both countries’ healthcare sectors are generating extra business opportunities. Dr. Michael Lu of U.S. Department of Health and Human Services identified five changes in the U.S. healthcare system: improved access through the Affordable Care Act, payment reforms, delivery systems transformation, health information technologies, and quality improvement and innovation. Similar dynamics can be found in China. With the government targeting healthcare as a social and strategic priority, the healthcare market is rapidly expanding. China now trails the United States as the second largest market of health industry in the world. It is estimated that five years from now the size of China’s health service industry—which covers medical care, pharmaceutical products, healthcare products, medical devices, and health management—would reach 8 trillion RMB (or $1.3 trillion), up from less than 1.7 trillion RMB in 2012. This would mean an annual growth rate of 21 percent between 2012 and 2020.
But U.S.-China cooperation in healthcare is not just about market opportunities: it is also about how to improve health and well-being of the people in both countries. The two objectives are not necessarily mutually exclusive, but without proper regulation and balance of interests, single-minded pursuit of business opportunities may exacerbate the problem of affordability, thereby defeating the very purpose of the healthcare reform. Already, demographic and epidemiological transitions against the background of moving toward universal health coverage have raised concerns regarding financing and cost control in both countries. The growing cost of healthcare highlights the importance of cooperation in preventive care. Over the past years, both countries have been collaborating over tobacco control research and tobacco surveillance. But the areas of cooperation can be further expanded to include health management, environmental health, healthy life style promotion, and encouraging the private sector and social forces in health education and risk reduction.
Unrealized potential for cooperation can also be found in research and development (R&D). With an annual output of 800,000 tons of pharmaceutical ingredients, China is the world’s leader in global active pharmaceutical ingredient (API) manufacturing and exports. Its ability to produce and supply APIs is of critical importance to formulators in the United States. Furthermore, more than 500 contract research organizations (CROs) in China are providing preclinical and clinical research services to multinational pharmaceuticals.
The complementarity between the two robust pharmaceutical industries opens doors for cooperation in the development of vaccines and new drugs for addressing public health emergencies. Each side is keenly aware of the importance of surge capacity during a disease outbreak: life-saving vaccines and treatments must be made available for a large population in a very short period of time. United States is a leader in innovation, but it may not be able to rapidly produce enough amount of vaccines or medicines to meet the demand. For example, Zmapp (a cocktail of antibodies developed by American scientists) was the most promising Ebola therapy, but a limited supply of the medicine was quickly exhausted during the 2014 Ebola outbreak. Thanks to the Chinese government grants and a licensing agreement with the drug’s intellectual property (IP) rights holder, a small private Chinese Company, Beijing Mabworks, raced ahead and produced about 100 doses of MIL77, making more life-saving drugs available in the Western Africa. Indeed, MIL77 is believed to have saved the life of a British military nurse in March 2015.
Cooperation by definition is not a one-way street. As Vice Premier Wang Yang noted at the event, in order to ensure effective Sino-U.S. cooperation over healthcare, China would ease the market access and strengthen the efforts in IP protection, but it also hoped the U.S. side to consider positively China’s concerns in patent protection duration and corporate social responsibilities. Policymakers and business leaders of both sides are challenged to seize the new opportunities and promote the bilateral cooperation to a new high, as this is good for not only the health of the bilateral relationship, but also the health and well-being of people in the two great nations.
