Nonprofit Report Links Pharmaceuticals to Forced Labor

Oct. 15, 2024
By: Pietro N. Bianchi

C4ADS, a nonprofit that investigates illicit networks, published a report, named Side Effects, on forced labor that draws connections between the global pharmaceutical industry and China’s Xinjiang Uyghur Autonomous Region (XUAR). C4ADS analysts mapped out pharmaceutical supply chains with analytical technologies by connecting drug production license data, corporate records, and trade data.

As some of you may be aware, the Uyghur Forced Labor Prevention Act (UFLPA) establishes a rebuttable presumption that imports made (in whole or in part) in the XUAR are made from forced labor. C4ADS reports that licensing records show 76 pharmaceutical products exported from China are only produced in XUAR. This number includes traditional Chinese medicine (45), traditional Uyghur medicine (14), conventional medicines (14), and PMU estrogen products (3). The PMU estrogen products, which are used in hormone replacement therapy products for woman experiencing menopause, account for approximately 24% of the world’s supply.

C4ADS reported on 54 other pharmaceuticals produced across China with a substantial presence in the XUAR. While production levels could not be ascertained, C4ADS noted that 10 percent or more of all licenses for these products were for production in the XUAR. C4ADS highlight a few other risk areas: two XUAR-based pharmaceutical companies are authorized by the FDA to import pharmaceuticals into the United States; major Chinese pharmaceutical companies were linked to human rights abuses; products were shipped to other countries for further manufacturing, which obscures XUAR origin; and XUAR-based entities are registering in other Chinese provinces and other countries, which also obscures XUAR origin.

Side Effects calls on governments, policy makers, and private actors to address these risks with various actions, including adding companies the UFLPA Entity List, intergovernmental cooperation, and dedicating more resources to supply chain analysis. Non-governmental reports have led to government action in the past, which you can read about here and here. Given the breadth and scope of C4ADS’ findings, it would be prudent for pharmaceutical importers to investigate their supply chains immediately. Remember, there are no mitigating factors under the UFPLA – if goods are made in whole or in part with forced labor, they cannot enter the U.S. So, best practice is to audit supply chains before your goods are targeted by CBP.

If you have questions about supply chain diligence, forced labor, or the UFLPA do not hesitate to contact an attorney at Barnes Richardson, & Colburn LLP.