Dangerous substandard medicines
An Increasing Global Problem

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Article Highlights

  • As more manufacturers source their chemicals from #China, the problem will get worse

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  • Nearly 80 percent of active pharmaceutical ingredients originate outside the US

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  • Patients should realize that not all the drugs they take, even allegedly bioequivalent generics, will in fact work perfectly

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No. 6, July 2011

Legal but poorly made, or substandard, drugs can be lethal. The problem is most prevalent in emerging markets, where gross flaws in production, especially by domestic producers selling only in local markets, are easily detected by simple quality-control tests. These problems will worsen as more emerging countries, often supported by aid agencies, develop their own manufacturing capabilities. Flaws are rarer and more difficult to detect in developed countries, but they still pose a significant danger to public health. The US Food and Drug Administration (FDA) recently released its "Pathway to Global Product Safety and Quality," a report that candidly explains that the FDA cannot adequately oversee the safety of chemicals manufactured overseas and imported into the United States. Some generic drugs are not equivalent to innovator products, and while they are effective for most patients, they can be fatal for others. Such production flaws will be exacerbated by lower-quality chemical inputs from China, the world's largest chemical supplier. While China's products are always cheap, they are not always high quality; even perfectly formulated products may be lethal if the ingredients are suspect. Drug shortages and adverse health outcomes will increase as a result, even in the United States.

Key points in this Outlook:

  • Many emerging-market chemical and drug producers do not follow good manufacturing practices. A few of their low-quality products can enter the mainstream supply chain and find their way into US markets.
  • These problems will get worse as the world relies more on imports from China. Nearly 80 percent of active pharmaceutical ingredients originate outside the United States.
  • Experts indicate that as much as one-quarter of ingredients purchased in China by Western companies come from unknown sources.
  • The risks of importing low-quality products have already led to deaths of US patients and shortages of life-saving drugs in US hospitals and clinics.


Dangerous medicines are a global problem. Media attention often focuses on the threat of counterfeit products--those intentionally made to deceive the patient--but substandard drugs that are legally but poorly produced tend to get a free pass, even when they kill.

Demand for pharmaceuticals in middle-income and developing countries is increasing rapidly. Some major Western companies, like Bayer and Novartis, now generate 25 percent of their revenue from emerging markets, up from single-digit percentages only a decade ago.[1] Internationally traded generic drugs, most commonly from India, not only have entered these markets, but also tend to dominate them. Recently, many countries--sometimes supported by Western aid agencies--have begun to develop their own pharmaceutical-production capabilities.

In principle, expanded drug production is good for consumers, since increased competition causes prices to fall, thereby increasing drug access and, ultimately, patients' welfare. Increased access to inexpensive products is only beneficial to the patient, however, if the products are "bioequivalent" (act in the same way in the body) to the approved products they are copying.

This Outlook explores the threat posed by substandard drugs, analyzing original data on the prevalence of substandards in emerging markets. Clinical case reports provide evidence that no country is immune from substandards, and the problem is likely to get worse in the near future.

What Is a Substandard Drug?

Substandard drugs are medicines made by a licensed manufacturer supposedly adhering to pharmaceutical regulatory standards, which nevertheless fail to produce the correct therapeutic effect in the patient. This is due to various causes, including basic errors such as incorrect chemical ingredients or ingredient ratios. Our empirical studies revealed many errors of this type.[2]

More complicated problems, which our analysis could not detect, include tiny, but potentially lethal, impurities and poorly chosen excipients such as inert fillers and dyes, which prevent the active ingredient from releasing as planned in the body. These errors are caused by low-quality production and poor oversight of the often-intricate formulation process.

Richer Emerging Markets and the Developed World

In our analysis of just under two thousand antibacterial and antimalarial drugs procured in nineteen cities in emerging markets, we found that more than 4 percent of the legal products on sale were substandard (over 12 percent failed quality tests, but the majority of these were obviously degraded or counterfeit). The worst offenders were domestic pharmaceutical manufacturers in Africa, followed by smaller producers in India and all producers from China and Vietnam.[3] Products from large Indian, European, and US producers were consistently high quality.[4]

Nearly 80 percent of active pharmaceutical ingredients originate outside the United States.

India provides insight into the factors that contribute to good production. Larger Indian companies perform better than smaller ones, but the best-performing companies come from two states, Maharastra and Andhra Pradesh.[5] Experts agree that these states enforce good manufacturing practices (GMP), whereas other Indian states are less diligent. It is unclear whether tougher regulation drives better performance, or better-performing companies demand better regulation as a barrier to entry, but either way, overall quality is better.

All companies make mistakes, but following GMP should ensure that company systems catch basic errors. Widespread and substantial production errors demonstrate that many emerging-market producers simply do not follow GMP. For example, China reportedly produces many, perhaps most, of the world's fake drugs and allows sloppy production that has killed an indeterminate number of people.[6] It is not surprising, then, that approximately 5 percent of the legitimate products from China we tested had significant quality problems. These oversight problems are dangerous not only to Chinese consumers, but to patients around the globe. Most of the world now purchases chemical inputs, including active pharmaceutical ingredients (API), from China; such slipups and poor oversight of GMP mean that unwary producers, both inside and outside China, may be receiving suspect API.[7]

Our data also suggest that the problem is worse in companies targeting their home market. Domestically produced generics failed quality tests more often than their internationally traded counterparts. We conclude that low quality standards and lack of GMP enforcement need to be addressed by companies and governments in the developing world.

In our sampling of products made by large pharmaceutical companies in well-regulated environments (including the best Indian producers and all producers in the European Union and United States), none exhibited easily detectable problems.[8] The tests we conducted caught only gross failures. Minute differences, which can cause the drug to be ineffective or even lethal, are difficult to detect, even with sophisticated equipment. These problems originate from differences in the drug-approval process.


Innovator Products versus Generics


Figures 1 and 2 demonstrate the variability in API content and impurities of copy versions of docetaxel against the innovator product Taxotere®. A green bar indicates the innovator Taxotere. For all other drugs, which are copies of Taxotere, many with slightly different formulations, a blue bar indicates a "pass" and a red bar a "fail." Passes were determined in line with acceptable pharmaceutical standards.

HPO 2011-07 Figure 1 HPO 2011-07 Figure 1

HPO 2011-07 Figure 2 HPO 2011-07 Figure 2



New Medicines and Generic Versions

Bringing a new medicine to market is an extremely long, expensive, and involved process.[9] Once a drug has completed all the requisite trials and been approved for use, the innovator must present a monograph, or chemical profile, of the drug's contents to establish safe variation limits from the stated contents. It must then show that each batch falls within those limits.

Once the patent of an innovator drug has expired, other manufacturers are allowed to produce the same medicine after providing evidence that the new drug is bioequivalent to the original; these are known as generics. Generic producers benefit greatly from the innovator company's previous research and development, so their job is easier and cheaper, but proving bioequivalence is not a trivial procedure and requires high-level technical expertise.

The US FDA has established an office in China and is increasing investigations of the plants that export to the United States, but at best it can only assess each site once every thirteen years.

Establishing bioequivalence involves matching the monograph the innovator company originally provided in myriad ways. A pill is a delivery device for API, so it must not only transport the API, but also ensure that it dissolves and is absorbed correctly in the patient. Excipients ensure that both solubility (the API dissolving into our aqueous bodies) and permeability (transportation between the cells) occur in the same way as in the original drug. Even small variations may affect patients differently. In the 1970s, Australian regulators noticed that a simple change in a generic antiepileptic drug's excipients made it less effective in some patients and caused side effects not associated with the original drug in others.[10] Now pharmacies in Australia must receive and document explicit approval from a patient before substituting a generic for a brand name, and prescribing doctors may prohibit pharmacies from doing so.[11]

According to a large study of data spanning more than a decade, in the United States the average variance in generic absorption against the originator brand is only 3.5 percent.[12] For most medications, this difference will not affect the drug's efficacy, but this is not the case for all.

Many examples demonstrate that medications copying innovator products may vary in both structure and efficacy.[13]

Glivec. Glivec® is an innovator drug used to treat chronic myeloid leukemia. In the last two and a half years, case studies involving comparatively well-off patients from middle-income countries have demonstrated that copy drugs are ineffective in treating chronic myeloid leukemia in some patients. These copy medications are not proven generics and are not required to pass stringent bioequivalence tests prior to use in hospitals and pharmacies.[14] Some of these medications, such as Imatib, are produced by large reputable pharmaceutical manufacturers--in this case India's Cipla, whose pharmaceuticals regularly pass FDA inspections and meet international regulatory standards (none of Cipla's antibiotics or antimalarials failed basic tests in our study discussed above).

As more manufacturers source their chemicals from China, the problem will get worse.

While Glivec® has demonstrated a "high hematologic, cytogenetic, and molecular response rate and favorable long-term safety profile,"[15] five reported case studies suggest that copy versions, which contain a slightly different version of the active ingredient,[16] are ineffective in some cases. In all five studies, the patient experienced a relapse after switching from the original to the generic medication, and then improved again when put back on the original drug. In one case, an older patient in fragile condition was unable to recover even after the reintroduction of the innovator drug, and he died after the reintroduction.

Cyclosporine. Kidney-transplant patients are normally given cyclosporine to minimize the risk of organ rejection, but studies on particular generic products have shown them to be far less effectual than the original.[17]

Psychotropic Drugs. There is a marked effect in psychotropic drugs in particular. A major literature review of reported adverse events following the switch from an original to a generic drug advised that patients being switched to a generic drug should be closely and individually monitored throughout the transition.[18]

In another study of 260 epileptic patients who were switched from an original to a generic, 105 (42.9 percent) experienced increased seizure frequency or other negative side effects, including headaches, fatigue, and aggression.[19] The patients who experienced adverse results were switched back to the innovator drug, and the symptoms went away. Multiple reports suggest that antiepileptic drugs are susceptible to variations in bioavailability.[20] In a number of examples, epilepsy sufferers reported increased seizures when they switched to a generic, but they regained control after taking the original drug.[21]

In a report on the generic schizophrenia medication clozapine, researchers found that 40 percent of patients reacted negatively to the copy product, even though they could find no difference in the concentration of the drug in the bloodstreams of affected patients.[22]

In similar antidepressants studies, researchers found that switching from an innovator to a generic caused a resurgence of former symptoms, new symptoms, or side effects.[23] Switching between different generics caused a resurgence of symptoms and an increase in the drug's side effects, including diarrhea, nausea, and itching.[24] Another study verified that two chemically indistinguishable generics dissolved at different rates in laboratory testing; one matched the dissolution rate of the originator brand, but the other did not.[25]

Diabetes Drugs. Different formulations of a popular diabetes drug, which had all been approved and registered, were found to have "different bioavailabilities, even within drug classes and within countries."[26] A detailed analysis of various generic preparations of the anticlotting drug streptokinase revealed "wide variations in the activity, purity, and composition of the available streptokinase preparations."[27] Finally, different production methods used by a generic manufacturer can change the form of a drug or introduce impurities.[28]

These examples demonstrate that even companies producing drugs that pass extensive quality-control tests cause problems for patients by substituting cheaper (but legitimate) ingredients or formulation processes to cut costs. These problems will be exacerbated as the world relies more heavily on Chinese imported chemicals and pharmaceutical products.

China: Chemical Producer for the World

Imports of raw materials from emerging markets to the West are growing rapidly because of the lower costs of basic ingredients. Nearly 80 percent of API originate outside the United States.[29] In 2002, the United States imported $331 million in drug products from China; by 2010, it was $1.74 billion. Of course, this comes with costs. In 2007-2008, imported Chinese heparin, a blood-thinning drug, caused the deaths of 149 Americans.

For the most part, importing raw materials keeps costs down and increases the drug supply, but the system is still developing and there are gaps. Some Chinese manufacturers have not embraced the culture of GMP or proper business ethics, since bad behavior is rarely sanctioned and harm to patients rarely remedied.

Several pharmaceutical industry experts in China privately admit that up to a quarter of ingredients purchased by Western companies come from unknown sources.


The oversight outlook in China is bleak. Even ignoring the counterfeiting problem, the Chinese drug regulator, the State Food and Drug Authority (SFDA), has an overwhelming task to perform in overseeing a rapidly expanding and already vast pharmaceutical industry. Furthermore, several companies that have been investigated for supplying substandard pharmaceutical ingredients have only been licensed as general chemical manufacturers--their products should not have been sold as pharmaceutical grade, and they were not regulated at all by the SFDA, which has no jurisdiction in the chemical industry. The US FDA has established an office in China and is increasing investigations of the plants that export to the United States, but at best it can only assess each site once every thirteen years. Furthermore, it cannot inspect without hindrance as it can in the United States. It has to give the Chinese government and manufacturer notice of its intent to inspect, which allows poor-performing manufacturers a chance to hide egregious failings.

Lack of effective oversight causes erratic quality control. Imports to the United States are analyzed on receipt, but as was the case with the fraudulently contaminated heparin, standard tests miss faulty products, and dangerous drugs slip through the cracks. US importers must by law insist that their suppliers be GMP certified, but there is no guarantee that certified Chinese producers follow GMP or procure their ingredients from good sources. Raw ingredients could come from a rural Chinese peasant's pig pen, following hygiene standards that would appall the US Department of Agriculture, let alone the FDA. Several pharmaceutical industry experts in China privately admit that up to a quarter of ingredients purchased by Western companies come from unknown sources. Philippe Andre, a European auditor based in China, indicated to me that 39 percent of chemicals from plants he has audited are from unknown origins.[30]

Cynthia Reilly, the director of the American Society of Health-System Pharmacists, says we already face greater risks every day because of the chemicals coming from China, "not through lethal products, but because quality is lower, causing far more product recalls, and hence drug stockouts."[31] The recent scarcity of life-saving drugs in US hospitals and clinics supports this theory; the number of incidents between 2006 and 2010 tripled to a record 211 cases; in the first quarter of 2011, 89 incidents were reported. API importers must be more alert to the possibility of quality variation and aware of its sources since even perfectly formulated products may be lethal if the API is suspect.


Not all drugs are created equal. Manufacturers in poorer parts of the world commit obvious and major production flaws so serious that many of their products fail even the most basic quality-control tests. As a first step, it is important that the regulatory authorities of these countries test what is on the market and remove the many substandard products they will find.

While better regulatory standards protect wealthier countries from egregious mistakes, smaller problems with more subtle causes still exist. The drive to lower production costs induces minor changes in formulation and production methods and the use of slightly inferior ingredients, which may seriously affect a medicine's safety and efficacy.

Unfortunately, as more manufacturers source their chemicals from China, the problem will get worse. Most Chinese chemicals are high quality, but poor oversight, weak regulation, and occasional grotesque negligence will likely compromise drug quality. There are no simple solutions to this problem; with health care costs escalating globally, the idea that we should pay even more for drugs to ensure safety is a tough sell. But at the very least, patients should realize that not all the drugs they take, even allegedly bioequivalent generics, will in fact work perfectly. It really is a case of caveat emptor.

Roger Bate ([email protected]) is the Legatum Fellow in Global Prosperity at AEI. Julissa Milligan ([email protected]) is a research assistant at AEI. Lorraine Mooney ([email protected]) is a medical demographer at Africa Fighting Malaria.

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1. Business Monitor Online, "Novartis Tops Pharmaceutical Emerging Markets Sales Index," February 25, 2011, www.allbusiness.com/company-activities-management/financial/14031536-1.html (accessed June 30, 2011).

2. Roger Bate, Lorraine Mooney, and Kimberly Hess, "Medicine Registration and Medicine Quality: A Preliminary Analysis of Key Cities in Emerging Markets," Research and Reports in Tropical Medicine, no. 1 (December 2010): 89-93.

3. Small Indian producers were defined as those with revenues under $300,000 per year. Large Indian producers were those with revenues greater than $300,000 per year.

4. Roger Bate, Julissa Milligan, and Lorraine Mooney, "The Danger of Substandard Drugs in Emerging Markets: An Assessment of Basic Product Quality," Pharmacologia 3, no. 2 (June 28, 2011): 46-51.

5. Roger Bate et al., A Safe Medicines Chest for the World (London: International Policy Network, May 2010), www.policynetwork.net/sites/default/files/Safe_Medicines_Chest_2010.pdf (accessed June 30, 2011).

6. Katie Lewis, "China's Counterfeit Medicine Trade Is Booming," Canadian Medical Association Journal 181, no. 10 (November 10, 2009): E237-38, www.cmaj.ca/cgi/content/full/181/10/E237 (accessed June 30, 2011). One example is the fatal melamine contamination of milk. See "Chinese Milk Scam Duo Face Death," BBC News, January 22, 2009, http://news.bbc.co.uk/2/hi/asia-pacific/7843972.stm (accessed June 30, 2011).

7. Office of the US Trade Representative, "2007 Special 301 Report," www.ustr.gov/sites/default/files/asset_upload_file230_11122.pdf (accessed August 15, 2010).

8. Roger Bate and Kimberly Hess, "Assessing Website Pharmacy Drug Quality: Safer Than You Think?" PLoS One, August 13, 2010; and Roger Bate, Kimberly Hess, and Lorraine Mooney, "Antimalarial Medicine Diversion: Stock-Outs and Other Public Health Problems," Research and Reports in Tropical Medicine, no. 1 (September 2010): 19-24; and Roger Bate, Julissa Milligan, and Lorraine Mooney, "The Danger of Substandard Drugs in Emerging Markets: An Assessment of Basic Product Quality."

9. "8-Year Long-Term Data Demonstrate Prolonged Overall Survival and Length of Disease Remission with Bexxar," PR Newswire, June 4, 2007, www.drugs.com/clinical_trials/8-year-long-term-data-demonstrate-prolonged-overall-survival-length-remission-bexxar-1154.html (accessed June 30, 2011); and Christopher P. Adams and Van V. Brantner, "Estimating the Cost of New Drug Development: Is It Really $802 Million?" Health Affairs 25, no. 2 (2006): 420-28.

10. Donald J. Birkett, "Generics--Equal or Not?" Australian Prescriber 26, no. 4 (2003). Phenytoin's formulation change from calcium sulfate to lactose caused bioavailability problems.

11. Pharmaceutical Society of Australia, "Generic Medicines Training Kit: Safe and Appropriate Use of Generic Medicines," www.nps.org.au/health_professionals/activities/pharmacy_assistants_kit#article (accessed June 30, 2011). Unlike Canada, Australia, Japan, South Africa, and others, the United States does not make any distinction between different generics products. See Donald J. Birkett, "Generics--Equal or Not?"; US Department of Health and Human Services, FDA, Center for Drug Evaluation and Research, "Guidance for Industry: Bioavailability and Bioequivalence Studies for Orally Administered Drug Products--General Considerations," March 2003, www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm070124.pdf (accessed June 30, 2011).

12. Note that the "bioequivalence window" and the difference in absorption rate as a percentage are not strictly comparable: the bioequivalence window includes a number of different elements, including absorption and dissolution data. See B. M. Davit et al., "Comparing Generic and Innovator Drugs: A Review of 12 Years of Bioequivalence Data from the United States Food and Drug Administration," Annals of Pharmacotherapy 43, no. 10 (2009): 1583-97.

13. Pierre Blier, "Generic Medications: Another Variable in the Treatment of Illnesses," Journal of Psychopharmacology 21, no. 5 (July 2007): 459-60.

14. Inas Asfour and Shereen Elshazly, "Changing Therapy from Glivec® to a 'Copy' Imatinib Results in a Worsening of Chronic Myeloid Leukemia Disease Status: Two Case Reports," Cases Journal 2 (December 17, 2009).

15. Ibid.

16. Mervat Mattar, "Failure of Copy Imatib (CIPLA, India) to Maintain Hematologic and Cytogenetic Responses in Chronic Myeloid Leukemia in Chronic Phase," International Journal of Hematology 91, no. 1 (January 2010): 104-106.

17. David J.Taber et al., "Does Bioequivalence between Modified Cyclosporine Formulations Translate into Equal Outcomes?" Transplantation 80, no. 11 (December 15, 2005): 1633-35; and Herwig-Ulf Meier-Kriesche and Bruce Kaplan, "Cyclosporine Microemulsion and Tacrolimus Are Associated with Decreased Chronic Allograft Failure and Improved Long-Term Graft Survival as Compared with Sandimmune," American Journal of Transplantation 2 (2002): 100-104.

18. J. E. Desmarais, L. Beauclair, and H. C. Margolese, "Switching from Brand-Name to Generic Psychotropic Medications: A Literature Review," CNS Neuroscience and Therapeutics (November 30, 2010).

19. S. Chaluvadi, S. Chiang, L. Tran, C. E. Goldsmith, and D. E. Friedman, "Clinical Experience with Generic Levetiracetam in People with Epilepsy," Epilepsia 52, no. 4 (April 2011): 810-15.

20. M. Mikati et al., "Double-Blind Randomized Study Comparing Brand-Name and Generic Phenytoin Monotherapy," Epilepsia 33, no. 2 (March-April 1992): 359-65; and G. Borgheini, "The Bioequivalence and Therapeutic Efficacy of Generic versus Brand-Name Psychoactive Drugs," Clinical Therapeutics 25, no. 6 (June 2003): 1578-92.

21. K. G. Makus and J. McCormick, "Identification of Adverse Reactions That Can Occur on Substitution of Generic for Branded Lamotrigine in Patients with Epilepsy," Clinical Therapeutics 29, no. 2 (February 2007): 334-41; and S. Chaluvadi, S. Chiang, L. Tran, C. E. Goldsmith, and D. E. Friedman, "Clinical Experience with Generic Levetiracetam in People with Epilepsy."

22. Y. W. Lam et al., "Branded versus Generic Clozapine: Bioavailability Comparison and Interchangeability Issues," Journal of Clinical Psychiatry 62, supp. 5 (2001): 18-22, discussion 23-24.

23. M. Van Ameringen, C. Mancini, B. Patterson, and M. Bennett, "Symptom Relapse Following Switch from Celexa to Generic Citalopram: An Anxiety Disorders Case Series," Journal of Psychopharmacology 21, no. 5 (July 2007): 472-76.

24. A. C. Vergouwen and A. Bakker, "Adverse Effects after Switching to a Different Generic Form of Paroxetine: Paroxetine Mesylate Instead of Paroxetine Hcl Hemihydrate," Ned Tijdschr Geneeskd 146, no. 17 (April 27, 2002): 811-12.

25. F. Chenu et al., "Bioequivalence and Bioinequivalence of Two Original Antidepressant Medications and Their Generics" (poster paper, Institute of Mental Health Research, University of Ottawa, Ottawa, Canada, 2009), www.cmeinstitute.com/postersession/2009Session5/20Chenu.pdf (accessed June 30, 2011).

26. Horst Blume et al., "Pharmaceutical Quality of Glibenclamide Products: A Multinational Postmarket Comparative Study," Zentrallaboratorium Deutscher Aptheker 19, no. 20 (1993): 2713-41.

27. Peter Hermentin et al., "Comparative Analysis of the Activity and Content of Different Streptokinase Preparations," European Heart Journal 26, no. 9 (May 2005): 933-40.

28. Peter Bauer et al., "Effects of the Physical Characteristics of Frusemide on Its Release from Generic Tablets," STP Pharma Pratiques 12 (2002): 76-84, www.docstoc.com/docs/55403560/INFLUENCE-DES-CARACT%C3%89RISTIQUES-PHYSIQUES-DU-FUROS%C3%89MIDE (accessed June 30, 2011).

29. US Government Accountability Office, Food and Drug Administration: Improvements Needed in the Foreign Drug Inspection Program, GAO/HEHS-98-21 (Report to the Chairman, Subcommittee on Oversight and Investigations, House Committee on Commerce, Washington, DC, March 17, 1998).

30. Personal communication with the author, April 4, 2011.

31. Ibid.



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