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UPDATE 2-Trump's drug czar nominee withdraws from consideration

(Recasts first paragraph, adds indictments, background on emergency declaration consideration)

WASHINGTON, Oct 17 (Reuters) - President Donald Trump's pick for U.S. drug czar withdrew on Tuesday after it become public that he spearheaded a bill that undercut the government's power to crack down on opioid makers that were flooding the market with the addictive painkillers.

Trump had pegged Tom Marino, a Republican congressman from Pennsylvania, to lead the Office of National Drug Control Policy, a post that required Senate confirmation.

Trump wrote on Twitter: "Rep. Tom Marino has informed me that he is withdrawing his name from consideration as drug czar. Tom is a fine man and a great Congressman!"

A spokeswoman for Marino's office said the congressman had no immediate comment.

In another development, the U.S. Justice Department said it indicted two major Chinese drug traffickers on charges of making and selling fentanyl, a highly addictive synthetic opioid painkiller 50 times more potent than heroin, to Americans over the internet.

The United States is suffering from a major epidemic of opioid overdoses, and the Trump administration has taken criticism for its response to it.

Trump said on Aug. 10 he would declare the opioid epidemic a national emergency, but has yet to do so. Such a declaration would help unlock resources including additional funding and expanded access to various forms of treatment, and give the government more flexibility in waiving rules and restrictions to expedite action.

Asked about the emergency declaration at a news conference on Monday, Trump said, "We are going to be doing that next week. ... It's a very important step. And to get to that step, a lot of work has to be done, and it's time-consuming work."

According to the U.S. Centers for Disease Control and Prevention, opioids were responsible for more than 33,000 U.S. deaths in 2015, the latest year for which data is available. Estimates show the death rate has continued rising.

The Washington Post and the CBS program "60 Minutes" published an investigation on Sunday that showed that Marino had worked to weaken federal efforts to slow the flow of opioid drugs.

The legislation championed by Marino, which was passed by Congress and signed into law last year by Democratic President Barack Obama, was the product of a drug industry quest to weaken the U.S. Drug Enforcement Administration's authority to stem the flow of painkillers to the black market.

The law made it almost impossible for the DEA to freeze suspicious shipments of narcotics to prevent them from reaching the street, according to government documents cited by the Post.

Senate Minority Leader Chuck Schumer called Marino's withdrawal "the right decision," but added that "the fact that he was nominated in the first place is further evidence that when it comes to the opioid crisis, the Trump administration talks the talk, but refuses to walk the walk."

NEW INDICTMENTS

The Justice Department said it charged Xiaobing Yan, 40, and Jian Zhang, 38, with conspiring to distribute large quantities of fentanyl and fentanyl analogues into the United States. The indictments were unsealed on Monday in Mississippi and North Dakota. An analogue is a drug that is chemically similar in makeup to another.

Five Canadians, two residents of Florida and a resident of New Jersey were also indicted in the alleged drug conspiracy involving Zhang, the department said.

A commission created by Trump to study opioid abuse urged him in July to declare a national emergency to address what it called an opioids crisis, framing its death toll in the context of the Sept. 11, 2001, attacks on the United States.

The commission, headed by Republican New Jersey Governor Chris Christie, recommended waiving a federal rule that restricts the number of people who can get residential addiction treatment under the Medicaid healthcare program for the poor and disabled.

The commission cited government data showing that since 1999 U.S. opioid overdoses have quadrupled, adding that nearly two-thirds of U.S. drug overdoses were linked to opioids such as heroin and the powerful painkillers Percocet, OxyContin and fentanyl. (Reporting by Makini Brice and Sarah N. Lynch; Additional reporting by Doina Chiacu; Writing by Will Dunham)