Geopolitical conflicts can erupt with little warning, disrupting global trade systems and placing immediate strain on supply chains. Today, all eyes are on the disruptions in the Strait of Hormuz. Tomorrow, it could be issues in the South China Sea or an escalation of the U.S.-China trade war. For supply chains that are already vulnerable to disruptions, such as those for generic medicines, national security risks due to reliance on adversary nations multiply disruption risks.
A significant portion of U.S. medicines and their ingredients are produced abroad, with countries such as China dominating critical segments of the supply of ingredients essential to making our medicines. Nearly 700 medicines used by Americans, fully one-third of all U.S. medicines, contain at least one key starting material sourced exclusively from China. In simple terms, China knows it could today apply trade-related pressures to cut off KSMs threatening the availability of 1 out of 3 U.S. medicines.
Nearly 5 billion prescriptions are filled annually in the United States; over 90% are for generic drugs. By allowing concentrated production of key ingredients that make up these medicines in any one country, the U.S. exposes itself to the real possibility that supply chains could be weaponized to exert influence and power. This type of national security risk threatens our nation’s health and safety.
To their credit, this administration and Congress are aware of, and have made efforts to stabilize, specific medicine supply chain concerns. These solutions can be effective in urgent situations or to plug short-term gaps, but piecemeal efforts do not solve structural security vulnerabilities or account for the complexity of how medicines are made. We need durable approaches to enhance security and resilience over the longer term. Recent leaps in our ability to understand the U.S. medicine supply chain make it possible, and necessary, to expand on what’s been done to date.
In truth, there is no such thing as a “medicine supply chain.” Rather, there are hundreds of supply chains for hundreds of noninterchangeable medicines, each with distinct vulnerabilities that must be analyzed and addressed with targeted solutions. At the same time, one medicine’s supply chain can share overlapping vulnerabilities with those of other medicines, disguising reliance on the same single supplier of a KSM. Therefore, to ensure U.S. national security, we need a resilience plan for all U.S. medicines.
We now have data precise enough to give policymakers and industry a clear, detailed understanding of where drug ingredients are made, where manufacturing is excessively concentrated, and where critical dependencies exist. This end-to-end visibility can help the U.S. to solve for supply chain vulnerabilities using a three-step strategy that includes:
Analyzing medicines on a drug-by-drug basis to understand the supply chains of each medicine, their ingredients, and their vulnerabilities; determining the most appropriate and cost-effective solutions for individual medicine supply chains in the short- and long-term; and identifying patterns across medicines to develop a framework that informs policy and builds durable resilience over time.
Take amoxicillin — the most prescribed anti-infective medication in the U.S. — as an example. Onshoring, the term for bringing pharmaceutical manufacturing back to U.S. soil, has been touted as a way to strengthen the supply of this critical medicine. But amoxicillin’s supply chain remains deeply vulnerable to multiple pressure points, including geographic concentration of KSMs and active pharmaceutical ingredients in China, constrained technical expertise and redundancy, low-price market dynamics, and geopolitical exposure — all exacerbated by exceptionally high demand.
On the other hand, USP’s analysis shows that Mexico is beginning to scale up bulk amoxicillin API manufacturing, while the U.S. already has relevant finished dosage-form manufacturing facilities. This indicates that amoxicillin could be a strong candidate for API near-shoring or “ally-shoring,” reducing concentrated points of risk to minimize dependence on China as domestic production expands.
Blanket approaches to strengthening the supply chain, such as onshoring the finished dose production of a medicine while continuing to source its API from overseas, do not solve the problem and leave U.S. patients at risk. We need a drug-by-drug plan that considers all medicines and their ingredients, identifies areas of overlapping risk, then prioritizes where to intervene and how — using policy, trade, and investment levers across government and the private sector.
Without such a plan, we will continue to fall short of delivering the resilience that policymakers aim to achieve. The stakes could not be higher. Building a resilient medicines supply chain is about safeguarding public health and national security in an increasingly unpredictable world. The question is no longer whether we can afford to act. It is whether we can afford not to.
Ronald Piervincenzi is the CEO of U.S. Pharmacopeia.