What would happen to our nation’s healthcare system if our supply of common and often life-saving medications dried up? If everything from ibuprofen and anesthesia to antibiotics and cancer treatments suddenly became unavailable?

As frightening as this question is, we hope we never have to experience the answer. However, unless steps are taken to onshore the manufacturing of pharmaceutical drugs and their active ingredients, losing access to drugs that millions of U.S. citizens need is a very real possibility.

Pharmaceutical Production Moves Overseas

Until the mid-1990s, the U.S., Europe and Japan produced 90% of the world’s active pharmaceutical ingredients (APIs). Today, China has over 40% of worldwide API market share, and the U.S. relies on China and India for 75%–80% of its supply of APIs.

APIs are mixed with non-active ingredients to produce the final drug. The U.S. imports the vast majority of many common and essential medications from China.

Overwhelming U.S. reliance on other countries to supply critical pharmaceutical products presents a significant national security risk. This year, protectionism and geopolitics have disrupted pharmaceutical supply chains in unprecedented ways.

When the Covid-19 pandemic hit in March, India restricted the export of many common medicines and APIs in order to ensure its domestic supply. Although a great deal of pharmaceutical manufacturing takes place in India, it relies on China for many raw ingredients.

However, border tensions between China and India recently caused delays in the movement of key chemicals used to make many vital medications, including diabetes drugs—and the ensuing shortages were felt around the world.

In March 2019, Li Daokui, Professor of Economics at Tsinghua University, pointed out, at China’s annual National Congress, that the country is “the world’s largest exporter of raw materials for vitamins and antibiotics. Should we reduce the exports, the medical systems of some Western countries will not run well.” Amid the ongoing U.S.-China trade war, this statement only increased concern that critical medicines could be “weaponized” and held hostage by another nation.

Additional Threats

Product quality and safety and the environmental impact of harmful manufacturing practices are also significant concerns regarding U.S. reliance on overseas pharmaceutical suppliers. Although many instances of contaminated drugs produced overseas have been documented, the U.S. Food and Drug Administration has no way to adequately inspect foreign manufacturing facilities.

Counterfeit, substandard, mislabeled or falsified generic drugs from China, India and other countries dangerously capitalize on Western desire for less expensive medicines—a result of lax oversight and low levels of regulatory enforcement—and consumers who take them risk harm.

Environmental concerns pose another threat. The U.S. maintains strict regulations to ensure that pharmaceutical waste products are not simply discharged into the environment. This is not the case in China and India, where pollution from antibiotics manufacturing reportedly is helping to increase antimicrobial drug resistance.

Other raw pharmaceutical materials are also at risk. For example, the Covid-19 pandemic has caused shortages of gelatin, an animal product used to encapsulate many medications. Simply switching to a different medication delivery vehicle (such as vegetarian capsules) is not always possible at scale.

In Search of Solutions

We believe that this problem is a vital national security issue, and that the best solution is to deglobalize the production of APIs and pharmaceuticals. We believe this is the only way to safeguard the quality, safety and reliability of our pharmaceutical supply.

To make this happen, we can provide incentives to move pharmaceutical manufacturing back to the U.S and other friendly countries in the Western Hemisphere; diversify and introduce redundancy into supply chains; adopt new technologies that increase efficiency while reducing environmental impact; and require transparency in pharmaceutical labeling so consumers can see the source of the APIs and other raw ingredients used in the medications they consume.

“As an empty capsule manufacturer, we support bringing pharmaceutical and API manufacturing back to the United States,” declares Jonathan Gilinski, Executive Director of CapsCanada, a Lyfe Group company. “There is simply too much at stake to continue with the status quo.”

To learn more about this vitally important issue, read “Deglobalization of APIs and Pharmaceutical Manufacturing: Addressing a Significant National Security Risk,” the latest white paper from CapsCanada, a Lyfe Group company.

Written by Jonathan Gilinski, Executive Director of CapsCanada a Lyfe Group Company

Supply Chain Hiccup or National Security Risk?