The US Seeks to Reduce Dependence on China in Pharmaceutical Supply Chains

On November 26, US media reported on China’s dominance in global pharmaceutical manufacturing under the headline “China Controls All Power in Pharmaceuticals,” highlighting China’s leading position in the supply of pharmaceutical raw materials and defining it as a “potential supply chain bottleneck” long ignored by Washington. The article also revealed that the US Congress is pushing for a bipartisan plan to collaborate with allies such as India to build alternative supply chains, aiming to reduce dependence on China in key pharmaceutical areas.

For a long time, China has held a central position in the global pharmaceutical raw material supply chain. Since the 1950s, China has gradually built a large-scale, systematic pharmaceutical chemical industry, forming a prominent advantage in core areas such as key starting materials (KSM) and active pharmaceutical ingredients (APIs). Statistics from the United States Pharmacopeia show that in 1980, China had no presence in these areas; in 2000, its submitted drug master documents accounted for only 5% of the global total; by 2024, it had surpassed India with a 45% share, becoming the world’s largest.

Currently, China not only controls 75% of the global production capacity of antibiotics, 68% of anticancer drugs, and 63% of the active ingredients in diabetes medications, but also serves as the exclusive supplier of at least one chemical raw material for nearly 700 key drugs. This advantage stems from China’s complete industrial chain, mature production processes, and cost control, supporting more cost-effective pharmaceutical products globally.

The United States’ attempt to promote the “decoupling” of its supply chain reflects both geopolitical anxieties and real concerns about supply chain security. Last week, the U.S.-China Economic and Security Review Commission released its annual report, emphasizing the urgency of addressing drug supply issues in the United States. The report recommends that Congress immediately amend a 2020 law to expand the authority of the Food and Drug Administration (FDA) to require pharmaceutical companies to report the source and quantity of key ingredients in modern drugs. The report also calls on regulatory agencies to encourage the use of supplies from non-Chinese sources. For the United States, 45% of its key pharmaceutical starting materials are entirely dependent on China, and half of its active drug ingredients come from a single source. This high dependence, in the context of strategic competition between China and the United States, has become a “national security risk.” It’s important to note that India is the world’s largest supplier of generic drugs, and its production is heavily reliant on key starting materials from China. This implicit relationship further exacerbates US anxiety.

However, even at the height of the US-China trade war, China never threatened to restrict exports of medical supplies, consistently adhering to the principle that “medicine knows no borders.” This contrasts sharply with the US’s instrumental approach to the pharmaceutical supply chain. The Trump administration, disregarding the health of its citizens, had already taken action in the pharmaceutical field. The US previously announced that, starting in April, it would impose tariffs of up to 145% on medical equipment and electronic products from China. Trump also stated that a 100% tariff would be imposed on imported patented drugs starting October 1st. In a recent interview, he even declared that he would bring drug production back home, saying, “Everything will come back.” While the US hopes to reduce its dependence on the Chinese supply chain, in reality, US manufacturers and patients may become increasingly reliant on China.

The stable operation of the global pharmaceutical system depends on complementary strengths and mutual trust among countries. If the US-driven alternative supply chain plan deviates from industry norms and market logic, it will not only fail to achieve its intended goals but may also drive up global healthcare costs and exacerbate health inequalities.