Reshoring generic pharmaceutical production is essential in today’s era of geopolitical instability and heightened awareness surrounding national health security. And it is possible—if done right.
In an era of geopolitical instability and heightened awareness surrounding national health security, the importance of reshoring the production of active pharmaceutical ingredients cannot be overstated. According to the Olin Business School at Washington University in St. Louis, more than 80 of the top 100 generic medicines have no U.S.-based source for their active pharmaceutical ingredients (APIs), the components that provide the drugs’ therapeutic benefit.
This overwhelming reliance on foreign pharmaceutical production exposes American consumers and healthcare providers to severe risks, including frequent, ongoing drug shortages and compromised access to critical medications such as anesthetics and chemotherapies. Even weather events within the U.S. can cause supply disruptions, as seen when hurricanes forced sterile injectable plant closures. These incidents demonstrate the need for a more robust domestic pharmaceutical manufacturing base that can ensure redundancy during disasters and other interruptions.
President Trump’s recent executive order to fill the Strategic Active Pharmaceutical Ingredients Reserve offers an opportunity to accelerate the domestic production of APIs and the key starting materials used to produce them. This is a positive signal that the administration recognizes the need to prioritize domestic production, when possible, to strengthen national health security. To fully realize the potential of this effort, strategic investments should be considered by the administration and Congress.
The last few years in particular have displayed the vulnerabilities inherent in our supply chain. As policymakers, industry professionals and healthcare providers have noted, these vulnerabilities are not merely abstract—they have tangible impacts on patient outcomes and healthcare delivery, leading to delayed care, inferior treatment and medication errors. As the principal growth partner at Blu Zone Bioscience & Supply Chain Solutions with 27 years of previous experience as a healthcare supply chain senior leader in the U.S. Army, I believe the solution to these vulnerabilities is to leverage advancements in manufacturing on a targeted, cost-effective scale and to build a resilient and trusted supply of U.S. drug products that can be economically sustained by payers and health systems.
The Trump administration’s efforts to promote U.S. manufacturing offer an opportunity to further these endeavors. By reshoring pharmaceutical manufacturing, the U.S. can capitalize on underutilized manufacturing capacity while creating new jobs and supporting U.S.-sourced and -produced drug products. This, combined with a centralized, coordinated approach to address drug shortages, will pave the way for improved health security and economic growth for all Americans.
Forming Partnerships and Closing the Loophole in U.S. Procurement Practices
Various efforts are underway across the U.S. to bring more generic API production back to the country. These projects harness the opportunity of advanced manufacturing technologies to drive significant cost reductions, enhance production efficiency while maintaining quality and ultimately increase the reliability of the U.S. pharmaceutical supply chain. While these technologies are not unique to the U.S., de-risking the deployment of advanced manufacturing technologies—coupled with long term supply contracts with commercial and government customers—will give the U.S. cost, regulatory and commercial advantages over foreign manufacturers, incentivizing domestic production of essential medicines for our most vulnerable patient populations.
The API Innovation Center (APIIC), a nonprofit that has formed public-private partnerships between industry, academia and innovators has made notable strides toward enhancing domestic production capacity, with six critical APIs currently in development. Through partnerships with pharmaceutical manufacturing companies, APIIC has supported the development of propofol, bupivacaine and albuterol—all drugs that are regularly in short supply.
In addition to addressing domestic production, Congress must close the loophole caused by the Acetris Health, LLC v United States ruling in order to boost reshoring efforts. In that 2020 decision, the federal appeals court ruled that a pharmaceutical product manufactured in the U.S. can qualify as a “U.S.-made end product” for federal procurement purposes, even if its API is made abroad. This interpretation allows drugs made with foreign APIs to be deemed U.S.-made as long as the final dosage form is produced domestically. While favorable to importers, the ruling complicates efforts to reshore API production and strengthen true U.S. pharmaceutical supply chain resilience.
This loophole undermines investment in companies willing to build or expand U.S.-based API production by allowing foreign-based competitors—who benefit from lower labor costs, less stringent environmental standards and significant government subsidies—to compete for U.S. government contracts. As a result, incentives associated with domestic production such as streamlined regulatory processes, investments in modernization efforts or reputational advantages associated with high quality and control are diminished. Without a comprehensive solution that addresses the uncertainty created by the Acetris ruling, domestic manufacturers will continue to struggle to achieve a return on investment that justifies reshoring API production.
Now is the time for Congress and industry leaders to unite in fortifying our domestic pharmaceutical manufacturing sector. By closing this loophole and revising federal procurement practices to ensure that products labeled as American-made meet stringent domestic manufacturing criteria, we can mitigate the risks associated with relying on foreign sources for crucial APIs. These actions will also reinforce the integrity of federal procurement policies and ensure that American healthcare providers and patients have reliable access to high-quality medications.
APIIC is leading this vital movement to strengthen the United States’ pharmaceutical supply chain. Together, we can foster a resilient, self-reliant drug supply chain that prioritizes both health security and economic growth for all Americans. The stakes are high, and the time for decisive action is now, particularly with the Trump administration’s focus on reshoring American manufacturing. Let’s seize the moment to make reshoring a reality for the future of American healthcare.
