Whitepaper: Securing America’s Generic Drug Supply: Balancing Access and Independence

The United States faces a fundamental paradox in pharmaceutical policy. While over 60% of generic drugs being consumed by Americans are manufactured outside the country’s borders, generics are 90% of all prescriptions filled yet account for only 18-20% of total drug spending. When looking at the generics sector in light of the economic landscape in the global markets, this reality creates a unique challenge: the characteristics that make generic drugs affordable and accessible also make their supply chains vulnerable to disruption and resistant to traditional policy interventions. Additionally, for an industry already struggling to navigate the Inflation Reduction Act, the generic versus brand-name drugs manufacturing challenges are daunting.

As tariffs are being implemented to encourage domestic manufacturing, balancing cost with patient accessibility becomes increasingly complex. While tariffs and domestic manufacturing eliminate reduce national healthcare security concerns, the fear is that the immediate implementation of tariff policies without complementary measures will disrupt patient access to medications. As Nathan Markward, Chief Research Officer at PurpleLab® observed, “the margins on generic drugs are pretty low in general and so these tariffs may ratchet up prices, [and] there’s going to be immediate impact on hospitals’ ability to purchase at a higher price.”

Ultimately, the path forward requires a strategic, nuanced and thoughtful approach regarding prioritization, phased implementation, government purchase commitments and coordinated approaches that balance immediate healthcare needs with long-term supply chain security.