U.S. taps Indian pharma, but supply chains still lead back to China
A new report reveals that despite efforts by the Biden administration to reduce China's dominance in the production of drug ingredients, many of these ingredients are still sourced from China. This reliance on China for drug ingredients has raised concerns in Congress, leading to two hearings on drug shortages and the FDA's inspection program. The report highlights that Aurobindo Pharma, a major supplier of generic drugs to the US, relies on China for 55% of its raw materials.
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Frequently Asked Questions
Q: Why has the U.S. tapped into the Indian pharmaceutical industry?
A: The U.S. has turned to the Indian pharmaceutical industry as an alternative to reduce its reliance on China for drug ingredients. Concerns have been raised in Congress regarding America's dependency on China for these critical components.
Q: What is the issue with pharmaceutical supply chains between the U.S. and China?
A: Despite attempts to diversify away from Chinese suppliers, supply chains for pharmaceuticals often lead back to China as it controls crucial chokepoints, including the production of active pharmaceutical ingredients (APIs) and raw materials.
Q: Has the U.S. administration taken any steps to address the supply chain issues?
A: Yes, the Biden-Harris Administration announced a Supply Chain Disruptions Task Force on June 8, 2021, acknowledging that critical parts of the drug supply chain are located overseas and aimed to address short-term discontinuities.
Q: Are any other countries besides China and India estimated to control substantial parts of the pharmaceutical supply chain?
A: China and India are indeed estimated to control significant portions of the pharmaceutical supply chain, creating vulnerabilities for U.S. access to medicines and other pharmaceutical products.
Q: What implications does the U.S.-China pharmaceutical dependence have on the broader trade issues?
A: The reliance on China for pharmaceuticals and medical supplies, such as personal protective equipment (PPE), raises broader trade issues related to U.S. manufacturing capacity, strategic independence, and vulnerability to supply chain disruptions in times of crisis like the COVID-19 pandemic.
Q: What lesson can be learned from the pharmaceutical supply chain vulnerabilities?
A: These vulnerabilities emphasize the need to reassess global supply chains and the importance of geographical diversification, as well as the necessity of having a strategic approach to maintaining and securing essential supply chains, especially in healthcare-related industries.
Q: Is there any dialogue about false perceptions related to China's role in U.S. supply chains?
A: Yes, various discussions and articles examine perceptions of China's role in U.S. supply chains, challenging assumptions and pushing for a more nuanced understanding of the actual dependence and potential areas for diversification and resilience building.