U.S. pharmaceutical companies are seeking to lessen their reliance on China-based companies for drug production, ingredients and research, The Wall Street Journal reported Nov. 1.
Geopolitical conflicts, such as cargo ship attacks in the Red Sea and spy balloons above the U.S., have encouraged domestic medical supply companies to reduce their dependence on foreign businesses.
Quality issues have also driven nearshoring efforts; for example, in 2023, the FDA warned that some China-made syringes were breaking and leaking, prompting American companies to ramp up syringe production.
Attempts to shift away from Chinese pharmaceutical suppliers can be difficult, however, since China produces 32% of the world's supply of antibiotics. One drugmaker in China, WuXi AppTec, is estimated to be involved in producing one-fourth of medications used in the U.S.
Of the facilities that manufacture active pharmaceutical ingredients for the U.S., 28% are domestic, while 26% are in the European Union, 18% in India, 13% in China, 2% in Canada and 13% in other countries, according to 2019 FDA data.
In 2024, the U.S. raised tariffs on China-made syringes and needles from 0% to 50%. Federal officials said the tariffs would improve product quality in the market, but critics argue the policy may increase healthcare costs.
Industry officials told The Wall Street Journal that moving away from Chinese suppliers could also slow drug rollouts if U.S. companies redirect research funds to boost manufacturing budgets.