The globalization of the medicines supply chain has helped to increase access to quality medicines at a lower cost. At the same time, the supply chain has grown longer, more complex, and fragmented, leading to a lack of visibility and increase in the risk to its resilience. In many instances, globalization has also led to the concentration of production in a few geographies. Insights from USP’s Medicine Supply Map demonstrate that geographic concentration of pharmaceutical manufacturing anywhere in the world – including within the United States – increases the risk for drug shortages. Promoting geographic diversity of the manufacturing base of U.S. drug products can help to reduce supply chain vulnerabilities.
To understand the existing concentration of manufacturing for active pharmaceutical ingredients (API), we analyzed latest API Drug Master Files (DMF). API DMFs are documents containing information on APIs that are submitted to the U.S. Food and Drug Administration (FDA) by API manufacturers to provide confidential, detailed information about facilities, processes, or articles used in the manufacturing, processing, packaging, and storing of human drug products. Not all drug products utilize APIs referencing DMFs, but the geographic analysis of DMFs can provide a perspective on where API manufacturing is trending.
API DMF filings identify existing geographic locations that are manufacturing APIs and can suggest other locations that may be likely to have additional capacity. It’s important to note that the proportion of DMFs in a particular location should not be interpreted as the proportion of APIs being sourced from that region. Aggregated DMF information is reflective of manufacturer site locations only, and this analysis does not contain information about the quantity produced or geographic distributions of APIs themselves. The USP Medicine Supply Map has mapped 92% of active API DMF holders' locations, the basis of this analysis. This is an update to an analysis of API DMFs that we conducted in 2021.
India and China maintain the greatest API manufacturing capacity
Chart I: Active API DMFs, by year of filing and region of manufacturer, 2000-2023
Chart I1 provides an overview of the API DMF filings by year and country from 2000 to 2023, showing significant shifts over time:
- India: In 2000, India had only 19% of API DMF filings and by 2021 held 62% of API DMF Filings. Most recently, in 2023, India saw a decrease to holding 50% of API DMFs. While still holding half of API DMFs, a noticeable decrease did occur.
- China: China’s API manufacturing capacity has shown a striking rise in recent years. In 2021, China filed 134 API DMFs, and by 2023, this number surged to 219, marking an impressive 63% increase over just two years. In 2023, DMF filings of China correspond to almost one-third of all the filings. This growth highlights China’s expanding role in global API production. Current legislative efforts and the political environment (e.g., BIOSECURE Act) may impact DMF submissions in the future.
- European Union (EU) Countries: Europe’s share decreased from 42% in 2000 to 7% in 2021 and is currently at 10% in 2023. While this represents a small recovery, it still reflects a long-term trend of decreasing API manufacturing activity within Europe.
- United States: The United States remained at 4% of API DMFs in 2023 as it did in 2021.
China increases its API manufacturing potential
Chart II: Total Active API DMFs, by country, as of 2023
The USP Medicine Supply Map analysis (Chart II) counts the number of total active API DMFs by location.
- India accounts for 48%, which did not change from 2021 and continues to be the largest share of total active API DMFs
- EU countries account for 17% in 2023, a decrease from 22% in 2021
- China accounts for 16% of total active API DMFs in 2023, a slight increase from 13% in 2021
- U.S. accounts for 9% of total active API DMFs in 2023, a slight decrease from 10% in 2021
- The number of total active API DMFs created in other countries increased from 7% in 2021 to 10% in 2023.
The 2023 data highlights a dynamic and evolving global API manufacturing landscape. While India remains the leader, its share in new API DMF filings in 2023 has decreased, while China saw an increase in total active API DMF filings. The EU's saw a sizeable decrease in total active API DMF share in 2023, which was likely due to an overall increase in manufacturing activities outside the EU, rather than a decrease in its own API DMF filings. These findings underscore the importance of continually monitoring the pharmaceutical supply chain to understand and adapt to these shifting dynamics.
Read USP’s paper for strategies to enable geographic diversity of the medicines supply chain.
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1 There is a minor discrepancy in the initial contributions for the year 2000 when comparing the current analysis with the previous blog post. This discrepancy can be attributed to the deactivation of some API DMFs that were active in 2021 but became inactive by 2023. This change has adjusted the dataset and slightly altered the historical share distribution observed in the year 2000.
