Key points:
- Addressing the underlying economic dynamics in the generic sterile injectable (GSI) market is central to addressing drug shortages.
- USP is working with stakeholders and lawmakers to advance a Drug Supply Chain Resilience Benchmark Initiative (DSCRI), creating a measurable mechanism to incentivize resilient purchasing of GSIs.
- The approach helps strengthen America's medicine supply chain for millions of patients, improve our security, and bolster domestic manufacturing.
The supply chains that deliver essential, life-saving medicines to American patients suffer from underinvestment and misaligned incentives. The resulting supply disruptions and even drug shortages are heartbreaking but predictable outcomes of this fragile system.
The well-being of millions of people, and our nation’s security, depends on building a more reliable, sustainable supply chain for U.S. medicines.
USP is working with stakeholders across the ecosystem to address this challenge, focusing on the underlying root causes and driven by a shared vision to:
- Incentivize greater stewardship of our supply chain through economically resilient purchasing practices for essential medicines
- Uphold quality standards that foster trust in our healthcare system
- Preserve the savings that generic medicines deliver for patients and purchasers
Together, these principles provide the foundation for a system that Americans can depend on.
Understanding the root causes
The economics of the generic drug market continue to destabilize supply chains and, ultimately, the therapies that depend on them. These dynamics are clearer today than even a year ago.
Pricing pressure on low-cost generic medicines, particularly generic sterile injectables (GSIs), often pushes purchasing toward or below a manufacturer’s cost of production. This pressure leaves little margin for investment in next-generation quality systems and manufacturing redundancies that provide a hedge against problems that can shut down a single facility and cause a shortage. Even more, prices that barely cover the cost of production are the main reason that most generic medicine manufacturing has migrated to less costly offshore locations, leaving the U.S. dependent on fragile global supply chains for essential treatments.
A sustainable, resilient supply of essential medicines will require more than incremental fixes. What is needed is a comprehensive, market-based solution that aligns incentives with the outcomes we want to achieve: reliability, quality, and stewardship.
USP proposes establishing a Drug Supply Chain Resilience Benchmark Initiative (DSCRI) that includes two essential elements. Establishing an evergreen program that creates a resilience benchmark – a standard to measure whether the supply chain for each specific medicine is resilient – will provide a transparent, data-driven system to enable payors to differentiate among suppliers. Based on this benchmark, market-based incentives can reward purchasers who prioritize sustainable procurement and investments in supply chain resilience.
How resilient purchasing strengthens the system
Incentivizing resilient purchasing would help create a market that values reliability, encourages reinvestment in quality and quality systems, and strengthens America’s domestic industrial base to sustainably compete in the global market.
This approach doesn’t merely address symptoms—it targets the underlying dynamics responsible for today’s vulnerabilities.
The path forward
Upcoming policy discussions with stakeholders, including Angels for Change, will explore the relationship between market dynamics and drug shortages as well as their intersection with supply chain resilience and national security. These conversations will shape not only the future of public health but also the contours of international trade, our reliance on adversarial nations for lifesaving therapies, and our ability to maintain and grow domestic manufacturing capacity.
Amid such high stakes, some welcome consensus is already emerging. USP has been encouraged by early reception of the DSCRI proposal and by the acknowledgment—from stakeholders across the supply chain—that the time to act is now. USP has made this initiative a priority for 2026 and plans to feature it prominently in events hosted by the USP Resiliency Center, a centralized, expert‑led mechanism that advances medicine supply chain resilience by aligning stakeholders and coordinating action. The Center leverages USP’s scientific and technical expertise, including its standards‑setting committees, collaborations with regulators and industry, and insights from the 450 organizations of the USP Convention. Together, these capabilities enable the Center to deliver evidence‑based insights, build consensus, attract investment, and drive practical reforms to improve medicine supply chain resilience.
We invite you to join us in advancing a comprehensive solution. The health of millions depends on forging a more resilient, adaptable, and secure future for America’s medicine supply.
Learn more about the Drug Supply Chain Resilience Benchmark Initiative (DSCRI) in our accompanying policy paper.
