This blog is part of a series on the geographic concentration of pharmaceutical manufacturing. This blog focuses on the manufacturing of active pharmaceutical ingredients (API). For a discussion on finished dose manufacturing, see here .
Historically, U.S. pharmaceutical tariffs have been based on the country where the pharmaceutical API was made.1 Using USP’s Medicine Supply Map, we analyzed the geographic concentration of U.S. prescription API manufacturing, by volume.
Key takeaways:
- Major hubs of production are India and the European Union (EU) (see Figure 1).
- Generic drugs come primarily from India. Generic drugs make up 90% of US prescription volume.2
- 43% of branded pharmaceutical API comes from the EU. In addition, European countries like Norway and Switzerland (included in “Other”) are also important contributors.
- 12% of total API volume is made in the US. We excluded IV fluids, such as saline, from the analysis. If those had been included, the U.S. contribution would have been significantly higher.
- China contributes 8% of the total volume of API. However, we have case-by-case evidence of significant dependence on China for key starting materials, the building blocks of API.
Figure 1: Volume share of US prescription API, by country (2024)
A prior analysis identified the origins of APIs used in finished dose drugs for the U.S. market, focusing on the number of API manufacturers registered with FDA—an indicator of manufacturing capability rather than actual production volume. This latest analysis looks at the volume contributed by different countries.
The USP Medicine Supply Map maps the facility where API for specific national drug codes (NDCs) -- unique identifiers for each medication -- are made. We assume a higher volume product will need more API than a lower volume product (which may not always be the case). We measure volume using IQVIA data on extended units or the smallest saleable units such as tablet or milliliters. We excluded the following IV fluids from the analysis: Sodium Chloride Injection, Bacteriostatic Sodium chloride Injection, Dextrose Injection, Potassium Chloride Injection, Lactated Ringer's Injection. IV fluids use simple APIs like sodium chloride (salt) and their large volumes can significantly skew the analysis.
Additional analysis is planned to understand the therapeutic categories of the API produced within each region.
Many thanks to Marta Wosińska at The Brookings Institution and Stephen Colvill at the Duke-Margolis Institute for Health Policy for their contributions to this analysis.
Contact the USP Medicine Supply Map for a demo or more information on how to get a report on specific medicines or identify alternate sources of supply.
1 Tariffs are applied based on the product's “country of origin.” The “country of origin” is the country where a product was made or significantly transformed. Most pharmaceuticals supply chains span multiple countries, with ingredient production and fill finish happening in different countries. With some exceptions – the US currently deems the country where the API is made as the “country of origin. https://rulings.cbp.gov/ruling/N344024
2 https://accessiblemeds.org/resources/reports/2020-generic-drug-biosimil…
Information and data from the Medicine Supply Map is provided “as is” and USP disclaims all warranties and liability for use of such information and data.
