Competition And Vulnerabilities In The Global Supply Chain For US Generic Active Pharmaceutical Ingredients

Area of Science:

• Pharmaceutical Sciences
• Supply Chain Management
• Global Health Economics

Background:

• The United States pharmaceutical market heavily relies on global supply chains for generic active pharmaceutical ingredients (APIs).
• Understanding the global manufacturing landscape of APIs is crucial for assessing the security and resilience of the US drug supply.
• Existing analyses may not fully capture the concentration of API production and its implications for market competition.

Purpose of the Study:

• To systematically examine the global production of generic APIs for the US market between 2020-2021.
• To identify key manufacturing countries and assess the concentration of API production facilities.
• To evaluate potential vulnerabilities in the US pharmaceutical supply chain due to API sourcing.

Main Methods:

• Analysis of generic API production data from Clarivate Analytics' Cortellis Generics Intelligence database.
• Systematic examination of 1,379 unique generic APIs produced globally for the US market.
• Identification of manufacturing facilities, countries, and assessment of production concentration.

Main Results:

• 565 facilities across 42 countries produced 1,379 unique generic APIs.
• India, China, and Italy were the leading API producers; only 14% of APIs were manufactured in the US.
• A significant portion of APIs (one-third) were produced by a single facility, and another third by two or three facilities, indicating high production concentration.
• Over 20% of APIs were in markets where FDA standards would underestimate low competition due to few API manufacturers versus numerous finished drug manufacturers.

Conclusions:

• The US generic drug supply chain exhibits significant vulnerabilities due to concentrated global API production.
• Current regulatory standards may not adequately identify markets with low API competition.
• Incentives for domestic API production are recommended to enhance supply chain security and mitigate disruption risks.