Covid-19 could change how dependent the world is on China for drugs

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This story is part of an ongoing series on how China is reshaping our world.

Where are our drugs made? The answer turns out to be really complicated. The pharmaceutical supply chain is complex, global, and opaque by design.

A bottle of drugs with an American label may be distributed by a company based in the US, but the pills are often made and packaged in other parts of the world, while the starting chemicals that make the drug effective often come from one country—China.

China is the world’s largest producer of Active Pharmaceutical Ingredients, or APIs, which are the main ingredients in drugs. Many developed countries, including the US, outsource API manufacturing to countries in Asia. About 90% of factories that make APIs for drugs sold in the US are located abroad. India, which is the world’s largest producer of generic drugs, estimates that 70% of its APIs come from China.

This reliance on China has long been a concern, but the world had largely accepted the trade-off between consolidation risks and cost. Until Covid-19.

The pandemic challenges an already vulnerable global pharmaceutical supply chain—at a time when medical systems around the world are already facing unprecedented pressure.