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A Bitter Pill: America’s Dangerous Dependence on China-Made Pharmaceuticals

Article - May 19, 2025

A Bitter Pill: America’s Dangerous Dependence on China-Made Pharmaceuticals

How Global Supply Chains, Strategic Rivals, and Quality Breakdowns Threaten U.S. Healthcare

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Exiger AI-powered analysis has uncovered widespread quality and ethical risks in the global pharmaceutical supply chain—including contamination, falsified testing data, and potential use of forced labor in China. But those are only some of the issues putting medications at risk.

These failures don’t just threaten patient safety, they also expose the U.S. to significant economic, legal, and national security issues, underscoring the urgent need for greater visibility and oversight.

Critical Risks in U.S. Drug Supply Chains

The U.S. imports 75% of its essential medicines, exposing American patients and healthcare systems to disruptions from international conflicts, trade restrictions, pandemics, and natural disasters.

Over 504 generic drugs, including 10 essential medicines, have only a single identified API manufacturing country, heightening the risk of supply shocks.

Pharmaceutical ingredients linked to forced labor pose serious ethical and legal issues, potentially compromising the integrity and reputation of the entire supply chain.

India supplies about half of all generic drugs used in the U.S., yet it depends on China for 80% of its APIs.

China alone supplies nearly 90% of the antibiotic APIs consumed in the U.S., creating an acute dependency that could be exploited in a geopolitical crisis.

The largest producer of Medicaid-reimbursed prescriptions is linked to forced labor. This company has almost a third of the antibiotics market share and potentially introduces unethical and illegal labor practices into U.S. healthcare.

The third-largest prescription provider for Medicaid procures pharmaceutical products from companies tied to forced labor and Chinese state ownership.

China and India dominate the global market, producing around 60% of active pharmaceutical ingredients (APIs).

Systemic quality control failures have already impacted U.S. consumers. Incidents involving substandard and contaminated drugs highlight the real health threats posed.

More than 30% of all new FDA import alerts have been for sites in China, and 16% for sites in India, highlighting recurring manufacturing issues.

For more details on these critical risks, access A Bitter Pill: America’s Dangerous Dependence on China-Made Pharmaceuticals.

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A Bitter Pill Report

High-Risk Companies in Supply Chains & Their Dangerous Side Effects

Analysis using the 1Exiger platform performed risk assessments on 2,309 pharmaceutical-related companies, including drug manufacturers, labelers, packagers, or suppliers to drug manufacturers, across antibiotics, heart disease or diabetes therapeutic categories.

Of all companies risk-assessed, 12% have overall risk ratings of high or medium-high. Companies with elevated overall risk scores are most often based in China or India. Drivers of their elevated risk scores include state ownership, connections to forced labor, regulatory violations, and elevated FOCI and regulatory risk among identified suppliers.

 

Operational risk: 1Exiger shows regulatory violation detail related to drug manufacturing and quality control standards.
Operational risk: 1Exiger shows regulatory violation detail related to drug manufacturing and quality control standards.

Forced Labor Concerns and Pharma Supply Chain Quality

Forced labor and quality failures are deeply intertwined in the pharmaceutical supply chain, especially in products sourced from China’s Xinjiang region. Investigations have found that dozens of drug ingredients are produced exclusively in Xinjiang—often by laborers under coercive conditions—then routed through third countries for formulation or packaging or registered under different entities to obscure their origin.

These practices make it difficult for U.S. importers and regulators to identify forced labor content, even though such imports are prohibited under the Uyghur Forced Labor Prevention Act (UFLPA). Many of the companies involved are FDA-registered suppliers and have also been cited for serious violations, including falsified inspection records, contamination, and unsanitary manufacturing conditions—amplifying the health, legal, and ethical risks to U.S. consumers.

Forced Labor - HIGH-RISK COMPANIES IN SUPPLY CHAINS
Example of Chinese state-owned enterprise suspected of forced labor indirectly supplying active pharmaceutical ingredient (API) subcomponents sold in the U.S. as shown in the 1Exiger platform.

Recommendations for Resilient U.S. Pharma Supply Chains

The U.S.’s reliance on foreign pharmaceutical supply is more than an economic issue, it’s a strategic risk. Here is a summary of next steps based on Exiger pharmaceutical supply chain analysis:

  • Strategic stockpiling and advanced research pathways: Expand national stockpiles of essential drugs and use the Department of Health and Human Services’ Biomedical Advanced Research and Development Authority to accelerate development of U.S.-produced therapies.
  • Diversify and secure foreign supply chains: Develop sourcing alternatives in trusted countries and require redundancy in public health procurement contracts.
  • Boost domestic production of critical drugs: Incentivize U.S. manufacturing of essential medicines through tax credits, public–private partnerships, and federal procurement preferences.
  • Eradicate forced labor from pharma supply chains: Intensify enforcement of the UFLPA, require supply chain mapping to raw materials, and mandate third-party audits of high-risk links.
  • Enhance regulatory oversight and quality enforcement: Increase FDA inspections of foreign sites, require real-time quality data from manufacturers, and close regulatory loopholes.

For more details on the report recommendations, access A Bitter Pill: America’s Dangerous Dependence on China-Made Pharmaceuticals.

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