The Economics Behind U.S. Generic Drug Manufacturing

John Murphy III, president and CEO of the Association for Accessible Medicines, unpacks what’s working, what’s not, and what must change for U.S. generic drug production.
Dec. 2, 2025
2 min read

The U.S. generic drug landscape is at a critical inflection point. While generics remain the backbone of American healthcare, providing a majority of all prescriptions filled domestically, manufacturers continue to navigate an economic model where declining reimbursement, fragile supply chains, and persistent race-to-the-bottom pricing have created an environment strained by chronic shortages and limited domestic capacity.

In the latest episode of Off Script: A Pharma Manufacturing Podcast, we spoke with John Murphy III, president and CEO of the Association for Accessible Medicines, to unpack what’s working, what’s not, and what must change to secure the future of generic drug production in the U.S. 

In Part I, Murphy provides a high-level look at the pivotal shifts defining the generic drug landscape and breaks down the economic realities driving drug shortages, the complexities of global ingredient sourcing, and the policy reforms needed to build a more resilient domestic supply chain.

In Part II of our conversation, Murphy examines the most fragile links in the supply chain — from the lack of domestic API production to key starting-material constraints — and explains why long-term, coordinated policy action is essential for restoring supply chain resiliency. He also outlines the legislative, regulatory, and market reforms that could strengthen domestic capacity without compromising patient access or affordability.

About the Author

Andy Lundin

Senior Editor

Andy Lundin has more than 10 years of experience in business-to-business publishing producing digital content for audiences in the medical and automotive industries, among others. He currently works as Senior Editor for Pharma Manufacturing and is responsible for feature writing and production of the podcast.

His prior publications include MEDQOR, a real-time healthcare business intelligence platform, and Bobit Business Media. Andy graduated from California State University-Fullerton in 2014 with a B.A. in journalism. He lives in Long Beach, California.

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