Geographic distribution of manufacturing remains a driver of drug shortages: USP

The U.S. drug supply chain continues to be at risk due to America’s reliance on countries such as India and China, with 44% of shortage drugs relying on a single country for at least one key starting material (KSM). That’s among the findings from a new report released by independent, scientific nonprofit organization US Pharmacopeia (USP).

USP’s 2025 Annual Drug Shortages Report warns that U.S. reliance on single-country sourcing of KSMs and active pharmaceutical ingredients (APIs) has left the upstream supply chain susceptible to disruption.

“For drugs in shortage, this upstream concentration can present a significant and often hidden vulnerability,” the report states. “Among the 75 drug shortages, 33 rely on at least one KSM produced exclusively in a single country. Six drugs in shortage depend entirely on KSMs from one country: four injectable products sourced solely from China and two oral solids from India.”

When it comes to APIs, USP’s analysis shows that among the 75 drugs in shortage, 15 have the European Union as the primary API supplier — with more than 50% of their API volume sourced from the EU — while India is the primary API supplier for seven drugs in shortage.

“Reliance on foreign manufacturers, particularly for KSMs and APIs, can increase the U.S. drug supply exposure to disruption” from events ranging from quality incidents to natural disasters or trade barriers which can quickly interrupt production, the report warned.

USP also makes the case that quality issues often trigger supply chain disruptions. The report found that facilities producing shortage drugs remain more likely to receive Official Action Indicated (OAI) outcomes from the U.S. Food and Drug Administration.

“When a drug manufacturing facility is placed on OAI status after an inspection, the FDA may also withhold drug approvals or export certificates,” states the report. “From 2021 to 2025, facilities producing drugs that were in shortage were more likely to receive the FDA’s most serious OAI inspection determination than facilities producing drugs not in shortage.”

KSMs through finished dosage

According to USP, the average drug shortage now lasts more than five years — up from approximately two years in 2019. This year’s edition of the report includes what USP describes as the “first complete end-to-end view of drug shortage risk” from KSMs through finished dosage form.

Last year, the U.S. produced 21% of all oral solid drug volume and 58% of the oral solid volume in shortage, found the report. By comparison, India produced 63% of all oral solid volume and only 23% of the oral solid volume in shortage.

For injectables, the U.S. produced 47% of all volume and 57% of the volume in shortage, while the EU produced 20% of all injectable volume but only 5% of the injectable volume in shortage, according to the report. At the same time, India produced 16% of all injectable volume and 26% of the injectable volume in shortage.

USP noted that Cefotaxime injection, a third-generation cephalosporin antibiotic used to treat serious bacterial infections, has been in shortage for more than a decade. The report called out “significant geographic concentration at both the API and KSM levels” for the antibiotic, with the cefotaxime API for the U.S. supply manufactured entirely in India and the KSMs produced almost entirely in China.

“New KSM-level data highlights potential structural risk upstream for drugs in shortage, due to concentration of KSM and API production in China and India,” the report concludes. “Promoting geographic diversification of the manufacturing base for U.S. drug products can help reduce supply chain vulnerabilities.”

Last year, USP CEO Ronald Piervincenzi testified before Congress that advanced manufacturing technologies (AMTs) are needed to rebuild America’s domestic production of APIs and KSMs. 

“Enabling economically viable domestic production of prioritized APIs and KSMs is an important element of a comprehensive effort to enhance medicine supply chain resiliency,” Piervincenzi said. “Emerging technologies offer promising avenues for reducing our dependence on overseas supply chains. Incentivizing acceleration of innovative approaches like continuous manufacturing and flow chemistry are key to modernizing, localizing, and stabilizing production.”