APIIC White Paper: Building a Resilient Domestic Drug Supply Chain

The white paper from the API Innovation Center enforces the need for a collaborative, multi-faceted approach to enhancing the resilience and security of the U.S. pharmaceutical supply chain.

ST. LOUIS--(BUSINESS WIRE)--The API Innovation Center (APIIC) today released an industry white paper detailing the United States’ overreliance on foreign production of essential medicines and presenting a comprehensive plan to rebuild domestic production. The publication details record-breaking drug shortages, economic vulnerabilities and national security risks, urging immediate action from policymakers and industry leaders.

Generic drugs are the workhorse of the healthcare system, comprising 92% of all the medications Americans take daily. Currently, 83 of the top 100 generic drugs lack a U.S.-based source for their active pharmaceutical ingredients (APIs). Approximately 72% of FDA-approved API manufacturing facilities are located outside of the U.S., creating a dependence on foreign-made medicines that leaves Americans vulnerable to drug shortages and threatens patient access to essential medicines.

The white paper, the second of five scheduled annual updates on the state of U.S. generic drug production, distills APIIC’s work over the past 12 months to research, advise, invest and collaborate with key stakeholders to address this critical risk. APIIC recommends a national all-encompassing industrial plan to revitalize the U.S. generic drug industry and ensure a reliable supply of essential medications that includes:

• Strategic investment into underutilized manufacturing facilities.
• Closing the loophole allowing the use of foreign APIs to be labeled as U.S.-made end products.
• Creating a unified, prioritized list of medicines vital to U.S. national health security.
• Supporting widespread industry adoption of Advanced Manufacturing Technologies (AMTs).
• Prioritizing U.S.-made drugs for FDA review and rewarding U.S. manufacturers that show consistent commitment to quality.

“This collaborative white paper is a call to action to reshore the domestic manufacturing of active pharmaceutical ingredients,” said Tony Sardella, founder and chair of APIIC. “Broad bipartisan support for building a robust manufacturing economy and bolstering national health security exists, and this white paper presents a detailed, actionable roadmap to achieve those goals.”

The U.S. pharmaceutical sector has substantial underutilized capacity, with a significant number of manufacturing facilities producing at half their production capacity. Transforming this existing capacity into active production would help create a resilient ecosystem that supports long-term growth and promotes affordability across the supply chain.

The publication explores how APIIC’s Invest Contract Partner (ICP) model, built on collaboration with industry partners, is the only such model known to provide a complete solution to reshoring. Through partnership agreements, the ICP Model de-risks investments and unlocks the network of available U.S. manufacturers and their capacity. Facilitating collaboration among government, industry and academic institutions is crucial to driving innovation forward.

"The white paper recommends that, instead of building new manufacturing plants, efforts should focus on making the most of the resources that already exist," said Kevin Webb, chief operating officer of APIIC. “By repurposing existing U.S. production capacity with advanced manufacturing technology, we accelerate our timeline to strengthen U.S. manufacturing while creating new high-paying manufacturing jobs.”

The lack of incentives to produce domestic APIs is due to a combination of economic, regulatory and market factors that favor overseas production. Solving the economics that disincentivize domestic drug production can enhance U.S. national health security and alleviate the problem of persistent drug shortages. In a recent Washington University in St. Louis study, the total economic impact for a single API and drug manufactured in Missouri is projected to be between $49 million and $51 million.

APIIC promotes the idea that no single company or technology will be a total solution to ensuring national health security — this goal requires collaboration among industry, government and key stakeholders to ensure a long-term, sustainable solution. The white paper provides a roadmap for achieving a stable, secure and resilient supply of essential medicines for all Americans.

About the API Innovation Center:

The API Innovation Center (APIIC) is the 501(c)(3) nonprofit public benefit organization strengthening national health security through a proven public-private partnership model. Leveraging our operational framework, APIIC unlocks its private sector network by bringing together the right set of consortium partners that ensure long-term economic viability of U.S.-based production of active pharmaceutical ingredients. Uniting government, industry and academia to advance technology and optimize underutilized manufacturing facilities, APIIC is building a more resilient pharmaceutical supply chain. APIIC’s mission is to ensure that every hospital, pharmacy and patient has access to domestically produced critical medication to support national health security. APIIC is supported by grants awarded through the state of Missouri, the Missouri Department of Economic Development and the Missouri Technology Corporation. To learn more, visit apicenter.org.