President Donald Trump recently teased tariffs on pharmaceutical imports, and his administration began ramping up probes into the issue this week.
The administration said these tariffs are necessary to bring pharmaceutical manufacturing back to the U.S., which it classified as a matter of national security. This comes as supply chain AI company Exiger sounds the alarm over U.S. reliance on Chinese-made pharmaceuticals.
In Exiger’s report, “A Bitter Pill: America’s Dangerous Dependence on China-Made Pharmaceuticals,” the company explains that American patients are at risk of getting low-quality medication — or none at all — under the current system.
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“We were very worried about the fact that after the pandemic, the strategic national stockpiling efforts and the sort of restoring, you know, United States independence when it came to both pharmaceuticals and medical devices had sort of lost its tailwinds,” Exiger CEO Brandon Daniels told FOX Business. He also said that the elderly and those who rely on critical generic drugs are most at risk of suffering from problems with the current pharmaceutical import system.
According to Exiger, the U.S. currently imports 75% of its essential medicines, with most of them coming from China and India. While India produces about half of the generic drugs the U.S. imports, it relies heavily on China for 80% of its active pharmaceutical ingredients (APIs). More than 500 generic drugs rely on one country’s APIs, including treatments for diabetes and heart conditions as well as antibiotics.
Another factor putting Americans at risk is the use of forced labor in the production of pharmaceuticals. Exiger found that multiple suppliers, including Sinopharm, Zhejiang Shindai Chemical Group and Zhejiang Chemicals Export Corp., relied on Uyghur forced labor in Xinjiang. Customs and Border Patrol is supposed to block goods made with forced labor; however, some still get through.
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Daniels spoke with FOX Business about the dangers of involving forced labor in the pharmaceutical industry, including ethics and product quality issues.
“A lot of these sites that have been found to be associated with forced labor, they have people literally walking around without shoes on in facilities, dirty facilities, facilities that don’t map to and match the good manufacturing process standards that all of our pharmaceuticals must meet,” Daniels told FOX Business.
The Exiger CEO also referenced an incident in which shipments of medication that contained hydrogen cyanide.
In a 2023 incident, contaminated over-the-counter eyedrops produced by India-based Kilitch Healthcare led to permanent vision loss and infections in some patients. The tainted ingredients produced by Kilitch Healthcare were used in a variety of brands’ products, according to Exiger’s report.
In its report, Exiger recommends that the U.S. establish a strategic national stockpile of essential drugs, vaccines and devices. Additionally, the company urges the U.S. to diversify its supply chains, eliminate forced labor, strengthen FDA oversight and boost domestic generic drug production.
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“I think that there is a path to more manufacturing in the United States specifically, when it comes to biotechnology,” Daniels told FOX Business. “And we are still a powerhouse in terms of biotechnology intellectual property, but I don’t think that’s going to be the only answer.”
The Department of Commerce launched an investigation of the national security implications of pharmaceutical imports on April 1, according to a Federal Register notice. The department said that it is looking at finished generic and non-generic drug products, medical countermeasures, APIs and other critical components of these imports.
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