The United States: New Contours of the Supply Chain for Pharmaceuticals
The pandemic of COVID-19 has drawn attention to the ways in which the United States depend on critical pharmaceuticals value chains that rely on production based in China and India. China’s role as the primary supplier of APIs (active pharmaceutical ingredient) to global manufacturers of generic, highlights that the U.S. market may be dependent on China API through third markets The study of this issue implies the analysis of the main factors inducing the supply chain restructuring and also already outlined approaches to solving this problem Over the past few decades, many US pharmaceutical companies have moved finished-dose pharmaceutical production and API (active pharmaceutical ingredients) production overseas, that driven primarily by the opportunities for lower manufacturing costs and access to growing markets. The adoption of the Drug Price Competition and Patent Term Restoration Act of 1984 played an important role here. This law has opened up the market for generics. Today 90% of prescription drugs sold in the U.S. are generic medications. Despite this, generic drug sales account for less than 25% of prescription drug spending. However, there is an implicit risk in relying on elaborate global supply chains in which their provision depends on foreign partners. The Covid-19 pandemic has turned these hidden risks into real disruptions. Due to disruptions in the supply chain the United States stepped up efforts to contain the COVID-19 pandemic with limited domestic stockpiles The difficulties of 2020 forced the United States to look for options for restructuring supply chain and thus reduce this kind of dependence.
Keywords: COVID-19 pandemic | generics | U.S. dependence on provision of pharmaceuticals | API production overseas | China’s role as the primary supplier of APIs | hidden risk | disruptions in the supply chain |
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