Will India Replace China in the U.S. Drug Supply Chain?

Axinn, Veltrop & Harkrider LLP

Axinn, Veltrop & Harkrider LLP

In a recent opinion piece in Newsweek, Dr. Rahul Tiwari asserts that pharmaceutical companies in India have an opportunity to supplant China's dominant position in producing active pharmaceutical ingredients ("API's") and other raw materials that are critical elements in the U.S. drug supply chain. There have obviously been growing tensions between the U.S. and China, and shortages during the beginning of the COVID epidemic brought to the forefront how dependent the U.S. pharmaceutical supply chain is on China. Although that has led to increased calls by U.S. policymakers to onshore the production of API's and other ingredients, Tiwari notes that cost is a major impediment to wholesale production within the U.S., especially for generic drugs.

Tiwari suggests that India's good relationship with and close economic ties to the U.S. can be leveraged to enable pharmaceutical companies in India to take China's place in the U.S. supply chain and assuage the concerns of U.S. policymakers. But Tiwari also recognizes that doing so will require significant investment and technological improvements. In addition, Indian companies will have to be particularly focused on navigating U.S. patent issues and FDA's complex regulatory regime.

India certainly seems poised to increase its role in the U.S. pharmaceutical supply chain. It will be interesting to see if Tiwari's prediction of India overtaking China's role will come to fruition.

“By collaborating with India, the United States can reduce its dependency on China, fostering a more secure and diversified supply chain.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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