By the numbers: A look at the sourcing of API used in medicines consumed in the United States

Nicole Longo
Nicole Longo July 16, 2020

By the numbers: A look at the sourcing of API used in medicines consumed in the United States.

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There has been a lot of focus of late on where active pharmaceutical ingredients (APIs) for medicines are manufactured. While some may claim we are reliant on other countries, putting us at risk of potential shortages, the data tell a different story. In reality, the majority of API, measured in dollar value, used in medicines Americans consume are manufactured right here in the United States.

To level set for a minute, APIs are what make a medicine a medicine – they are the substance in the medicine that treats or cures a disease or affects a condition within the body. During the manufacturing process, chemical or biological materials are synthesized or grown and then purified into APIs. APIs are then combined with other materials to create a finished medicine. The science is complicated, to say the least.

So where are APIs manufactured? Let’s take a look at the data.

  • 26% of facilities: Biopharmaceutical manufacturers, including API manufacturers, are required to register with FDA and identify any facility engaged in pharmaceutical manufacturing (including API manufacturing). According to the FDA, about 26% of API manufacturing facilities supplying the U.S. market are in the United States – more than any other one country. Looking at the remaining API manufacturing facilities, 26% are in the European Union, 19% are in India, 13% are in China, 2% are in Canada and 13% are elsewhere in the world.

  • 21% of facilities: FDA also tracks the location of facilities used to make APIs for 370 essential medicines. Again, as of 2019, the United States is the leader with 221 facilities (21%). Of the rest, 166 facilities (15%) are in China and 687 facilities (64%) are elsewhere in the world.

  • 54% of APIs: According to a new analysis released by Avalere, the majority of APIs, measured in dollar value, used in medicines Americans consumed came from the United States in 2019. Specifically, 54% of the dollar value of the $86.5 billion in API used in medicines consumed domestically were manufactured here in the United States. That’s compared to only 6% of the dollar value manufactured in China.

  • Nearly 3 times more APIs: Avalere also found that compared to the top 15 countries (by dollar value) that manufactured API used in U.S. consumed medicines, the United States was by far the leader. In fact, when measured in U.S. dollars, the United States manufactured three times more API used in domestically consumed medicines than the next largest source, Ireland (19%). 

Regardless of where APIs are made, companies must adhere to strict quality and safety standards set by the FDA known as “good manufacturing practice” (GMP) regulations. Additionally, biopharmaceutical manufacturers must perform certain tests to ensure that APIs provided by API suppliers meet requirements for their intended use. As a matter of course, manufacturers of finished medicines establish robust supplier qualification programs to vet potential API suppliers before engaging in transactions with them, and they enter into quality agreements with their API suppliers to ensure they meet GMP requirements.

Conversations about where our medicines and their ingredients are manufactured must begin with accurate information and recognize that flexibility in sourcing of API and other manufacturing materials is an important part of manufacturing strategies to help assure resilient supply chains. From there, we can have thoughtful conversations about how we might enable additional pharmaceutical manufacturing in the United States without causing major supply chain disruptions.

Learn more at PhRMA.org/manufacturing.

Topics: Manufacturing