A generic drug finished in an American factory but dependent on a single overseas supplier for its active ingredient may be less secure than an imported medicine produced at two independent plants with multiple qualified suppliers.
That distinction matters as President Donald Trump moves to bring generic-drug manufacturing back to the United States. He has announced a plan to keep imported generics tariff-free until August 2028, before imposing steep tariffs intended to encourage domestic production.
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The objective is reasonable. Medicines that Americans cannot afford to lose access to should be manufactured domestically wherever feasible. Yet domestic production does not necessarily mean supply security.
The FDA reported in 2025 that only 9% of manufacturers producing active pharmaceutical ingredients used in FDA-approved drugs were based in the U.S., compared with 22% in China and 44% in India. Rebuilding that capacity will take time. More importantly, moving the final manufacturing step to the U.S. does not eliminate a vulnerability if a critical ingredient still comes from one factory, one supplier, or one country.
Washington should therefore use the next two years to measure whether a critical medicine’s supply chain can survive a disruption, rather than focusing on geography alone.
A tariff based solely on where the finished drug is made can reward a fragile supply chain while penalizing a resilient one. The government should assess critical medicines by the number of qualified manufacturing sites and active-ingredient suppliers, and by how geographically concentrated those sources are.
That assessment should be systematic rather than improvised during a shortage. For important generics, the government could maintain a resilience profile showing where products and active ingredients are made, how many alternatives exist, and whether production is concentrated in a region. A medicine produced domestically but dependent on one vulnerable source should not receive the same resilience rating as one backed by multiple independent suppliers.
Domestic production should remain the preferred option, particularly for medicines essential to public health and national security. But where complete domestic production is not yet practical, imports should not all be treated alike. A medicine supported by several qualified suppliers, geographically separated manufacturing sites, and reliable production in allied countries presents a different risk from one dependent on a single vulnerable source.
The administration should make supply-chain resilience part of the tariff framework. Products with fragile, concentrated supply chains should face the strongest pressure to relocate or diversify. More resilient supply chains could receive preferential treatment during the transition. Congress and the administration should reinforce the same principle through federal purchasing by rewarding dependable capacity rather than simply the lowest price.
Such an approach would also give manufacturers an incentive to invest in redundancy. Companies that add qualified suppliers, diversify production across regions, or establish domestic manufacturing capacity would improve their resilience profile even before shifting every stage of production to the U.S. Policymakers could then use those profiles not only when setting tariffs, but also when awarding contracts or deciding which medicines warrant targeted support for domestic capacity.
This would not weaken reshoring. It would make reshoring serve its actual purpose.
Domestic manufacturing reduces important geopolitical vulnerabilities, but it cannot eliminate operational risk. Even a fully American supply chain can be disrupted when factories close, quality problems halt production, hurricanes damage plants, or suppliers fail. Reshoring and redundancy, therefore, should not be treated as alternatives. A secure pharmaceutical supply requires both.
TARIFF INDIA, AND HALF OF AMERICA’S MEDICINE CABINET COULD DISAPPEAR
For strategically important medicines, America should build as much domestic capacity as reasonably possible. But the test of pharmaceutical security should not be the flag flying above the factory.
A medicine is secure when the loss of one factory, supplier, or country cannot take it away from American patients.
Professor David Adler, MD/PhD, MBA, is a senior pharmaceutical leader in oncology clinical drug development and translational medicine with more than 15 years of industry and academic leadership experience. He spent a decade in senior leadership at Bayer AG’s Global Oncology Clinical Development organization and currently serves as Chief Scientific & Medical Officer of the PATHORA Institute of Pathology & Tissue Medicine. He also holds academic appointments at the Hebrew University of Jerusalem, Ben-Gurion University of the Negev and the University of Bonn.
