China and India’s pharmaceutical dependence deepens, prompting calls for strategic supply resilience

Pharmaceutical supply chains are becoming more exposed to China and India, with a growing body of industry and policy analysis suggesting that reliance is no longer confined to active pharmaceutical ingredients and key starting materials. It now reaches into finished medicines, raising the prospect that Europe and the US could face a deeper strategic dependency than many had assumed.

That is the central warning from Dr Vincent Van Bockstaele of the University of Antwerp, who to...

ld a Pharma.Aero masterclass in Frankfurt that moving sourcing from China to India does not necessarily solve the underlying problem because India itself depends heavily on Chinese inputs. The point was echoed by Indian reporting, which has also highlighted how the country still sources a large share of its API, key starting material and intermediate needs from China.

The issue matters most upstream. Europe is heavily reliant on external suppliers for APIs, with estimates in the material presented at the Frankfurt event putting the figure at around two-thirds of supply. The US is understood to be even more exposed. In practice, that means the resilience debate is shifting away from the cheapest supplier and towards the question of where critical medicines can be made, and remade, if trade tensions or disruptions interrupt normal flows.

According to Van Bockstaele, the new priority is “strategic optionality” rather than simple cost efficiency. That reflects a wider change in tone across the sector, as governments and companies begin to treat pharmaceutical production as a matter of supply security and, in some cases, national security.

The policy response is not uniform. The US has increasingly approached medicines through a security lens, using tariffs, incentives and domestic manufacturing support to reduce vulnerability. Europe has leaned more towards resilience by design, with regulatory and industrial measures intended to strengthen critical supply chains without fully trying to onshore every stage of production. Neither approach eliminates dependence entirely, and both run up against the reality that pharmaceutical networks are global, highly specialised and difficult to rebuild quickly.

Trade policy has already altered behaviour. The Frankfurt presentation pointed to a large inventory build-up in the US around tariff uncertainty in 2025, as companies moved product early to create buffers. But the effect was more pronounced in trade value than in physical volumes, reflecting the unusually high value of pharmaceuticals relative to their weight. That distinction helps explain why airfreight statistics can look volatile even when underlying shipment volumes move less dramatically.

Air cargo remains important, but the broader trade pattern is more mixed than a simple shift from sea to air would suggest. Over roughly the past decade, Europe-US pharmaceutical airfreight has stayed relatively steady, while maritime transport has carried much of the growth in the overall market. The strategic role of air cargo is nevertheless clear in products that are high value, temperature sensitive or urgently needed.

The more far-reaching concern is downstream. China and India are already major exporters of pharmaceutical products, and the data cited in the industry discussion suggests their role is expanding beyond raw materials. If that continues, Europe’s current dependence on upstream inputs could evolve into reliance on finished medicines as well. That would mark a more serious vulnerability, because it would place the supply of the end product itself more squarely in the hands of external producers.

India’s own dependence on China underlines the challenge. Reporting by The Economic Times and other Indian outlets has said the country still imports the majority of its critical pharmaceutical inputs from China, despite government efforts to build domestic capacity. That leaves policymakers with an awkward conclusion: diversification alone is not the same as resilience if the alternative source is tied to the same upstream supplier.

The implication is that pharmaceutical security will require broader co-ordination between industry and government, with a sharper focus on multi-tier visibility, strategic stockpiles and deliberate redundancy. As Van Bockstaele put it in Frankfurt, supply chains tend to reproduce the same dependencies when every actor pushes for the lowest sourcing cost. The task now is to decide which dependencies are acceptable, which are strategic, and where the system needs backup before the next disruption arrives.

Source: Noah Wire Services