Risk #1: Regional Supplier Clusters
Drug components, production, and packaging are concentrated in the Asia-Pacific region
Challenges: Between 20% and 40% of active pharmaceutical ingredients (API), and small-molecule drugs sold globally come from China and India. Overdependence on Asia-Pacific suppliers and producers leaves drugs supply chains vulnerable to geopolitical factors, shortages, and extreme weather events. As one remedy, the EU and US are evaluating supply chain security, with a focus on reducing imports by nearshoring some supply and production.