International Supply Chains: Why Foreign Manufacturing Is Causing Drug Shortages in 2025

Every time you fill a prescription for antibiotics, insulin, or even a common blood pressure pill, you’re relying on a global network that’s more fragile than most people realize. In 2025, drug shortages aren’t random glitches-they’re the direct result of decades of outsourcing drug production to a handful of foreign countries, mostly in Asia. It’s not about politics or blame. It’s about physics: when 90% of the active ingredients in your medicine come from a single region, and that region gets hit by a port strike, a flood, or a trade war, your pills disappear.

How Did We Get Here?

In the 1990s, pharmaceutical companies started chasing lower costs. Making drugs in the U.S. or Europe meant paying workers $30 an hour. In China and India, the same work cost $3. So factories moved. Raw materials, intermediates, and finished pills followed. By 2025, China supplies 75% of the world’s active pharmaceutical ingredients (APIs), and India handles 40% of generic drug exports. Together, they control over 80% of the global supply chain for essential medicines.

This wasn’t a secret. Experts warned for years. But the math was too simple: cheaper drugs = higher profits. Companies didn’t need to stockpile extra inventory. They didn’t need backup suppliers. Just-in-time delivery worked perfectly-until it didn’t.

The Breaking Point: 2020 to 2025

The pandemic exposed everything. When lockdowns hit China in early 2020, shipments of APIs stalled. U.S. hospitals ran out of generic antibiotics. Cancer drugs vanished. Nurses had to split doses. By 2024, the FDA recorded 312 drug shortages-up from 138 in 2019. In 2025, the number is still above 250. That’s not a spike. That’s a new normal.

Why? Because the system never fixed itself. Companies didn’t build redundancy. They didn’t invest in domestic capacity. Instead, they doubled down on efficiency. They cut inventory buffers. They cut supplier audits. They cut everything that didn’t directly lower the price tag.

Who Pays the Price?

You do. Not just in higher prices-though those are rising too-but in delayed care. A 2025 study by the American Society of Health-System Pharmacists found that 62% of U.S. hospitals had to delay surgeries because they couldn’t get the anesthetics. Emergency rooms switched to less effective alternatives. Cancer patients waited weeks for chemotherapy. Elderly patients skipped doses because their usual medication wasn’t available.

Small pharmacies are hit hardest. Big chains can negotiate bulk deals with foreign suppliers. Independent pharmacies? They get stuck with empty shelves. In Halifax, a pharmacist told me last month that she’s had to call five different distributors just to find one batch of metformin. That’s not a glitch. That’s the supply chain.

The False Promise of Nearshoring

Everyone talks about bringing drug production back to North America. Mexico and Canada are being pitched as alternatives. And yes, nearshoring helps. A Fortune 500 medical device maker cut its lead times from 90 days to 25 days by moving production to Monterrey. But it cost them $12 million upfront. Labor in Mexico is 30% cheaper than in the U.S., but still 3 times more than in China.

And here’s the catch: Mexico doesn’t make APIs. It assembles pills. The raw ingredients still come from China. So you’re not solving the problem-you’re just moving one link in the chain.

The Real Solution: Multi-Shoring

The only proven fix is multi-shoring: spreading production across at least three regions. Not just China and Mexico. Also India. Also Eastern Europe. Also the U.S. itself.

Companies that did this saw 65% fewer disruption days in 2024. One Canadian generic drugmaker switched from relying solely on India to also sourcing APIs from Germany and Poland. Their inventory turnover improved. Their stockouts dropped from 18 per year to 3. Their customers noticed. Their profits held steady.

It’s not cheap. Setting up a second supplier takes 18 to 24 months. You need new audits, new certifications, new quality controls. But it’s cheaper than losing a customer-or a life-because a drug ran out.

Technology Is Helping, But Not Enough

AI is being used to predict shortages before they happen. IoT sensors track shipments in real time. Digital twins simulate how a port closure in Shanghai might ripple through a hospital in Toronto. These tools are powerful. Sixty-eight percent of big pharma companies now use them.

But technology can’t fix bad decisions. If your supplier list still has only one country, no algorithm will save you. AI can tell you a shipment is delayed. It can’t tell you why you didn’t have a backup.

What’s Being Done?

The U.S. government passed the PEPFAR Act in 2024, which gives grants to companies that build API manufacturing in North America. The FDA now requires drugmakers to disclose all foreign suppliers. The U.S.-Mexico-Canada Agreement was updated in early 2025 to include pharmaceutical production standards.

But these are baby steps. The U.S. still imports over 90% of its antibiotics from abroad. The EU is no better. And Canada? We rely on the U.S. for 85% of our essential drugs. When the U.S. runs out, we run out.

What You Can Do

You can’t fix the global supply chain alone. But you can push for change.

- Ask your pharmacist: Where is this drug made? If they don’t know, that’s a red flag.

- Support local pharmacies that track sourcing. They’re more likely to switch suppliers when needed.

- Contact your elected officials. Demand transparency. Demand investment in domestic production capacity.

- Don’t assume “made in the USA” means it’s safe. Many U.S.-made pills still use imported ingredients.

The Future Isn’t Black and White

Some experts say we’ll never make drugs in North America at China’s prices. They’re right. But we don’t need to. We need to make enough. Reliable enough. Safe enough.

The goal isn’t to shut down China. It’s to stop putting all our medicine in one basket. One flood. One political dispute. One cyberattack. That’s all it takes.

By 2027, if we keep going like this, drug shortages could become as common as flu season. But if we act now-diversify suppliers, invest in tech, demand accountability-we can make sure your next prescription isn’t a gamble.