The coronavirus disease 2019 (COVID-19) pandemic exposed deep vulnerabilities in global pharmaceutical supply chains, which were already strained by years of outsourcing and fragmented oversight. Geopolitical tensions, ongoing inflationary pressures, climate-related disruptions, and trade route instability have intensified these challenges.
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Drug shortages, once considered occasional, have become persistent and are now threatening critical care and public health readiness. In 2025, the American Society of Health-System Pharmacists reported more than 323 active shortages, the highest in a decade, affecting oncology, antibiotics, and cardiovascular drugs.
As hospitals and regulators struggle to secure essential medications, the urgency to build a more resilient pharmaceutical infrastructure is growing.1 This article explores the complex mix of challenges, from overreliance on international suppliers to inadequate monitoring systems, and outlines strategies to strengthen supply chain resilience by 2025.
Persistent Drug Shortages: A Global Concern
Drug shortages are an escalating global crisis affecting countries across all income levels. As of early 2025, the U.S., EU, and Japan report record shortages, with critical gaps in generic injectables, antibiotics, and oncology drugs. These shortages stem from various issues, including production delays, unavailability of raw materials from key suppliers such as China and India, quality-related shutdowns of overseas API plants, and the continued reliance on just-in-time inventory systems that offer no buffer capacity.
The consequences of these are severe. Patients face delayed treatment, prolonged hospital stays, adverse effects from substitute medications, and in some cases, fatal outcomes. Oncology drugs and antibiotics are among the most affected. Reported shortages include methotrexate, daunorubicin, penicillin G, and meropenem in the US, Europe, and several African countries. These shortages compromise clinical outcomes, increase healthcare costs, and diminish patient confidence in health systems. While high-income countries have implemented policies to reduce these effects, many low- and middle-income nations continue to struggle due to limited regulatory infrastructure and procurement inefficiencies.2
Overdependence on Foreign Suppliers for Active Pharmaceutical Ingredients (APIs)
Nearly 65% to 70% of APIs used globally are sourced from China and India as of 2025, creating a high-risk concentration in the pharmaceutical supply chain. This overreliance exposes drug availability to disruptions from geopolitical tensions, export bans, climate-related factory shutdowns, and stricter environmental regulations in producing nations. The COVID-19 pandemic highlighted these risks, as global supply chains froze, resulting in critical drug shortages. In the US, oncology medications, though a smaller fraction of total shortages, remain highly vulnerable due to their clinical urgency and limited alternatives.3,4
Recent data show that API shortages alone contributed to 42% of reported unavailable drugs globally and more than 55% of those with constrained supply in 2024. With domestic API production still limited, the U.S. continues to face systemic bottlenecks in ensuring consistent drug access. Experts recommend diversifying sources, investing in local manufacturing, developing regional API hubs in Europe and Southeast Asia, and deploying advanced inspection technologies to improve resilience. Strengthening domestic infrastructure is key to mitigating future disruptions and ensuring stable access to essential medications.3,4
Domestic Manufacturing and Onshoring Initiatives
The COVID-19 pandemic highlighted deep vulnerabilities in global pharmaceutical supply chains, particularly the overreliance on foreign sources for active pharmaceutical ingredients and essential medicines. In response, countries such as the US, India, and members of the European Union (EU) have launched initiatives to onshore pharmaceutical manufacturing. These include tax credits, subsidies, procurement incentives, and local content requirements aimed at encouraging domestic production. By 2025, several projects, such as new U.S.-based API plants supported by BARDA, the EU’s Critical Medicines Alliance launched in 2024, and India’s Production Linked Incentive (PLI) scheme yielding 35 new API facilities, are beginning to increase local capacity. The rationale extends beyond economics to include national security and public health concerns, especially amid geopolitical tensions and export bans.3,5
Onshoring allows for improved regulatory oversight, reduced exposure to global supply shocks, and enhanced preparedness for future health emergencies. It also supports greater transparency and control within the supply chain. However, experts caution that domestic manufacturing alone cannot resolve persistent shortages without parallel reforms addressing structural issues like thin profit margins in generics and supply chain concentration. Still, as a strategic safeguard, onshoring is gaining traction as part of broader efforts to build resilient, secure, and self-reliant health systems.3,5
Digital Tools, Artificial Intelligence, and Predictive Analytics
Artificial intelligence (AI), Internet of Things (IoT), and predictive analytics are revolutionizing pharmaceutical supply chains by enhancing demand forecasting, inventory management, and real-time monitoring. Tools like digital twins, blockchain, and cloud computing improve transparency and responsiveness, while case studies such as Pfizer’s AI-enabled cold chain tracking highlight their impact.
In 2024, Roche and Novartis piloted AI-driven demand forecasting to reduce oncology drug backorders by over 15%. The FDA’s DSCSA digital pilot programs demonstrated blockchains’ ability to verify product movement across multiple tiers. Despite clear benefits, adoption faces challenges including high implementation costs, data privacy concerns, limited system interoperability, and regulatory complexities. Workforce training and ethical oversight are also necessary to ensure safe and practical integration. These technologies offer a pathway to more resilient, agile, and sustainable pharmaceutical supply networks.3,6
Evolving Regulatory Landscape
The regulatory environment for pharmaceutical supply chains is rapidly transforming. There is heightened emphasis on traceability and serialization, as mandated by laws like the US Drug Supply Chain Security Act, whose full enforcement began in November 2024. Simultaneously, regulatory agencies are integrating cybersecurity frameworks, such as those outlined by the National Institute of Standards and Technology (NIST), to safeguard digital infrastructure.
The EU’s Critical Medicines Act, finalized in 2024, introduced fast-track procedures for regionally manufactured APIs and required stress testing of supply chains for essential drugs. Global harmonization through bodies like the International Council for Harmonisation and the EU's Falsified Medicines Directive aims to streamline cross-border approvals. However, divergent national standards and compliance protocols remain significant barriers to adopting innovative technologies across global supply networks.3
Balancing Cost, Sustainability, and Resilience
Pharmaceutical supply chains face a complex trade-off between cost efficiency and long-term resilience. Public and regulatory expectations are pressuring manufacturers to invest in more secure and sustainable systems, even as production costs rise. Integrating environmental goals, such as reducing carbon emissions and adopting green chemistry, has become central to strategic planning. Total Cost of Ownership (TCO) models are increasingly favored over traditional low-cost sourcing, offering a fuller picture of long-term value. To reduce risk, companies are diversifying through dual sourcing and establishing regional hubs, aiming to enhance flexibility while aligning with sustainability and risk mitigation priorities.3
Conclusion
True resilience in pharmaceutical supply chains demands more than redundancy. It requires coordinated strategic investments, regulatory harmonization, and digital innovation backed by cross-border cooperation. As the global landscape evolves in 2025, companies integrating advanced technologies with robust sourcing strategies will be better equipped to meet market demands and patient care needs. The future lies not in isolated efforts but in collaborative ecosystems that foster transparency, adaptability, and sustainability. Building such resilient systems will safeguard public health, ensure equitable access to medicines, and protect against future global health emergencies.
References
- Socal, M. P., Sharfstein, J. M., & Greene, J. A. (2021). The pandemic and the supply chain: gaps in pharmaceutical production and distribution. American journal of public health, 111(4), 635-639. https://doi.org/10.2105/AJPH.2020.306138.
- Shukar, S., Zahoor, F., Hayat, K., Saeed, A., Gillani, A.H., Omer, S., Hu, S., Babar, Z.U.D., Fang, Y. and Yang, C., (2021). Drug shortage: causes, impact, and mitigation strategies. Frontiers in pharmacology, 12, 693426. https://doi.org/10.3389/fphar.2021.693426
- OECD (2024), Securing Medical Supply Chains in a Post-Pandemic World, OECD Health Policy Studies, OECD Publishing, Paris, https://doi.org/10.1787/119c59d9-en
- Adeyemo, K. S., & Bunmi, K. A. (2025). Evaluating Oncology Drug Shortages: Strengthening Active Pharmaceutical Ingredient Supply Chain Vulnerabilities in the United States. Current Journal of Applied Science and Technology, 44(1), 31-40.
- Mitchell, A. D. (2024). The geography of health: onshoring pharmaceutical manufacturing to address supply chain challenges. World Trade Review, 23(4), 519-531. https://doi.org/10.1017/S1474745624000387
- Kodumuru, R., Sarkar, S., Parepally, V., & Chandarana, J. (2025). Artificial Intelligence and Internet of Things Integration in Pharmaceutical Manufacturing: A Smart Synergy. Pharmaceutics, 17(3), 290 https://doi.org/10.3390/pharmaceutics17030290