Report Warns U.S. Pharma Sector Remains Reliant on Chinese Supply Chains

NEW DELHI — The U.S. pharmaceutical and biotechnology sector has become heavily dependent on Chinese inputs, creating supply chain risks for critical medicines, according to a report.

An article in The National Interest, a U.S.-based online publication, cited heparin, a widely used blood thinner, as an example of the vulnerability. The report said about 70% of the U.S. supply of the drug originates in China.

Heparin is used in hospitals and for patients undergoing dialysis and other procedures where blood clots must be prevented. The article said the two U.S.-based plants that produce heparin active pharmaceutical ingredients, SPL in Wisconsin and Smithfield BioScience in Ohio, are now subsidiaries of Chinese parent companies. It said there is no commercial-scale, independently American-owned producer.

The report also pointed to the 2007 and 2008 heparin contamination crisis, when contaminated Chinese-origin heparin was linked to the deaths of at least 149 Americans and reached 11 countries. The contaminant was traced to Changzhou, Jiangsu, though Chinese officials denied that the contamination originated in China and refused to grant the U.S. Food and Drug Administration access for a criminal investigation, according to the article.

The article said the deaths did not lead to a major restructuring of the supply chain. It also said current shortages have not reversed the trend, as companies in the U.S. continue to exit production of the drug.

“Sources of production are thinning, not diversifying. Every exit narrows the field that Chinese API producers must satisfy and raises the share of American patients whose treatment depends on a supply chain Washington does not control,” the article said.

The report also cited a May 2026 analysis by the Rhodium Group of China’s 15th Five-Year Plan. According to the article, Rhodium concluded that Beijing “is actively reinforcing its control over value chains using regulations and economic coercion to pre-empt de-risking and lock in its dominance across critical supply chains.” The analysis found that the number of products in which China is “highly dominant” rose from 192 in 2021 to 315 in 2024.

China’s 15th Five-Year Plan, issued in March 2026, identifies biomanufacturing as one of the sectors targeted for “decisive breakthroughs,” the article said. The report argued that this indicates Beijing intends to move further up the pharmaceutical value chain as U.S. supply diversification efforts lag.

The article also compared the pharmaceutical supply chain risk to China’s role in rare earths and fertilizer, saying Beijing has used dominance in those sectors to pressure trading partners and contribute to higher prices.

According to the report, a manufacturing quality failure or diplomatic dispute could disrupt Chinese heparin supplies, with serious consequences for patients who rely on the drug, including those on dialysis.

The article said an August 2025 executive order establishing a Strategic Active Pharmaceutical Ingredients Reserve directs the Administration for Strategic Preparedness and Response to stockpile six months’ worth of APIs for roughly two dozen critical drugs, with a preference for domestic manufacturing. But it said the flagship federal investment in pharmaceutical resilience, the Phlow-BARDA program, relies on continuous-flow chemistry, a technology suited to small-molecule drugs but not to heparin, which is a biologically derived polysaccharide extracted from animal tissue. (Source: IANS)