Tariffs are Hitting the Global Supply Chain of America’s Essential Medicines

Americans are increasingly reliant on prescription medications. 70% of U.S. adults take at least one prescription medication a day, a 14% increase from 2019 data, and 24% of Americans require four or more prescription medications daily, up from 18%. It’s not just American adults who need pharmaceuticals to function. Anywhere from 25%-43% of American children rely on prescription medications to manage a chronic health condition from asthma to ADHD to diabetes and behavioral disorders. 

Tariffs Will Hurt Suppliers and Consumers

These Americans and their caretakers face extra anxiety these days as 145% and 125% tariffs on and from China are certain to force price increases on the medicines they need. That’s because much of our pharmaceutical supply chain and biosciences research comes through China.  

Already, around three out of every ten Americans surveyed skip doses, forgo refills, or substitute an over-the-counter medication because of high prices. Should the U.S. and China fail to de-escalate tariffs—or at least exclude pharmaceuticals—a large population of vulnerable Americans will suffer higher costs and worsening health. 

Bilateral Trade Benefits American and Chinese Consumers 

Generic and biosimilar drugs made up 90% of all prescriptions filled in the U.S in 2023 and saved Americans $3 trillion over a decade. China is a big supplier from the finished product to active pharmaceutical ingredients (APIs), the chemical foundations of a drug. China supplies 95% of the ibuprofen imported into the U.S., 91% of hydrocortisone, 70% of acetaminophen, and up to 45% of penicillin.

Overall, China holds 12% of the global pharmaceutical market and contributes 23% of the global innovative drug pipeline. Chinese researchers publish around 60% of the world’s high impact papers in synthetic biology—a field reshaping how drugs are discovered and manufactured. 

But Chinese consumers rely equally on American pharmaceutical exports. In 2022, the U.S. exported $9.3 billion worth of medicines to China, with advanced drugs like cancer treatments and immunological therapies leading the way. U.S. pharmaceuticals provide more than 65% of China’s market for these specialized imports. 

Tariffs will tear through the supply chain with higher costs and disruptions for manufacturers, insurers, hospitals, and people on both sides of the Pacific Ocean. 

Quality Management Systems Technologies Help Biosciences Companies Adapt

In today’s fast-evolving pharmaceutical landscape, the ability to adapt quickly without compromising quality is critical. That’s where intelligent Quality Management Systems (QMS) come in. Intellect’s AI-powered QMS platform empowers pharmaceutical companies to proactively manage risk, maintain compliance, and uphold product quality—even during major shifts like supply chain overhauls. With upcoming U.S. tariffs posing new sourcing and cost challenges, an AI-driven QMS can help teams pivot efficiently while ensuring regulatory standards and quality benchmarks remain intact.

✅ Get ahead of Risks

A QMS oversees processes for risk assessment and management, which supports business continuity even as conditions change. This helps companies proactively spot potential vulnerabilities and risks within their supply chain. These risk assessments help quality teams to create contingency plans and alternative sourcing to minimize the impact of disruptions. 

✅ Optimize Supply Chain Controls 

• Supplier qualification and monitoring: A QMS outlines procedures for evaluating and selecting reliable suppliers. It also includes ongoing monitoring of supplier performance and quality to ensure they meet established standards, even amidst changes.   
• Incoming material inspection: Defined quality control processes within a QMS ensure that any changes in raw materials or components sourced from new or existing suppliers are thoroughly inspected and tested to maintain product quality.
• Change control for materials: If a change in supplier or material is necessary, the QMS change control process ensures that the change is evaluated for its impact on product quality, safety, and regulatory compliance before implementation.

✅ Maintain Regulatory Compliance Standards

Biosciences companies operate in one of the most stringently regulated sectors. A QMS helps teams ensure that supply chain changes meet quality standards and compliance obligations. Robust record-keeping and traceability from a QMS allow companies to track materials sourcing. This prepares companies for audits and in cases when investigations arise for potential quality issues resulting from supply chain changes.

Learn how Intellect can help biosciences leaders adapt their operations as tariffs rise.