Supply chain resilience remains top of mind across the pharmaceutical industry as geopolitical instability continues to pose threats to production and distribution of lifesaving medicines.
Even so, many companies still have not implemented effective strategies for ensuring supply chain resilience and continue to rely on single-site production, packaging, and storage and single sourcing of critical raw materials.
Use of digital tools that provide real-time insight into activities across the entire supply chain and support predictive analytics are essential to assuring supply chain resilience given the complexity of the pharma supply chain.
Collaboration and cooperation across the entire value chain is also key to realize true supply chain resilience for the entire pharma industry.
Supply Chain Resilience in 2025
In an article published in Pharma’s Almanac in 2025, we examined the topic of supply chain resilience, considering why it matters in the pharmaceutical industry (to prevent drug shortages) and the major threats to the pharma supply chain: natural disasters; pandemics and other global health emergencies; geopolitical instability due to conflicts, trade tensions, and economic sanctions; insufficient capacity due to labor shortages, surges in demand, or plant closures due to regulatory sanctions; technological issues, such as cyberattacks; mergers and acquisitions; and financial instability.
Key trends in 2025 that continues today is increasing operational and supply chain complexity due to rising demand, including for more complex, novel modalities; globalization of the industry; and greater reliance on outsourcing, patricianly to low-cost providers in China and India. The COVID-19 pandemic exposed the risks inherent to the pharma supply chain due to increasing emphasis on lean operations and just-in-time deliveries. Growing reliance on single, end-to-end partners has also raised concerns when those partners have all operations in a single location.
Solutions for improving pharma supply chain resilience being explored and implemented in 2025 included building of stockpiles, validation of transport routes, dual/multi-sourcing, and increasing digitalization and automation to improve efficiency, better understand comprehensive supply chains and predict potential weak points, increase transparency across the value chain, and provide access to real-time information to support faster responses when issues arise.
In this article, we revisit the topic of supply chain resilience and what progress, if any, the pharma industry has made in advancing this crucial capability.
Impact of the U.S.–Iran War
In 2026, the pharmaceutical sector has been challenged by the U.S. war with Iran and the closure of the Strait of Hormuz. This latest war, when added to challenges created by the Ukraine war, rising raw materials costs, energy volatility, and new tariffs/trade issues, means even more pressure is being placed on pharmaceutical supply chains, many of which, it appears, remain ill-prepared to accommodate such shocks. “Systematic, ongoing scenario planning has still not been rolled out at scale.”1 The U.S.–Iran war has contributed to further increases in raw material and component prices, key ingredient availability issues, and increasing energy costs.2 The threat of air strikes has led many companies to reroute air deliveries, leading to delays. Temperature-sensitive drugs, most notably expensive biologics, also face cold-chain management issues. The overall result has been higher drug prices and potential additional drug shortages — not just for the United States.
Digital Tools Are More Important Than Ever
The challenges to realizing pharma supply chain resilience are numerous, including significant complexity and associated inefficiencies and lack of transparency and willingness to share information.3 The long lead times, high costs of drug products, need to comply with extensive regulatory requirements, and limited number of suppliers for many raw materials, active pharmaceutical ingredients (APIs), and drug products further complicate the issues. Multi-sourcing, establishing inventory and capacity buffers, and reshoring of manufacturing are all strategies that can help improve supply chain security.
However, they do not provide real-time visibility into pharmaceutical supply chains, which is essential to overcoming these challenges and achieving resilience in the face of unexpected disruptions, the risk of which is increasing in today’s world.3,4 Big data analytics, the Internet of Things (IoT), artificial intelligence (AI), machine learning, predictive modeling, and blockchain technologies provide mechanisms for sensing, monitoring, and analyzing supply chain data in real time to support data-driven decision-making and rapid response and adjustment of supply chains when required — potentially enhancing their overall performance.
By enhancing data sharing and communication, they enable the development of more integrated and better managed supply chains including all stakeholders (e.g., suppliers, manufacturers, distributors, retailers, and logistics providers). Automation reduces manual errors and increases efficiency. Simulations allow stress testing of supply chains to identify gaps and further increase supply chain resilience.
Potential Negative Impacts of the BIOSECURE Act and U.S. Tariffs
The pharmaceutical industry’s heavy reliance of imports from Asia and Asian contract manufacturing organizations is one of the biggest challenges to establishing supply chain resilience on a global scale. The United States alone imported nearly $213 billion in pharmaceutical materials in 2024, including approximately 70% of the APIs used to make final drug products (largely generics), which all came from China.5 The U.S. Pharmacopeia estimates that the U.S. manufactures just 15% of APIs in branded drug prescriptions sold in the country, with slightly more that 40% coming from Europe.6
The Trump administration is attempting to rectify this situation through the Most-Favored-Nation (MFN) and tariff policies. The MFN requires the U.S. Department of Health and Human Services to base drug prices in America in accordance with the lowest prices paid for equivalent products in other high-income nations.7 If companies do charge lower process in other countries/markets, they will face tariffs.8
Separately, in September 2025 President Trump announced 100% tariffs on imported branded or patented pharmaceuticals (so excluding generics) effective October 1 of that year. However, any companies with construction of manufacturing facilities in the U.S. underway could avoid the tariffs.9
The unilateral trade and tariff policies instituted by the Trump administration in the United States, while aiming to address a key supply chain issue, have the potential to impact not only U.S. drug makers but the entire global pharmaceutical supply chain in a negative manner.5 Advancement of the BIOSECURE Act is further complicating the situation by limiting outsourcing to Chinese-based contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs). There is significant concern that these combined moves will ultimately lead to notable structural disruptions that will limit access to critical reagents, assay kits, and comparator drugs for use in R&D and clinical development; drive up costs of APIs and intermediates used to produce branded drug products; place local fill/finish facilities under pressure; increase risks for advanced therapies; and impact patient access to medications.5,10 In addition to increasing U.S. drug prices, tariffs are predicted to worsen current drug shortages, increase the cost of outsourcing, and drive manufacturers to seek alternate markets.11 Delays in investments could also result due to the uncertainties surround how the tariffs will be implemented.9
Still Lack of Consensus on Measurement Tools
Determining the progress made in achieving greater pharmaceutical supply chain resilience requires access to effective measurement tools that are accepted by all stakeholders. A lack of agreement on appropriate measurement methods remains an issue in the industry.12 Most companies use internal surveys and lists to assess their readiness to respond to and recover from unexpected supply chain disruptions, with little standardization. In addition, many companies struggle to complete effective self-assessments owing to difficulties in obtaining necessary information from their suppliers, who typically resist disclosure of their own shortcomings.
Measurement tools are needed that focus on specific aspects of supply chain resilience performance and be tailored to specific types of players in the supply chain.12 They should also be developed cooperatively, leveraging the knowledge of experts across the supply chain to ensure appropriateness and build trust regarding data usage. Only with this cooperative approach will metrics for assessing supply chain resilience be established that are aligned across the entire value chain and garner the level of data sharing essential to completing evaluations that provide useful insights.
Many of the Same Issues Remain
As complexity increases across the board in the pharmaceutical industry — at the molecular level, with respect to modality diversity, with regard to manufacturing and analytics, in the context of regulatory requirements, and in the supply chain, managing disruptions in any of these areas becomes more difficult and takes much longer, leading to increasingly severe consequences, particularly for patients. Supply chain resilience is therefore of increasing relevant but also more challenging to achieve.
That truth is apparent in the fact that many pharma manufacturers continue to struggle to achieve even an adequate level of preparedness.13 Single-sourcing for critical raw materials remains a common issue. Where redundant capacity is established, it is often at the same site or nearby, reducing its ability to mitigate loss of capacity. In addition, redundant production capacity is often marked for many different products, which creates rather than alleviates supply issues. Few companies consider packaging needs and warehousing/storage when pursuing supply chain resilience planning, leading to a lack of redundancy. Finally, contingency plans often cover overall considerations but lack detail on the product level.
Not surprisingly, at the end of 2025, anxiety across the industry regarding the uncertainties around the pharma supply chain remained strong.14 One positive outcome has been increased comprehensive supply chain auditing all the way to providers of key raw materials and their suppliers, along with more multi-sourcing and building of safety stocks. An important remaining challenge to shifting purchasing away from China and India is, however, the lack of U.S. and European suppliers for many APIs and critical raw materials.
The CDMO Perspective
Contract service providers (e.g., CROs, contract manufacturing organizations (CMOs), CDMOs)) play a critical and increasing role in the pharmaceutical supply chain. They, like drug developers/sponsors, must address supply chain resilience as a key operational imperative. Many are taking steps to do so using a myriad of strategies, from making acquisitions to expanding existing facilities to building new production sites.
Samsung Biologics, for instance, made its first entry into U.S. manufacturing with the acquisition of a biologic drug product facility in Maryland from GSK in March 2026. This move was made in part in response to growing client requests and due to the current geopolitical landscape, shifting trade policies, and need to assure supply chain resilience.15 Having the U.S. facility provides redundant manufacturing capabilities within Samsung’s network, which is implementing the same quality management systems, digital manufacturing, and so on.
FUJIFILM Biotechnologies, meanwhile, expanded its biologics facility in the UK and opened the Bioprocess Innovation Centre UK, supporting high-throughput and continuous process development.15 The company prefers to build its own sites rather than acquire existing facilities so it can custom design them to fit its network and include the exact same equipment and quality and operating systems.
The key for both of these CDMOs is their network approach, which enables redundancy on a global scale, allowing local production within a connected and harmonized site network. The ability to provide variable capacity at multiple locations and support projects across scales and phases is another benefit. Both CDMOs have the ability to provide regional and global support for projects from preclinical through commercial for traditional to novel modalities for customers located around the world.
CDMOs at the forefront of establishing effective supply chain resilience strategies don’t only pursue redundant production capabilities.11,16 They also implement digital solutions that ensure end-to-end visibility and real-time monitoring; leverage predictive analytics to implement a more proactive approach to supply chain planning; use a network of suppliers to ensure diversification and redundancy in these operations; emphasize the importance of strong relationships and collaboration with all members of the value chain, including suppliers; and pursue sustainable and ethical sourcing practices.
Adopting a “Just-in-Case” Philosophy
The fragility of the just-in-time, lean approach to pharma supply chain management was clearly revealed during the COVID-19 pandemic and several other natural disasters and geopolitical incidents that have occurred over the last decade. This strategy does not lead to supply chain resilience but rather precludes any ability to respond and resolve unexpected disruptions.
The better approach is based on a “just-in-case”17 philosophy that maximizes efficiencies but not at the expense of preparedness.16 Investment in safety stocks and redundant manufacturing capacities allows the supply of drug products to continue despite losses in production capabilities at main facilities or incapacities in distribution avenues. Indeed, the best solution continues to include a combination of some manufacturing redundancy (e.g., multi-sourcing, capacity reserves) coupled with flexibility (e.g., people, thought processes, technologies) through construction of a dynamic supply chain.18,19
