Why Your Medicine Might Not Be on the Shelf

It’s 2025, and you’re waiting for a prescription that’s been out of stock for weeks. Your doctor says it’s not a local pharmacy issue-it’s a global one. The pill you need is made in China, shipped through ports in Singapore, and assembled with parts from India. When one link breaks, the whole chain snaps. That’s not a hypothetical. It’s happening right now. In 2024, over 300 drug shortages were reported in the U.S. alone, and nearly 80% of them traced back to foreign manufacturing disruptions. This isn’t just about delays. It’s about lives.

The Hidden Cost of Cheap Drugs

For decades, the pharmaceutical industry chased the lowest price. If a generic antibiotic could be made for 70% less in China than in the U.S., companies moved production. It made sense on paper. But behind the savings was a fragile system. Today, 94% of the active pharmaceutical ingredients (APIs) used in U.S. medicines come from just two countries: China and India. That’s not diversification-it’s concentration. And when China shut down ports during its 2024 lockdowns, or when India restricted exports to protect its own supply, U.S. hospitals ran out of insulin, antibiotics, and heart medications. The cost savings? Gone. The human cost? Still here.

How Long Does It Take to Make a Pill?

It’s not just about where the medicine is made-it’s about how long it takes to get it here. In 2019, shipping a container from Shanghai to Los Angeles took about 20 days. Now, it takes 30. That’s a 50% increase. Why? Port congestion, geopolitical tensions, and new customs checks. But here’s the real problem: drug manufacturing isn’t like ordering a new phone. You can’t just buy a few extra units and store them. Many medicines have short shelf lives. Insulin lasts 28 days once opened. Antibiotics degrade over time. So companies don’t stockpile. They rely on just-in-time delivery. That means if a ship is delayed by two weeks, pharmacies run dry. And there’s no backup plan.

The Rise of Multi-Shoring-And Why It Matters

Some companies are finally waking up. By 2025, 50% of major pharmaceutical firms are shifting to multi-shoring: making the same drug in two or more countries. One company, for example, now produces its generic blood pressure medication in both India and Mexico. If India faces export restrictions, production shifts to Mexico. Lead times drop. Stockouts fall. That’s not magic-it’s strategy. And it’s working. Companies using multi-shoring saw 65% fewer disruption days in 2024 than those still relying on single-source suppliers. The catch? It costs more. Setting up a second facility can add 20-30% to production costs. But when you’re not running out of life-saving drugs, that cost looks a lot different.

Drug drones flying over the U.S.-Mexico border, one grounded by export restrictions, patient watches from hospital window.

Nearshoring to Mexico: A Real Alternative

Mexico isn’t just next door-it’s becoming a lifeline. Transportation costs from Mexico to the U.S. are 30-40% lower than from Asia. Customs clearance is faster. Cultural and regulatory alignment is stronger. And U.S. regulators already trust Mexican facilities-many already supply the U.S. market under FDA oversight. A Fortune 500 medical device maker moved its production of injectable antibiotics to a plant in Monterrey. Result? On-time delivery jumped to 99.2%. No more panic orders. No more hospital alerts. Just steady supply. Is it cheaper than China? No. But it’s reliable. And in medicine, reliability beats cost every time.

The Digital Shift: AI, IoT, and Blockchain in Drug Supply Chains

Technology isn’t just helping-it’s becoming essential. 68% of pharmaceutical companies now use AI to predict shortages before they happen. Sensors track temperature and humidity in real time across shipments. Blockchain verifies the origin of each batch of API, cutting counterfeit drugs by 65%. Digital twins simulate supply chain disruptions before they occur. These aren’t fancy buzzwords-they’re survival tools. A company that used to lose $12 million a year to drug shortages cut that number by 80% in 18 months by adding AI forecasting and blockchain tracking. The upfront cost? $4.2 million. The payoff? Lives saved and contracts kept.

Who’s Getting Left Behind?

Small manufacturers are paying the highest price. While big pharma can afford to build dual production lines or invest in AI, smaller companies can’t. Over 90% of global businesses are small or mid-sized-and they make up more than half of all drug production. When tariffs hit, or ports close, they don’t have the cash to pivot. In 2024, a small U.S. company making a generic antifungal cream went out of business after China raised export fees by 40%. Their product vanished from shelves. Patients had to switch to more expensive alternatives. No one warned them. No one helped them. That’s the human side of supply chain failure.

AI brain connected to global drug factories, red links breaking over Asia as green ones strengthen from Mexico and Canada.

Government Action-or Lack Thereof

The U.S. government has imposed 12 new tariff categories since 2024, targeting $340 billion in imports-including critical drug ingredients. But instead of reducing dependency, these tariffs made things worse. Companies scrambled to find alternatives, but couldn’t. The result? A 200-300% spike in prices for affected drugs. Meanwhile, the renegotiation of the USMCA in early 2025 is a rare positive step. It’s creating clearer rules for drug production in Mexico and Canada. But without federal incentives to build domestic API capacity, progress will be slow. The Strategic National Stockpile still holds only 3 months’ worth of most critical drugs. That’s not preparedness. That’s luck.

What Can You Do?

You can’t control global trade policies. But you can ask questions. When your pharmacist says a drug is unavailable, ask: “Where is it made?” If the answer is “China” or “India,” know that this isn’t random. It’s structural. Support companies that disclose their supply chain transparency. Talk to your doctor about alternatives that are made closer to home. Advocate for policies that fund domestic API production. And remember: the next time you’re told a medicine is “out of stock,” it’s not just bad luck. It’s a system failure-and it’s preventable.

Is Reshoring the Answer?

Some experts say yes. Others say no. Professor Richard Baldwin from IMD Business School points out that U.S. manufacturing wages are still 4.8 times higher than in China. Building a full drug production line in the U.S. would cost billions-and raise prices for everyone. So complete reshoring isn’t realistic. But partial reshoring? Yes. Strategic nearshoring? Absolutely. The goal isn’t to bring everything home. It’s to stop putting all your eggs in one basket. The world didn’t become interconnected by accident. But we’re learning the hard way that interconnection without redundancy is a recipe for disaster.

What’s Next?

By 2027, global GDP growth could recover to 3.1%-if trade tensions ease. But until then, drug shortages will keep happening. The solution isn’t waiting for a miracle. It’s building smarter, more resilient chains. Companies that invested in multi-shoring, digital tools, and local alternatives are already seeing results. Those who didn’t? They’re still waiting for the next port closure to hit.

Why are so many drugs made in China and India?

China and India dominate pharmaceutical manufacturing because they offer lower labor costs, large-scale production capacity, and decades of experience in producing active pharmaceutical ingredients (APIs). China alone supplies over 70% of the world’s APIs, while India is the largest producer of generic drugs. The cost advantage was too strong for Western companies to ignore, even as risks grew.

How do supply chain disruptions cause drug shortages?

Most drugs rely on multiple components from different countries. If a factory in China shuts down, or a port in India closes, the raw materials can’t reach U.S. manufacturers. Because many companies use just-in-time inventory systems, they don’t keep extra stock. When one part of the chain breaks, production stops-and shelves go empty.

Can the U.S. make its own drugs?

Yes, but it’s expensive. Building a single API plant in the U.S. can cost over $500 million. Labor and regulatory costs are much higher than in Asia. That’s why most companies don’t do it alone. The solution isn’t full reshoring-it’s strategic diversification: making key drugs in multiple countries, including Mexico and Eastern Europe, to reduce risk.

What’s the difference between nearshoring and reshoring?

Reshoring means bringing production back to the U.S. Nearshoring means moving production to a nearby country-like Mexico or Canada. Nearshoring reduces shipping time and costs while keeping production outside the U.S. It’s often more practical than reshoring because it balances cost, speed, and control.

Are generic drugs more vulnerable to shortages?

Yes. Generic drugs have thin profit margins, so manufacturers cut costs wherever they can-often by relying on a single overseas supplier. Brand-name drugs often have more resources to diversify supply chains. That’s why 80% of recent shortages involve generics, not brand-name medications.

What role does AI play in preventing drug shortages?

AI analyzes global data-port delays, weather patterns, political events, supplier performance-to predict where shortages might occur weeks or months in advance. Companies using AI have reduced forecast errors by up to 70%, allowing them to reorder earlier or switch suppliers before stocks run out.