Global chokepoints put US medical supplies at risk

For generations, New Jersey was the primary hub for the U.S. pharmaceutical industry, with the state once hailed as the “Medicine Chest of the World.” However, with globalization, the drive for cheaper labor and cheaper supplies pushed production overseas, leading to the precarious medical supply chain issues that the U.S. faces today.

“The pharmaceutical supply chain is heavily reliant on India and China,” said Jeffrey Covington, director of healthcare research and data analytics for BOK Financial®. “That sort of concentration creates single points of failure. We cannot afford to rely on supply chains that are this fragile or that may be weaponized during times of heightened geopolitical risk.”

This risk from single points of failure is across the spectrum, ranging from basic medical supplies to the pharmaceuticals themselves to even the sophisticated packaging necessary for some injectables, he noted. Some of the fallout from this supply-chain vulnerability has been seen already. For two-and-a-half years, packaging shortages for injectables disrupted distribution of some weight-loss and diabetes drugs. In 2024, saline shortages caused by Hurricane Helene forced some hospitals nationwide to delay elective procedures so emergency surgeries and dialysis could continue.

Meanwhile, the U.S. Food and Drug Administration (FDA) currently lists around 75 pharmaceuticals on its Drug Shortage Database, including atropine sulfate (used to treat severe allergic reactions and slow heart rates), attention-deficit/hyperactivity disorder (ADHD) drugs, injectable opioid pain treatments and some chemotherapy drugs.

And with geopolitical tensions rising and deglobalization underway, the risks posed by the U.S.’s fragile medical supply chain are on center stage. Yet even efforts meant to alleviate the issue aren’t always straightforward or pain-free, experts caution.

For instance, in order to reduce its dependence on China, the U.S. has been leaning more heavily on India for generic pharmaceuticals in recent years. However, a 2024 report put together ahead of Congressional hearings on the topic found that the India-based pharmaceutical company that supplies the most generic drugs by volume to the U.S. gets about 55% of its raw materials for ingredients from China.

In other words, the U.S. is dependent on China for its medical supply needs sometimes even when it thinks it isn’t.

U.S. taking steps on path ahead—but it won’t be fast or easy

As with other goods seen as essential to national security, such as semiconductors, the White House has been turning to policy changes to try to alleviate America’s medical supply chain vulnerabilities.

One such move has been tariffs, but tariff policy is still shifting . In February 2026, the Supreme Court struck down the broad 2025 tariffs, wiping out the across‑the‑board 10% duty and similar measures. However, this decision didn’t end all tariffs: other trade rules still apply, especially for medical devices and equipment that healthcare systems rely on. The Trump administration also moved immediately to replace the voided tariffs under different laws, including a new 10% global tariff plan, meaning supply‑chain costs and delays may still affect hospitals, pharma manufacturers and device buyers.

In another move, the federal government had designated some pharmaceuticals and medical devices as essential so as to use the Defense Production Act to increase production, granting federal authority to fast track permitting and expand access to government-backed financing for new U.S. facilities.

Amid these efforts to strengthen domestic production, Covington sees signs that supply-side reforms could soon be balanced by cost relief. “Drugs went up at the end of 2025 and are projected to come down in 2026,” he said. “It’s very drug dependent, but overall we should see stabilization.” Medicare’s upcoming drug price negotiations and the Most Favored Nation framework may help temper cost pressures even as manufacturers adjust to a changing regulatory and tariff environment.

To stay ahead of these changes, Covington said that healthcare leadership should work closely with their Group Purchasing Organizations (GPOs), key vendors and other supply‑chain partners to:

• Map out where their critical drugs, devices and inputs come from.
• Identify single‑source or high‑risk dependencies and create contingency plans before shortages occur. This includes stress‑testing inventory strategies, outlining substitute options and preparing for potential supply shocks driven by geopolitics, weather events or manufacturing disruptions.

Still, he cautions that the long-term work ahead is substantial. “These are highly complex manufacturing processes with huge capital requirements,” he said. And without enough specialized labor, “we don’t currently have the workforce to reshore at scale.” For now, the U.S. is taking meaningful steps but rebuilding a secure, resilient medical supply chain will take sustained effort.