The National Security Rationale for Stockpiling Key Pharmaceutical Ingredients

The briefing identifies a critical national security risk stemming from the US pharmaceutical supply chain's dependence on China, which is the sole source for approximately 20% of API for vital medicines and 45% of KSM. It highlights that domestic generic manufacturing is severely underutilized, with plants operating at only half capacity, leaving the healthcare system and military vulnerable to shortages. The author proposes a phased strategy: immediately filling the Strategic Active Pharmaceutical Ingredient Reserve (SAPIR) with an 18-month supply of essential ingredients, providing grants and loans to transition manufacturing to US plants, and closing the 'Acetris loophole' to ensure 'manufactured in the U.S.' requires substantial transformation. The long-term goal is to achieve a domestic manufacturing capacity utilization of over 75% and reduce the number of drug shortages to below 50 within ten years.

• The United States faces a significant security threat due to its reliance on China for pharmaceutical precursors, with China serving as the sole source for about 20% of the API for the most vital medicines and approximately 45% of KSM.
• Domestic generic pharmaceutical manufacturing in the US is severely underutilized, with sites producing at only half of their capacity, which increases the risk of plant closures and further market concentration.
• The Strategic Active Pharmaceutical Ingredient Reserve (SAPIR), intended as a pharmaceutical equivalent to the Strategic Petroleum Reserve, is currently nearly empty, sitting at approximately 1% of its capacity.
• Pharmaceutical supply chain vulnerabilities have already impacted military readiness; for most of 2023, many operational military units were unable to obtain primary ketamine injection for sedation and analgesia.
• A legal loophole created by the Acetris Health, LLC v. United States case allows drugs to be labeled as 'manufactured' in the U.S. even if the API and all components are derived from TAA-banned countries like China and India.
• The Department of Defense's interim Pharmaceutical Supply Chain Risk Assessment found that 54% of national drug codes sourced by the DOD originated from China, India, or were of unknown origin, and were non-compliant with the Trade Agreement Act.

APA

Suarez, V. (2024). The National Security Rationale for Stockpiling Key Pharmaceutical Ingredients. The Council on Strategic Risks. https://councilonstrategicrisks.org/2024/03/05/the-national-security-rationale-for-stockpiling-key-pharmaceutical-ingredients/

Chicago

Suarez, Vic. The National Security Rationale for Stockpiling Key Pharmaceutical Ingredients. The Council on Strategic Risks, 2024. https://councilonstrategicrisks.org/2024/03/05/the-national-security-rationale-for-stockpiling-key-pharmaceutical-ingredients/.

Wikipedia

{{cite report |last1=Suarez |first1=Vic |title=The National Security Rationale for Stockpiling Key Pharmaceutical Ingredients |publisher=The Council on Strategic Risks |date=5 March 2024 |url=https://councilonstrategicrisks.org/2024/03/05/the-national-security-rationale-for-stockpiling-key-pharmaceutical-ingredients/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{suarez2024national, author = {Suarez, Vic}, title = {{The National Security Rationale for Stockpiling Key Pharmaceutical Ingredients}}, institution = {The Council on Strategic Risks}, year = {2024}, month = mar, url = {https://councilonstrategicrisks.org/2024/03/05/the-national-security-rationale-for-stockpiling-key-pharmaceutical-ingredients/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }