Foreign control of antibiotic supply: American and European import reliance and systemic vulnerabilities

Executive summary

Context:

• The United States (US) and countries in Europe now depend overwhelmingly on foreign suppliers for the antibiotics that modern medicine requires. Nowhere is this dependence more acute than in the upstream stage of production: both the US and European nations rely almost entirely on the People’s Republic of China (PRC) for the Active Pharmaceutical Ingredients (APIs) that form the molecular foundation of all antibiotics. Without these inputs, no Finished-Dosage Form (FDF) antibiotics can be manufactured – whether in India, Europe, or the US. This extreme upstream reliance means the stability of American and European health systems is tied directly to the continuity of Chinese industrial operations, regulatory decisions, and geopolitical posture.
  
• This vulnerability is amplified by the architecture of the global supply chain: The PRC controls the upstream API stage; India formulates the downstream FDF antibiotics; and the US and European countries import the result. What appears to be a multi-country supply network is, in practice, a single chokepoint with minimal redundancy and heavy firm-level concentration. This system operates through four reinforcing layers of vulnerability:
  
  • Layer 1: The US and European states rely on India and the PRC for FDF antibiotics.
  • Layer 2: Downstream supply is concentrated among a small number of Indian manufacturers. 
  • Layer 3: These manufacturers depend almost entirely on the PRC for upstream antibiotic APIs. 
  • Layer 4: Within the PRC, production itself is concentrated among a limited set of firms responsible for the majority of global API output.
    
• Each layer compounds the risk, leaving the global antibiotic supply chain highly concentrated and fragile. A shutdown, contamination event, or export interruption at even a small number of Chinese API facilities could disrupt entire antibiotic classes worldwide. Downstream disruptions in India would compound the impact. The US and European countries are thus exposed not only to changes in foreign output, but also to the potentially unforeseen regulatory and industrial shifts of a handful of companies thousands of miles away. This exposure includes drug quality and safety risks, as US Food and Drug Administration (FDA) enforcement actions have shown that major exporters have supplied adulterated or improperly tested medicines into US and European markets, including the Ranbaxy case discussed in this Report.
  
• Despite this fragility, America and European countries still retain critical industrial footholds – particularly a small number of facilities capable of fermentation, chemical synthesis, and sterile-injectable production. This includes the last major fully vertically integrated production site for penicillin-class antibiotics in Europe; that is, a facility that performs the complete production chain from fermentation of Penicillin G through to conversion to 6-aminopenicillanic acid (6-APA), synthesis of finished APIs, and formulation and packaging of FDF antibiotics.
  
• These remaining assets are strategically irreplaceable. They form the industrial core from which upstream antibiotic sovereignty can be rebuilt. With the right policies and market signals, these facilities can anchor renewed API capacity, restore domestic production, and expand downstream formulation capabilities. The US and European nations face a profound strategic vulnerability, but also a clear opportunity to rebuild leadership in the essential stages of antibiotic manufacturing.
  
• Addressing this vulnerability requires a coordinated policy framework that strengthens domestic and allied producers, corrects distorted market dynamics, and ensures US and European manufacturers can operate viably at scale. This includes targeted trade tools to counter persistent price suppression, procurement reforms that reward reliability over lowest cost, stronger oversight and transparency requirements for foreign supply, and joint US-European Union (EU) investment in fermentation, synthesis, and formulation infrastructure. Fermentation underpins the production of core antibiotic APIs and intermediates, and is both capital-intensive and highly concentrated. As this study demonstrates, approximately 90% of global 6-APA production capacity is located in the PRC, making this stage the primary upstream chokepoint in the modern antibiotic supply chain. Together, this coordinated policy framework would restore the upstream resilience that both the US and several European countries have lost and reduce their structural dependence on foreign-controlled supply.
  
• American and European reliance on the PRC for antibiotic APIs is the product of past decisions, but this can be corrected. Rebuilding API capacity within allied jurisdictions is both possible and necessary. This requires preserving strategic penicillin manufacturing, particularly the Sandoz Kundl plant in Austria – the last remaining large-scale vertically integrated penicillin production site in Europe and the foundation for rebuilding secure antibiotic API capacity. By capitalising on the capabilities that remain, the US and European countries can regain control of the antibiotic supply chain, and secure the foundations of modern medicine and national security.

Key findings:

• The PRC accounts for an estimated 80-90% of global antibiotic API production, reflecting dominance in large-scale, fermentation-based upstream manufacturing.
  
• The PRC accounts for 87% of US antibiotic API imports, and 67% for the EU and European Free Trade Association (EFTA).
  
• Approximately 90% of global 6-APA production capacity is located in the PRC, making penicillin-class antibiotics uniquely exposed to upstream conditions.
  
• Only seven 6-APA manufacturing sites exist worldwide, five of which are located in the PRC, creating a severe, facility-level chokepoint in the global penicillin supply chain.
  
• India and the PRC together supply 77% of all FDF antibiotics imports into the EU+EFTA, and nearly 40% of US imports.
  
• The PRC supplies 91.3% of all antibiotic APIs imported into India, tying global FDF antibiotic production to Chinese upstream inputs.
  
• Upstream dependence is further concentrated at the firm level: the top four Chinese API suppliers – North China Pharma, Sinobright Pharma, MS, and Centrient Pharma – account for 54% of India’s antibiotic API imports, leaving global supply dependent on a small number of individual companies.
  
• Downstream supply is likewise concentrated, with Aurobindo Pharma supplying 32% of all FDF antibiotics imported into the US. Aurobindo (27.2%) and Micro Labs (25.4%) together supply 52.6% of FDF antibiotics imported into the EU+EFTA.

Recommendations:

To reduce dependence on foreign-controlled antibiotics supply chains, free and open nations’ governments in the US and Europe should:

1. Use targeted tariff-rate quotas to stabilise the market and counter low-cost foreign pricing;
2. Deploy targeted financial incentives to restart and expand antibiotic manufacturing capacity;
3. Strengthen oversight and quality assurance for imported antibiotics;
4. Align procurement with supply-security goals;
5. Integrate antibiotic supply security into North Atlantic Treaty Organisation (NATO) and allied force readiness planning
6. Build coordinated US-EU+EFTA antibiotic manufacturing and supply networks.