CFR Report Warns U.S. Pharmaceutical Supply Chain Faces 'Rare Earths'-Level Threat from Chinese Dependence

The U.S. pharmaceutical supply chain faces a threat equal to the "rare earths" challenge already posed by China's exploitation of its dominance of those critical minerals, according to a major new report from the Council on Foreign Relations (搜索)搜索该词条 (CFR). The year-long study, "The Pharma Choke Point: How to Reduce U.S. Dependence on Chinese Pharmaceutical and Biotechnology Supply Chains," provides the first comprehensive policy framework assessing the risk of China weaponizing pharmaceutical supply chains as a tool of economic or political coercion outside of military conflict or public health emergencies.

"China has both the tools and demonstrated willingness to weaponize U.S. pharmaceutical dependence: the structural conditions enabling it run through nearly every tier of the pharmaceutical supply," the authors warn. "The question is not whether to act, but if the United States will manage to do so before a crisis makes the cost of decades of inaction unavoidable."

The report, coauthored by Thomas J. Bollyky, Rush Doshi, Olivia Kosloff, Prashant Yadav, and Elena Every, undertakes original analysis of U.S. trade data and United States Pharmacopeia ingredient sourcing records, mapping pharmaceutical supply chain dependencies tier by tier. It represents the first major policy effort to assess risks of peacetime weaponization—the deliberate withholding of essential pharmaceutical inputs as a tool of economic or political coercion.

Three Archetypes of Structural Dependence

The report identifies three distinct archetypes of pharmaceutical supply chain dependence, each requiring tailored policy responses.

Archetype One involves reliance on China for raw materials and upstream supplies for generic drugs. The defining characteristic is a choke point at the raw material or key starting material (KSM) stage that makes downstream diversification illusory. "When all downstream suppliers depend on that same concentrated input, downstream diversification (at the level of APIs or FDFs) provides no protection," the authors note.

China controls the raw or key starting materials for 94 percent of amoxicillin查看药品详情, 74 percent of heparin查看药品详情, and 70 percent of acetaminophen查看药品详情. Five Chinese companies, including the state-owned North China Pharmaceutical Corporation (搜索)搜索该词条, control over four-fifths of global 6-APA production, the critical intermediate for amoxicillin. For heparin, 80 percent of the global supply originates in China, with domestic U.S. collection accounting for less than 10 percent.

Archetype Two captures the erosion of U.S. biopharmaceutical manufacturing and clinical trial capacity to China. Chinese firms now hold approximately thirty-two of fifty-five late-stage monoclonal antibody programs globally. The Chinese firm WuXi Biologics查看公司主页 is engaged in nearly half of U.S. clients' drug development programs. China biotech licensing reached $137.7 billion in 2025, a tenfold increase from 2021.

Archetype Three concerns dependence on China for research and development infrastructure for sensitive biotechnology, particularly DNA synthesis. One of the three firms accounting for 86 percent of the global synthetic DNA supply is Chinese, and the other two maintain significant presence in China.

Pathways for Weaponization

The report details four scenarios through which China could leverage pharmaceutical supply chain dominance. The most direct involves restricting access to raw materials, KSMs, APIs, or finished dosage forms that go from China directly to the United States. Currently, an estimated 13 percent of U.S. generic drugs and their inputs are imported directly from China, but this figure underplays risk for vulnerable drugs including the immunosuppressant mycophenolate查看药品详情, broad-spectrum hospital antibiotics such as cefepime查看药品详情, and the acute heart failure agent dobutamine查看药品详情.

A second scenario involves China restricting raw materials to third countries like India, on which the United States relies for API or finished dosage form imports. Nearly 41 percent of KSMs used in U.S.-approved APIs come solely from China.

China could also restrict third countries from exporting products to the United States made with Chinese-origin materials, or restrict access to critical data and R&D infrastructure as first-in-human clinical trial activity increasingly shifts to China, whose share of global trial starts rose from 1 percent in 2009 to 30 percent in 2024.

Historical Precedent and Current Vulnerabilities

The report documents China's established pattern of supply chain weaponization. Beijing pioneered this playbook with rare-earth elements, halting shipments to Japan in 2010 following a maritime dispute. In April 2025, Beijing imposed formal controls on seven heavy rare earths, triggering sharp price surges and factory closures across Western allied nations. At least fifteen countries have experienced a form of Chinese supply chain coercion.

The 2022 amoxicillin查看药品详情 shortage—triggered by an ordinary demand surge under peacetime conditions—resulted in a 30.8 percent decrease in amoxicillin prescriptions in U.S. pediatric hospitals. During the 2011 norepinephrine查看药品详情 shortage, a study confirmed a 3.7 percent increase in in-hospital mortality among septic shock (搜索)搜索该疾病 patients. The 2008 heparin查看药品详情 contamination crisis, involving adulterated Chinese-manufactured API, resulted in eighty-one deaths in the United States.

U.S. Pharmacopeia estimates that nearly seven hundred medicines approved for use in the United States depend on at least one chemical produced solely in China, with KSMs for drugs treating statins, antibiotics, seizures, cancer, and HIV.

Policy Recommendations

The report proposes a layered policy framework combining near-term risk management with longer-term market interventions. For Archetype One, the authors recommend using the Strategic Active Pharmaceutical Ingredients Reserve to stockpile a minimum six-month supply of critical KSMs and APIs most at risk, while establishing allied coordination mechanisms for KSM production to distribute geographic risk.

Longer-term demand-side interventions include mandatory country-of-origin labeling for APIs, bolstered Buy America provisions with clear standards accounting for transshipment, and Medicare Part B premium reimbursement for domestically sourced medicines. On the supply side, the report recommends targeted pharmaceutical tariffs on products containing Chinese-sourced APIs and KSMs, rather than blanket tariffs that would disrupt essential generic supplies.

For Archetype Two, solutions include accelerating first-in-human clinical trials in the United States, funding advanced biologics manufacturing technologies, building contract research alternatives in allied countries, and bolstering the U.S. biomanufacturing workforce. Archetype Three solutions focus on improving DNA supply chain security, enhancing transparency, and increasing federal investment in next-generation DNA synthesis technologies.

"The true scope of U.S. vulnerability is systematically underestimated and often poorly understood," the authors conclude. "The question now is whether the United States will manage to do so before a crisis makes the cost of decades of inaction all too visible to the American public and exceedingly painful for everyone touched by the health care system to bear."