SummaryData analysis finds that 53% of the API, in dollars, used in domestically consumed medicines came from the US in 2021, and 85% came from the US or Europe.
The US healthcare system relies on the domestic production of active pharmaceutical ingredients (API) supplemented by imports, as demonstrated by this and previous Avalere analyses. Avalere’s latest analysis finds that in 2021, the dollar value of API made in the US accounted for a majority (53%) of the $85.6 billion of API used in medicines consumed in the US. Avalere analyses show that the US has been the majority producer of API used in US-consumed medicines from at least 2019 through 2021.
In 2021, API made in European Union member states accounted for 29% of the dollar value of API in US-consumed medicines. The top five individual countries whose API was used in US-consumed medicines were Ireland (19%), China (7%), Germany (4%), Singapore (4%), and Switzerland (3%). While the share of API produced in the US has remained stable over the past three years, the share of API sourced from European Union member states has increased from 26% in 2019. Germany entered the top five in 2021 after being ranked ninth in 2019 with 1%; the other four countries (Ireland, China, Singapore, Switzerland) were also among the top five in both 2019 and 2020, with similar percentages in those prior years.
American policymakers have continued to focus on the US pharmaceutical supply chain and the role of API that is produced outside of the US and used in US-consumed medicines as finished pharmaceutical products (FPP). API used in medicines consumed in the US enter the supply chain in three ways: domestically manufactured API, API imported from other countries to domestically produce FPP, and API produced in other countries and then used to produce FPP imported by the US.
Avalere estimates that 53% of the $85.6 billion of API used in medicines consumed in the US were produced domestically in 2021 (Figure 1), a slight decrease from 54% in 2019 and consistent with 53% in 2020. Direct imports of API by US manufacturers to domestically produce FPP accounted for 28% of the API used in US-consumed medicines, and 19% comprised API produced in foreign countries and used in FPP imported into the US.
The US also exports API to many countries that manufacture pharmaceutical products that are then imported by the US. Avalere estimates that in 2021 about 3% of the API used in medicines consumed in the US were made in the US and then exported to another country for use in manufacturing FPP that were then consumed in the US.
From 2019 to 2021, the dollar value of API used in medicines consumed in the US remained largely the same, from $86.5 billion in 2019 to $85.6 billion in 2021 (Figure 2). The domestic production of API followed a similar trajectory, from $46.7 billion in 2019 to $45.4 billion in 2021. Directly imported API increased from $20.8 billion to $24.0 billion, while foreign-produced API that entered the US as imported FPP dropped from $19.0 billion to $16.3 billion.
By summing the total dollar value of API from each of the three categories by country of origin, Avalere estimates the top 15 countries that supply API used in US-consumed medicines (Table 1). In 2021, the US was the largest source of API in US-consumed medicines—supplying 2.8 times more than the next largest source (Ireland, at 19%). No single foreign country dominated the overall supply of API for the US market.
|Country||Percentage of Total API (Rank)|
|US||54% (1)||53% (1)||53% (1)|
|Ireland||19% (2)||22% (2)||19% (2)|
|China||6% (3)||6% (3)||7% (3)|
|Germany||1% (9)||2% (8)||4% (4)|
|Singapore||3% (4)||3% (4)||4% (5)|
|Switzerland||2% (6)||2% (5)||3% (6)|
|India||2% (8)||2% (9)||2% (7)|
|Belgium||2% (7)||2% (7)||2% (8)|
|Italy||1% (10)||1% (11)||2% (9)|
|France||1% (11)||1% (10)||1% (10)|
|United Kingdom||3% (5)||2% (6)||1% (11)|
|Spain||1% (13)||<1% (14)||<1% (12)|
|Japan||—||<1% (13)||<1% (13)|
|Denmark||—||<1% (15)||<1% (14)|
|Argentina||<1% (15)||—||<1% (15)|
|Netherlands||1% (12)||<1% (12)||—|
|South Korea||<1% (14)||—||—|
Overall, the analysis finds that API used in US-consumed medicines are both manufactured domestically and imported from other countries, with little change in the composition of domestic versus foreign-produced API over the three years.
Funding for this research was provided by Pharmaceutical Research and Manufacturers of America (PhRMA). Avalere retained full editorial control.
To learn more about the API market or Avalere’s data analysis capabilities, connect with us.
Using 2021 data, Avalere updated the analysis of international trade patterns between the US and other countries, consistent with the methodology previously used for the 2019 and 2020 analyses. For this analysis, US medicines and API include both branded and generic medicines, as well as many over-the-counter pharmaceutical products. In addition, API in this analysis includes many starter chemicals used in the production of medicines.
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