New visibility into upstream API and key starting material producers lays the groundwork for origin labeling, procurement preferences, and reshoring incentives
WASHINGTON, D.C. — The Coalition for a Prosperous America (CPA) today welcomed a proposed rule issued by the Food and Drug Administration that would require foreign establishments manufacturing active pharmaceutical ingredients (APIs) and other drug components to register with the FDA and list their products — even when those ingredients are shipped to a third country for finishing before entering the United States. The rule closes a long-standing blind spot that has left America’s own regulators unable to see the upstream chemistry behind the medicines Americans take every day.
Under the FDA’s prior interpretation, a foreign plant producing an API solely for sale to another foreign manufacturer had no obligation to register with the agency — even if the finished medicine ultimately landed on an American pharmacy shelf. A Chinese API facility supplying an Indian or European finished-dose plant was, in effect, invisible to the U.S. government. The FDA now acknowledges that this gap has hindered its oversight of a growing share of the drug supply chain, and notes that nearly 60 percent of registered drug establishments are located outside the United States.
That blind spot has concealed the central deception of the global pharmaceutical trade: the country stamped on the box describes the last step in production, not the chemistry inside the pill. A medicine finished in Europe is not necessarily a European medicine. A generic finished in India is very often a Chinese medicine in all but name. As CPA has documented, medications stamped “Made in America” or “Made in India” are frequently Chinese in chemical origin. India supplies roughly half of all finished generic drugs consumed in the United States, yet depends on China for 70 to 80 percent of its APIs, and about 70 percent of the APIs attributed to India in fact originate in Chinese labs. China controls 80 to 90 percent of global API production for key antibiotics and dominates the key starting materials (KSMs) that sit even further upstream.
“You cannot rebuild what you cannot see,” said Jon Toomey, President of CPA. “For years, the most critical link in our drug supply chain — the upstream chemistry — has been invisible to our own regulators. A medicine finished in Europe is not necessarily a European medicine, and this rule finally begins to expose that fiction.”
The consequences of that opacity are not theoretical. A Department of Defense assessment of 1,744 drug families found that at least 22 percent had unknown API origin, and 54 percent of government-purchased pharmaceuticals were rated high or very high risk because of reliance on China, India, or sourcing that could not be traced at all. The federal government, in other words, has been buying medicines for American servicemembers and veterans without knowing where they actually come from. Meanwhile, U.S. domestic pharmaceutical production has collapsed from 83.7 percent of domestic consumption in 2002 to just 37.1 percent in 2024.
“But transparency is a foundation, not a finish line,” Toomey added. “Knowing where our medicines truly originate is what makes real policy possible — origin labeling so patients and hospitals know what they are buying, procurement preferences that reward American producers from KSM to finished dose, and the tariffs and industrial policy incentives required to rebuild domestic capacity. The FDA should finalize this rule promptly and enforce it rigorously.”
CPA has long called for full pharmaceutical supply chain transparency, including API origin labeling and manufacturing site disclosure. The proposed rule supplies the underlying data infrastructure that such policies require. It also carries a meaningful enforcement mechanism: if an upstream foreign establishment fails to register, the finished drug built from its ingredients is deemed misbranded and may be refused admission at the border. Separately, the rule would create a streamlined registration pathway for distributed and mobile manufacturing units — an advanced production model that can strengthen domestic surge capacity and help address drug shortages.
The comment period on the proposed rule (Docket No. FDA-2025-N-6075) closes on September 11, 2026, and CPA intends to submit comments. CPA urges the administration to pair this transparency measure with substantive action to rebuild domestic capacity — including extending Section 232 pharmaceutical tariffs to generic drugs, APIs, and key starting materials, establishing procurement preferences for American-made essential medicines, and enacting origin labeling so that no American patient, hospital, or federal agency is left guessing where their medicine was truly made. Visibility into the supply chain is the necessary first step. It is not a substitute for rebuilding it.
# # #
