Import Alert: India Drug Maker Recalls Cholesterol Meds Due To Manufacturing Defects

The trend continues: 2026 is starting off with more voluntary recalls of imported drugs, with Indian labs being the main culprits. Recalls on imports, coupled with U.S. dependence on imported generics, is a serious supply chain risk.

Zydus Pharmaceuticals, one of India’s largest generic drug makers, recalled over 22,000 bottles of a cholesterol medication on Dec. 30, 2025. AvKare, a Tennessee-based pharmaceuticals distribution company that relies on imports, recalled around 7,900 cartons of Rosuvastatin, a widely used generic statin, a day later. Although it is unclear where AvKare’s product comes from, Zydus contracted their Icosapent Ethyl capsules to Softgel Healthcare, an India-based contract development and manufacturing corporation (CDMO). For those not familiar with the pharma industry lingo, a CDMO is a company hired by brand and generic name drug companies to conduct lab work and often make finished drugs.

Luckily, none of these drugs are currently in short supply. Nor are they considered a critical medication by FDA standards. However, the Zydus recall is like a woodpecker continually pounding into a tree trunk. Eventually, it pokes a hole in the wood.

Recalls take drugs off the shelf. Sometimes, the U.S. has nothing to replace them with. What is the strategy to fix this problem; a problem the market has only one answer for to date, which is to keep importing and hope for the best.

There is bipartisan support for pharmaceutical safety and building a reliable supply chain. Both parties want to make it more attractive to produce generic drugs in the United States. They know price dynamics – coupled with state support for pharmaceutical companies in India and China, for example – put local manufacturers on thin margins. One poor business decision, a bad inspection, or a decision made by a foreign competitor can put U.S. labs out of business. The pharmaceutical industry investments we have been hearing about are for labs making branded drugs, like the wildly popular injectable GLP-1 medications used for diabetes and weight loss.

Generic drugs are not yet part of that investment story, however U.S. companies are rapidly searching for ways to reduce reliance on foreign suppliers like China and India for nearly 70-80% of our essential medicines. This should be seen as a transformative step forward in reshoring critical generic drug manufacturing to the United States, and as a milestone for bolstering U.S. manufacturing, and protecting our national security.

The Trump India Deal and the Likelihood of Pharma Tariffs

President Trump’s recent India trade agreement means tariffs fall to 18% from 25%, with agreements by India to purchase more crude oil from the U.S. and possibly Venezuela instead of Russia. The Indian financial press also said India would lower tariffs on some goods to zero, including some agriculture (India already agreed to this during the Biden years). None of the actions include trade-offs for continued U.S. pharmaceutical market access, which up to now remain exempt from tariffs worldwide anyway, India included.

The pharma exemption is likely for two reasons: first, concerns over drug pricing, and recalls of imported drugs leading to drug shortages, a legitimate FDA concern. And second, the Trump administration is conducting a Section 232 investigation into pharmaceuticals. We do not yet have any guidance as to where this is heading. It is currently unclear whether pharmaceuticals or any other Section 232 goods were part of any new trade arrangement.

One way to protect and expand domestic investment would be implementing a Tariff Rate Quota (TRQ) on generics. This would protect U.S. labs by limiting their import competition, helping to build out a more reliable domestic supply chain, providing the financing and growth math add up for corporate investors and lenders.

On the cost side, there is the PILLS Act, basically a CHIPS Act for generic drugs that supports domestic pharmaceutical production through targeted tax credits and investment incentives. Sen. Tom Cotton (R-AK) introduced the Senate version of Rep. Claudia Tenney’s (R-NY-14) original House bill in May 2025.

Industry experts that have testified in House and Senate hearings on this topic also mention government purchasing programs and regulation costs.

Andrew Rechenberg, CPA economist, proposed a TRQ in a report published last July, and again during his testimony before the Senate Special Committee on Aging in October.

TRQs for generics would:

Guarantee supply reliability in the short term by preserving import flow from trusted countries.
Rebuild U.S. capacity over the long term through market protections and regulatory incentives.

As far as pricing goes, tariffs generally do not impact prices and inflation significantly and “pharmaceuticals are uniquely immune from cost pressure due to the medical industry’s costing structure,” said Rechenberg in a separate report in August. Final patient prices are structurally insulated from fluctuating pharmaceutical costs.

Why Recalls On Imports Matter

Recalls are usually dependent on the lab recalling their drug, not the FDA recalling it. We have to rely on these foreign labs to pull drugs off the shelf if they see something wrong. Many of these labs are not inspected the way a U.S. lab is inspected. When recalled drugs are critical medications, or in short supply, drug prices can spike and patient healthcare risk increases.

Drug recalls happen at U.S. labs, too. But recalls do not have equal consequences. Imported-drug recalls can carry systemic risk that domestic recalls often do not. This is especially true when a drug is already in short supply, or on FDA’s essential medicines list. Recalls of critical drugs not found in the U.S. lead to price spikes, and pose massive health risks to patients. There is bipartisan consensus for supply chain resilience. The constant drum beat of India-sourced recalls is an example of a generic drugs supply chain operating on thin ice.

Domestic pharmaceutical companies’ domestic market share went from 83.7% in 2002 to 37.1% by 2024.

Drug shortages hit a record 323 in 2024, with hospitals facing 300–500% price markups as a result.

Up to 83% of shortages involve imported generics with only 40% of U.S. generic drugs having only one FDA-approved manufacturer in the U.S., creating single points of failure. This means that a single disruption can cripple national access to a drug, which we saw in cancer drugs made by Intas Pharmaceuticals in 2023. At the time, the FDA banned the Intas lab that supplied approximately 50% of America’s cisplatin, a key chemotherapy drug, for selling to the U.S. due to faulty drug production.

The dangers of import dependence go beyond recall risk. Imported generics have been linked to lower efficacy and safety failures. A 2025 study by a group of university academics found that Indian-made generics were 54% more likely to cause severe adverse events than their U.S.-made counterparts. They blamed pricing pressure leading to cost-cutting here and there on safety, testing, and oversight.

“From my experience, FDA compliance is difficult enough, so when labs are under pressure to compete on price they can be tempted to overlook relatively small compliance issues and so compliance erodes over time,” said John Gray, the Ohio State University professor who was part of the team that conducted the 2025 study during a Jan. 29 hearing in the Senate Special Committee on Aging. “Research and investigative reporting shows that intense cost pressure can affect product quality,” he said.

Sen. Rick Scott (R-FL) recently called FDA inspections in India “worthless.”

The Trump strategy to reshore important sectors of the economy remains centered on government initiatives like critical minerals stockpiling, lower taxes, lower regulations, and investment in productive sectors. Pharmaceuticals is one of those sectors.

Solutions are out there and the momentum exists, but no one on Capitol Hill or in the White House has closed this sale quite yet.