Studies reveal 90 percent of drugs consumed by Americans are generics. However before these drugs arrive in form of a pill, they start as active pharmaceutical ingredients (APIs).
China is alleged to dominate the market on the global scale, although India is predominantly a large manufacturer of the finished products along with China. Indian companies are known to receive 80 percent of the ingredients from China.
Furthermore, sources suggest, single accounting of the active ingredients in the US drugs manufactured in China is augmenting, in addition to being significant. According to reports published by the Food and Drug Administration, close to 80 percent of active ingredient manufacturers are situated outside the United States. In addition, China is the only supplier for few of the key drugs. For instance, China produces the main ingredient present in every antibiotic and medicine of blood pressure, in addition to being the main component of hundreds of other drugs.
As a result, China also has a virtual monopoly with regards to ingredients necessary for manufacturing critical medicines.
With the ongoing tensions between the Trump government with China, any further decline could lead the Chinese government to look for ‘pressure points’, where it could cause outside leverage or even force a change in the US policy.
China could manipulate prices or even curb on the supply, thus causing prices of pharmaceuticals to rise. Another possibility is of shortage.