The U.S. pharmaceutical industry is currently navigating significant uncertainty amid President Trump's proposed tariffs on imported pharmaceuticals. While these tariffs have not yet been implemented, the administration has initiated a Section 232 investigation into pharmaceutical imports, signaling a potential shift in trade policy that could affect drug pricing and availability.

These developments have prompted concerns about supply chain resilience and the sourcing of pharmaceutical components. In this context, Drug Discovery News spoke with Kit Conklin, Senior Vice President of Risk and Compliance at Exiger, to discuss how pharmaceutical companies can proactively address these challenges and build more robust, transparent supply chains.

How are pharmaceutical companies adapting their supply chain strategies in response to tariffs and broader geopolitical risks?

Tariffs and broader geopolitical risks have made pharmaceutical supply chains more complex. We're seeing more inventory buffering, more contingency planning — all aimed at protecting patient access to critical medications.

Supply chain resilience and flexibility are critical. Companies that invested in traceability and supply chain mapping already knew what their potential exposure was to tariffs before the government announced them. This enabled companies to have a significant competitive advantage to preemptively mitigate tariff risk. 

How are you helping pharmaceutical companies manage the uncertainty around sourcing raw materials, particularly from regions like China and India?

What many don’t realize is that sourcing from India often still means relying on China—roughly 80 percent of India’s pharmaceutical ingredients originate from Chinese suppliers. That creates layered vulnerabilities, from tariff exposure to compliance risks under regulations like the Uyghur Forced Labor Prevention Act (UFLPA). At Exiger, we help clients map this hidden exposure and build in redundancy, so a disruption in one country doesn’t cascade through their entire drug pipeline.

How are you helping companies identify and mitigate hidden supply chain risks amid ongoing trade tensions?

You can’t manage what you can’t see. That’s why we help companies gain visibility into their supply chains all the way down to the sub-tier level because that’s where hidden risks often lie. In the context of international trade tensions, this visibility is critical. Knowing whether a key API passes through a region like Xinjiang or involves a Chinese state-owned supplier isn’t just helpful anymore—it’s essential.

What types of risks are you or your clients most concerned about right now—cost fluctuations, availability, regulatory compliance—and how are you helping to mitigate those?

Compliance used to be about paperwork, but now it’s a supply chain survival issue. For example, cost volatility can squeeze margins but a shortage of critical drugs can shut down production entirely and put patient lives at risk. Companies need to treat all of these as no-fail missions and plan accordingly.

How do you see tariffs affecting innovation, particularly for smaller biotech companies or startups?

Our supply chain data shows just how hard it is for American and other Western companies to compete with Chinese manufacturers that benefit from scale, state subsidies, and looser regulations. In that context, tariffs can serve as a forcing mechanism, giving Western firms some breathing room to scale operations and reinvest in R&D. They're not a silver bullet, but they can temporarily rebalance a playing field that's been structurally tilted for decades.

Our mapping consistently reveals that some of the cost advantage in Chinese pharmaceutical manufacturing stems from ethically questionable practices such as forced labor, weak environmental controls, and under-enforced quality standards. Tariffs, in that context, aren't just economic levers, they're moral correctives. They give companies operating under higher ethical and regulatory standards a fairer shot at competing.

What policy changes—if any—would be more effective than tariffs for supporting domestic innovation and manufacturing?

In addition to tariffs, strengthening oversight of foreign manufacturing is crucial to ensuring that imported medicines are safe and effective. Moreover, U.S. regulators and companies must ensure that no component of American medicines is tainted by forced labor. 

Domestically, policymakers should also consider opportunities to reduce overreliance on foreign sources by incentivizing domestic manufacturing of essential medicines. The first step in this process would be to expand tax credits, public-private partnerships, and federal procurement preferences (e.g. via the Defense Production Act) for the production of antibiotics, generics, and other critical drugs on U.S. shores. 

What lessons from the pandemic or other geopolitical events are shaping how you plan for quality control resilience today?

Resilience today means planning for disruption, not reacting to it. Our supply chain mapping shows that essential medications often depend on a single API source, sometimes even a single facility. That’s why more organizations are proactively identifying secondary suppliers and alternative logistics routes before a crisis hits, not after.