Courtesy of World Trade Magazine, I recently came across this little blog number that investigates a recent Senate bill, the Transparency in Drug Labeling Act, that would mandate "country-of-origin labeling for pharmaceutical ingredients." This act "would require country-of-origin labeling not only for APIs, but also for inactive ingredients and would apply to prescription and over-the-counter drug products." Even those outside of the pharmaceutical market should pay close attention to the progress of this bill, as it could signal future legislation around consumer and food products.
But pharma companies, especially, should use it to weigh the potential consumer backlash from global active pharmaceutical ingredient (API) sourcing. In recent years, many large pharma companies have been drawn to China and India for APIs thanks to the significant savings involved (in many cases 50% or more, even factoring in the decline of the dollar). But with this sourcing comes risk -- as recent antibiotics and blood thinner supplier scandals have shown.
According to the blog post, the new regulation, if it becomes law, could prove challenging for pharma companies as "the country of origin for an API is not restricted to a single manufacturing location. For example, raw materials, intermediates or select steps of a multistep synthesis may be sourced from or outsourced to various productions sites offshore, with the final steps of an API synthesis performed captively by a pharmaceutical manufacturer located in the US or Western Europe."
- Jason Busch