Gerren McHam on the Future of US Pharma Reshoring

In the final part of his interview with Pharmaceutical Commerce, Gerren McHam, vice president of government and external affairs at the API Innovation Center, addresses what a realistically reshored US pharmaceutical supply chain looks like in five to ten years, and what it will take to get there. His answer starts with a constraint: reshoring every medicine, every API, every key starting material is not economically realistic. The goal, he says, has to be resiliency, targeting the most critical and most fragile medicines, building redundancy into the supply base, and establishing transparency across the full sourcing chain.

The economics help explain why selectivity is unavoidable. Generics account for approximately 90% of US prescriptions but only 13.1% of total drug spending, a cost structure that has made generic manufacturers highly reliant on cost-competitive Chinese API production and significantly lower manufacturing costs in India.¹ Brookings researchers have estimated that up to one-quarter of US generic drugs contain APIs fully or primarily sourced from a single foreign country of origin, a concentration that makes targeted intervention, rather than broad reshoring, the more practical near-term strategy.² Additionally, a 2025 CSIS analysis found that despite years of policy activity, tariffs and executive orders alone cannot overcome the regulatory complexity, commercial disincentives, and workforce shortfalls constraining domestic pharmaceutical manufacturing.¹

Closing those gaps, McHam says, requires rethinking how the supply chain is structured. Rather than the segmented approach that exists today, he envisions a horizontal model in which key starting materials, APIs, and finished drug manufacturing operate in coordination, supported by investments in advanced technologies including continuous flow chemistry, improved process analytics, and flexible production platforms. But the architecture, he says, is only as durable as its commercial foundation. Reshoring has to be commercially sustainable, and that means long-term federal purchasing commitments, clear private sector demand signals, and policy mechanisms that reward resiliency and quality, not just the lowest price. The federal government, McHam notes, is already making investments and demonstrating focus on domestic pharmaceutical manufacturing. What is needed now is execution.

Access the previous parts of McHam's interview with PC:

1. How China Turned US Trade Compliance Into a Supply Chain Risk
2. Gerren McHam: What Effective Pharma Reshoring Actually Requires

References

1. Wessner, Charles, and Sujai Shivakumar. “Rebuilding Resilience in U.S. Pharmaceutical Manufacturing.” Center for Strategic and International Studies, Sept. 29, 2025. https://www.csis.org/analysis/rebuilding-resilience-us-pharmaceutical-manufacturing
2. Wosińska, Marta E. “What Policymakers Need to Know About China’s Role in US Drug Supply Chains and What to Do About It.” Brookings Institution, Sept. 16, 2025. https://www.brookings.edu/articles/what-policymakers-need-to-know-about-chinas-role-in-the-us-drug-supply-chains-and-what-to-do-about-it/