Gerren McHam: What Effective Pharma Reshoring Actually Requires

China's April 2026 Regulations on Industrial and Supply Chain Security, along with companion counter-extraterritoriality rules, put US drug companies in direct conflict with the laws they are required to follow: routine compliance actions under American law, from auditing a Chinese supplier to conducting forced labor due diligence under the US Uyghur Forced Labor Prevention Act, can now trigger Chinese investigations and placement on a "malicious entity" list.¹ That dynamic has added urgency to the domestic reshoring push. But as Gerren McHam, vice president of government and external affairs at the API Innovation Center, discusses in the second part of his interview with Pharmaceutical Commerce, investment scale is only part of the answer. The harder question is whether the industry is building capacity in the right places.

As McHam notes, much of the reshoring narrative has been captured by branded products and high-profile GLP-1s, while the generic medicines that hospitals and emergency providers depend on daily remain exposed. The economics help explain why: generics account for roughly 90% of US prescriptions but only 13.1% of total drug spending, a margin structure that leaves manufacturers with little room to invest in domestic capacity.² The result is a stark gap, as the US remains highly reliant on foreign manufacturing for medicines like albuterol and metoprolol, staples of respiratory and cardiovascular care, McHam notes.

The deeper vulnerability, McHam says, sits even further upstream. Brookings researchers have estimated that up to one-quarter of US generic drugs contain APIs fully or primarily sourced from China.³ Closing that gap, he says, requires going further upstream than most domestic investment currently reaches, to the key starting materials where China's leverage is greatest. He outlines two approaches for doing so: modernizing and repurposing existing FDA-regulated manufacturing infrastructure and scaling consortium models that develop new synthesis routes and pull them through to finished-dose manufacturing with committed customers. Both, he says, will demand government and private sector commitment and a sharper focus on the therapeutic categories where a supply disruption would carry the most significant patient care consequences — such as cardiovascular drugs, respiratory agents, antimicrobials, oncolytics, and the injectables used in acute care settings.

Access the first part of McHam’s interview with PC:

1. How China Turned US Trade Compliance Into a Supply Chain Risk

References

1. De, Rajesh, Adam S. Hickey, Thea Kendler, Gabriela Kennedy, Grace Shie, Joanna K.C. Wong, Jing Zhang, Hadassah G. Diament, Timothy J. Keeler, Tamer A. Soliman, and Roslie Liu. "China Expands Its Playbook: New Industrial Supply Chain and Counter-Extraterritoriality Regulations Create Direct Compliance Conflicts for Multinationals." Mayer Brown, May 5, 2026. https://www.mayerbrown.com/en/insights/publications/2026/05/china-expands-its-playbook-new-industrial-supply-chain-and-counter-extraterritoriality-regulations-create-direct-compliance-conflicts-for-multinationals
2. 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
3. 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/