What the USMCA Joint Review Means for Pharma

The first formal joint review of the US-Mexico-Canada Agreement begins on July 1st, and while most of the political debate has focused on the automobile industry and labor, the pharmaceutical industry has its own stake in the outcome.

For pharma, the concern isn't just tariff exposure, it's that the industry has little ability to quickly pivot if major regulatory changes are made. The agreement represents a key opportunity to address North American pharmaceutical supply chain vulnerabilities that were exposed during the COVID-19 pandemic.¹ And, ahead of the review, companies that begin assessing their exposure now will be better positioned to adapt regardless of which way negotiations go.²

In a special episode of Pharma Pulse, Rohit Tripathi, vice president of Industry, CPG and manufacturing at RELEX Solutions, frames it clearly: The real issue, he argues, isn't the USMCA review in isolation — it's the collision of trade policy shifts, origin rules, energy disruption, and chemical input inflation hitting supply chains all at once.

What makes pharma uniquely vulnerable is the difficulty of course-correcting. "Switching suppliers is not that easy," Tripathi notes. "It requires validation, quality reviews, regulatory filings." That regulatory drag means companies can't react quickly to changes in trade policy the way other industries might.

The smarter move, Tripathi says, is segmentation — not blanket inventory builds. Leading companies are classifying products by patient criticality, margin, shelf life, demand volatility, and substitution risk to determine where safety stock makes sense and where it simply ties up capital or runs into expiration constraints. Some products warrant dual sourcing, while others need earlier demand signals and tighter supply collaboration.

The urgency for scenario planning, Tripathi says, stems from the compounding nature of current disruptions. The USMCA review doesn't exist in isolation, it sits alongside volatility in the Strait of Hormuz, which affects energy, freight, insurance, and petrochemical prices, all of which flow directly into the cost of active pharmaceutical ingredients, solvents, coatings, and packaging. "In isolation, all of these may be manageable," he says. "But all together, they break assumptions in the planning model."

For teams that haven't yet begun their assessment, Tripathi's starting point is a product-level risk map: identify critical SKUs, single-sourced APIs, high-risk packaging dependencies, cross-border flows, and petrochemical exposure. From there, build out scenarios. AI-assisted planning tools have made that process significantly faster, he notes, but the strategic judgment about which risks to prioritize still has to come from the organization.

The broader takeaway is that the July 1st date, while significant, is less a trigger than a signal, one that reflects a fundamentally more volatile operating environment. The winners, Tripathi says, will be companies that can model risk across cost, lead time, compliance, and availability simultaneously — not those waiting to react.

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References

1. Padula, William. "Leveraging the USMCA to Strengthen Pharmaceutical Manufacturing and Supply Chains in North America." Brookings Institution, March 4, 2026. https://www.brookings.edu/articles/leveraging-the-usmca-to-strengthen-pharmaceutical-manufacturing-and-supply-chains-in-north-america/
2. Harden, Blake, and Evan Giesemann. "How Companies Can Prepare for the USMCA Review." Ernst & Young, Dec. 3, 2025. https://www.ey.com/en_us/insights/tax/how-companies-can-prepare-for-the-usmca-review