The argument for onshoring pharmaceutical manufacturing too often rests on the illusion that moving manufacturing to the United States would meaningfully insulate the drug supply from foreign shocks. But the current conflict in Iran has quickly reminded the world that – for all the protectionism and rejiggering of trade flows – the global economy remains deeply integrated. This has been most acutely felt in the energy market but also has begun to affect the seemingly unrelated pharmaceutical market.

India is one of the world’s most important producers of generic drugs, supplying medicines to patients across the United States and Europe and serving as a core node in the global pharmaceutical market. Unfortunately, key starting materials and active pharmaceutical ingredient (API) precursors now face sourcing and transport disruption to Indian manufacturing hubs, potentially impacting future generic drug supply.

This demonstrates that onshoring is not a panacea for supply shocks: Pharmaceutical manufacturing is a layered industrial process that depends on globally sourced petrochemicals, precursors, solvents, intermediates, inactive ingredients, plastics, packaging materials, and shipping networks. When conflict disrupts critical upstream inputs, the location of the factory where the final pill is pressed or the vial is filled matters far less than restoring a stable flow of materials.

Many of the inputs that support medicine production sit downstream from the energy industrial chain now under stress. Solvents, reagents, intermediates, polymers, and packaging components all depend on hydrocarbon and petrochemical systems. Even when an API is not directly sourced from the Middle East, the manufacturing ecosystem behind it can still be hit by shortages, price spikes, transport delays, or reduced refining and chemical output elsewhere in Asia. An upstream shock can move through the supply chain long before it appears to be an official drug shortage.

This is especially important in generic drugs, where margins are already thin and supply chains are optimized for cost rather than resilience. A moderate increase in the price of a key solvent, a longer shipping route, or tighter availability of an input used in formulation or packaging can destabilize a market already operating with little slack. Generic supply chains do not need to collapse to create problems. They only need enough friction – enough delay, enough added cost, enough uncertainty – to make already fragile economics even less sustainable.

That reality should cool the more triumphalist claims surrounding onshoring. Domestic manufacturing is too often treated as a synonym for supply chain security. It is not. At best, onshoring one stage of production addresses one stage of vulnerability. A pill pressed in Ohio is not secure merely because it is pressed in Ohio. It may still depend on imported chemical precursors, globally sourced inactive ingredients, foreign-made equipment parts, plastic resins derived from internationally traded petrochemicals, or packaging materials tied to the same global input markets now being disrupted. Even a U.S.-based API facility can remain exposed if the feedstocks and process chemicals it uses come from abroad.

A serious resilience strategy would begin with a less comforting premise: Pharmaceutical security is about networks, not national lines on a map. It requires diversified sourcing of key materials, greater redundancy across allied suppliers, strategic inventories for critical inputs, better visibility into upstream dependencies, and tax and investment policies that incentivize and enable manufacturing footprints in the United States. It also requires acknowledging that pharmaceutical manufacturing is part of a broader industrial base. The deeper lesson we should glean is that medicine supply depends on industrial inputs sourced through a global system that remains vulnerable to conflict and disruption.

Drug plants do not run on patriotic intent. They run on chemicals, energy, components, and logistics. Unless those problems are accounted for, onshoring can easily become an expensive gesture that leaves the core vulnerability intact.