Working Paper: NBER ID: w26524
Authors: Neriman Beste Kaygisiz; Yashna Shivdasani; Rena M. Conti; Ernst R. Berndt
Abstract: Prescription pharmaceuticals are frequently used consumer products, whose manufacturing location is commonly held as a trade secret by firms and U.S. regulatory agencies. Here we use previously non-publicly available data to describe levels and trends in the manufacturing locations of the most commonly used prescription pharmaceuticals, off-patent generic drugs, intended to be consumed by Americans. We find that the base ingredients required for the manufacturing of these prescription drugs are overwhelmingly and increasingly manufactured in non-domestic locations, specifically India and China. The manufacturing of finished prescription drugs for the American market is equally split between domestic and foreign locations, but is increasingly foreign as well. The growing American reliance on non-domestic manufacturing of prescription drugs is important for stakeholders to appreciate given current quality and pricing concerns involving these products and their potential susceptibility to interruptions in supply. We discuss implications of these levels and trends for current domestic and international policy discussions.
Keywords: No keywords provided
JEL Codes: F61; I18; K23; L51; L65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| reliance on nondomestic manufacturing (L69) | implications for drug quality (L15) |
| reliance on nondomestic manufacturing (L69) | concerns over supply interruptions (L94) |
| growing American reliance on nondomestic manufacturing (F69) | regulatory challenges (L51) |
| increased reliance on foreign manufacturing (F69) | concerns about drug quality (L65) |
| increased reliance on foreign manufacturing (F69) | potential supply interruptions (L94) |
| manufacturing geography (L69) | drug quality concerns (L15) |