A medicine can have strong demand and still become difficult to supply when a critical input is concentrated in too few locations.
US illustrates the exposure. In 2025, only 9% of API manufacturers were in US, compared with 22% in China and 44% in India. More than half of pharmaceuticals distributed in the US are manufactured overseas.
Pharmaceutical availability depends on where APIs and intermediates are sourced, how manufacturing is distributed, how products move through trade and distribution networks, and where the final points of demand are located.
How Nexdigm Maps Pharmaceutical Supply Exposure
Nexdigm evaluates pharmaceutical supply networks from the API stage through finished-dose manufacturing and distribution.
The objective is to identify where supplier concentration, geographic dependency or channel constraints could affect product availability and commercial performance.
The assessment can map:
- API and intermediate sources: suppliers, countries and manufacturing locations
- Manufacturing footprint: formulation, fill-finish and packaging capacity
- Trade flows: import dependence, routes and logistics
- Distribution: wholesalers, distributors, hospitals and pharmacies
- Supply resilience: alternative sources, lead times and switching feasibility
The important distinction is between supplier diversity and actual supply diversity.
Five suppliers may still represent concentrated exposure if they depend on the same country, manufacturing cluster or upstream input.
The Risk Often Starts Before the Drug Is Manufactured
API concentration can create vulnerabilities that are invisible at the finished-product level.
OECD research found that, for many APIs supplied to Europe, more than half were produced by only one to five suppliers.
Its analysis also found substantial geographic concentration for individual products, with some APIs heavily dependent on China or India.
That does not mean geographic concentration automatically creates a shortage. The commercial issue is whether an affected supplier can be replaced quickly enough.
A supply-chain assessment should therefore test:
- – Number of qualified suppliers
- – Country concentration
- – Critical intermediates and raw materials
- – Supplier switching requirements
- – Production and regulatory constraints
This moves the analysis from “Who supplies the API?” to “How replaceable is that supply?”
Manufacturing Capacity Does Not Equal Market Availability
The next vulnerability sits between API sourcing and the pharmacy shelf.
Pharmaceutical production can involve multiple manufacturing sites, quality-release stages, packaging operations and regulatory approvals. A disruption at any one of these points can restrict the finished product even when upstream API supply remains available.
The network is effectively:
Raw materials → API → formulation → quality release → packaging → distribution → pharmacy/hospital
Pharmaceutical supply chains as increasingly internationalized, with global pharmaceutical trade reaching $900 billion in 2022 and intermediate inputs such as APIs accounting for about half of traded pharmaceutical goods by value.
Resilience cannot be assessed by looking at manufacturing capacity alone.
Availability Is Also a Distribution Decision
A medicine can be manufactured reliably and still have uneven market availability.
The final stage depends on wholesalers, distributors, hospital procurement, pharmacies and, in some markets, government purchasing systems.
Channel concentration can become a commercial constraint even when production is secure.
For market-entry or expansion decisions, the assessment should consider:
- Channel coverage:
Which distributors reach the target market? - Institutional access:
How important are tenders and hospital procurement? - Geographic reach:
Can the network serve fragmented or remote demand? - Inventory requirements:
How much stock is needed to maintain availability? - Demand visibility:
How accurately can replenishment requirements be forecast?
Supply resilience must be evaluated all the way to the point of demand.
How Nexdigm Assesses Pharmaceutical Supply Chains
Nexdigm’s pharmaceutical supply chain market analysis can evaluate the network through five dimensions:
- Supply-Base Mapping
Identify API, intermediate, formulation and finished-dose suppliers across relevant products and geographies. - Concentration & Dependency
Measure supplier, country and manufacturing-site concentration to identify critical dependencies and potential single points of failure. - Capacity & Resilience
Evaluate production capacity, lead times, alternative sources, quality considerations and the feasibility of shifting supply. - Trade & Distribution
Map import flows, logistics routes, distributors, wholesalers and institutional channels to understand how products reach the market. - Strategic Prioritization
Rank products, suppliers and markets by supply exposure and commercial importance to determine where diversification, localization or additional capacity may create the greatest value.
This framework helps companies make decisions around sourcing, manufacturing footprint, market entry, partner selection and supply-chain resilience rather than treating logistics as a standalone operational issue.
Nexdigm’s Pharmaceutical Supply Chain Market Assessment
Nexdigm assessed 4 product categories across 5 markets, mapping API suppliers, manufacturing locations, trade flows and distribution channels. The analysis identified 3 high-dependency supply nodes and compared alternative sourcing and distribution models to strengthen availability while maintaining commercial viability.
Pharmaceutical availability is shaped before a medicine reaches the pharmacy. API concentration, manufacturing capacity, quality, trade flows and distribution structures determine how resilient supply can be.
Nexdigm’s pharmaceutical supply chain market analysis helps companies identify these dependencies and make informed sourcing, manufacturing, market-entry and resilience decisions.
To take the next step, simply visit our Request a Consultation page and share your requirements with us.
Harsh Mittal
+91-8422857704
[email protected]