How Exposed is The U.S. Pharmaceutical Supply Chain to China’s Updated Export Control Regulations?

Gerren McHam, vice president of Government and External Affairs, API Innovation Center, describes how China’s recent export control updates may introduce new vulnerabilities for the U.S. pharmaceutical supply chain. He frames the discussion around two new regulations that together create mechanisms for Beijing to investigate perceived threats to its industrial base and to retaliate when foreign entities adhere to U.S., U.K., or E.U. rules that China views as harmful to its own economic and industrial interests.

McHam explains that activities U.S. companies might consider as routine trade compliance or their procurement decisions could be interpreted by China as interference with its industrial supply base. In practice, he notes, this opens the door to a range of potential retaliatory measures, which may include licensing delays, restrictions on companies’ operations in China, tighter import and export controls, and broader supply pressures that could ultimately affect access to key ingredients and materials used in pharmaceutical production.

He underscores that, despite the significance of these developments, the issue is not yet receiving wide attention in the industry. As companies begin to navigate how to comply with overlapping regulatory regimes from different countries, McHam stresses the need for robust internal governance structures. Specifically, he recommends clear escalation protocols so that no decision is made in isolation, and the broader strategic implications of trade and compliance choices are fully understood across the organization.