Disruptions from the U.S.and Iran conflict moves across key transit routes and threatens the flow of active ingredients, price spikes, and heightened risk of drug shortages worldwide.
The ongoing military conflict between the U.S. and Iran affected global pharma supply chains,
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At the center of current disruptions are critical transportation chokepoints and regional logistics hubs. The Strait of Hormuz, through which a significant portion of global oil and maritime trade passes, remains a focal point of concern.
Any sustained threat to this corridor introduces delays, higher insurance costs, and rerouting challenges for shipments, including pharmaceutical ingredients and finished products.
In an email exchange with Pharmaceutical Executive, the United States Pharmacopeia (USP) noted,“The Strait of Hormuz is less likely to disrupt pharmaceutical shipments directly, but it remains a critical route for global petroleum transport.”
USP continued, “Petroleum-derived inputs are essential to the production of key starting materials, so rising energy prices could further compress margins. Pricing pressure is already recognized as a major strategic driver of pharmaceutical supply chain risk.”
Air transportation also felt the effects of the conflict. As the closure and reduced operation of major Gulf air hubs has further constrained the movement of high-value, time-sensitive medical goods.
Air freight plays an essential role in transporting biologics, specialty medicines, and temperature-sensitive products. Disruptions in these hubs can cascade quickly, creating bottlenecks that extend far beyond the region.
Major Gulf air hubs in the Gulf Cooperation Council (GCC) region includes locations in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). These serve as critical pharmaceutical transit hubs connecting Africa, Asia, Europe, India, and the United States.
The GCC's growing pharmaceutical industry is worth $23.7 billion, around 80% of which relies on imports through the GCC airspace and the Strait of Hormuz.1
Together, maritime and air transport vulnerabilities are exposing the degree to which pharmaceutical logistics depend on stable passage through a relatively narrow set of routes.
The most immediate impacts of the U.S.- Iran conflict is being observed in the supply of active pharmaceutical ingredients (APIs) and other upstream inputs. Many pharmaceutical companies rely on globally distributed manufacturing networks, with raw materials often crossing multiple borders before final production.
Delays in shipping or increased transit times interrupt production schedules, particularly for generic drug manufacturers operating with thinner margins and less inventory buffer.
Gerren McHam, vice president of external affairs at the API Innovation Center, said to The Hill, “If the instability really persists, you’ll probably see lead times, transportation costs that can impact direct items that we need for our medicines, including the key starting materials into active pharmaceutical ingredients.”
In addition to APIs, the broader supply chain, including excipients, packaging materials, and finished drug distribution, is experiencing strain. Reports indicate that some shipments are being delayed or rerouted, increasing costs and complicating inventory planning.
According to USP, direct manufacturing exposure in the region is limited and accounts for roughly 0.3% of API production and 0.6% of oral solid dose production, with activity concentrated primarily in Israel and Jordan.
In a document from USP emailed to Pharmaceutical Executive, USP notes that several products have notable dependence despite the small regional manufacturing footprint, including:
Attention increasingly turns to the potential expansion of disruptions beyond the closure of the Strait of Hormuz. As of April 7, 2026, Iranian officials have raised the possibility of targeting or influencing traffic through the Bab al-Mandeb Strait, a critical waterway linking the Red Sea to the Gulf of Aden.2
Closure or sustained instability in this corridor could potentially complicate global shipping routes, particularly those connecting Asia, Europe, and the Middle East.
Such a scenario could significantly increase transit times, force rerouting around the Cape of Good Hope, and drive-up freight costs. For the pharmaceutical sector, this would add another layer of complexity to already strained logistics networks.
“The Red Sea is a more significant source of risk, as it sits along the same trade corridors that India uses to ship large volumes of active pharmaceutical ingredients and finished dosage forms to the United States and Europe. Even modest increases in transit times can trigger shortages for products already operating with thin inventory margins,” says USP.
Beyond transportation, escalation could also influence pricing dynamics. Higher shipping costs, increased insurance premiums, and supply delays may ultimately be reflected in drug prices, particularly in markets heavily reliant on imported medicines.
“Overall, expect upward pressure on "top of the supply chain" ingredients. Key Starting Materials (KSMs) typically are petrochemicals, which could be affected by higher oil prices or disrupted trade markets,” USP said.
The uncertainty surrounding the conflict and its potential outcomes is leading to ongoing discussions around reshoring or nearshoring pharmaceutical manufacturing.
In recent years, policymakers and industry leaders emphasized the need to reduce reliance on geographically concentrated supply chains, particularly for critical medicines and APIs.3
In the United States, renewed investments in domestic production capacity, as well as incentives aimed at diversifying supply sources have continued under President Trump’s second term, with the introduction of
The global pharma supply chain is awaiting its next steps as attention turns to President Trump’s imposed deadline for Iran to reopen the Strait of Hormuz on April 7, 2026, by 8 PM ET.
In a post on Truth Social, President Trump threatened that “a whole civilization will die” if Iran does not strike a deal to reopen the strait by the deadline.3 In the same post President Trump says, “I don’t want that to happen,” and continues to mention that “something revolutionarily wonderful can happen.”
According to a report from CBS News, a diplomatic push to negotiate a deal between the two sides is ongoing, with President Trump telling reporters that Iran has made a “significant” proposal, and calls Iran an “active, willing participant” in negotiations.4
While the trajectory of the conflict remains uncertain, its impact on pharmaceutical supply chains is already becoming evident. The combination of disrupted transit routes, constrained logistics capacity, and underlying structural vulnerabilities is creating a complex risk environment for the industry.
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