On August 13, 2025, President Trump signed an executive order aimed at strengthening America’s pharmaceutical supply chains. Officially titled “Ensuring American Pharmaceutical Supply Chain Resilience by Filling the Strategic Active Pharmaceutical Ingredients Reserve,” the measure revives directives from a similar order in his first administration. Both executive orders aim to, among other things, build up domestic stockpiles of active pharmaceutical ingredients (APIs), which are the biologically active components that are assembled with other components to prepare the final drug product.
The API Executive Order
The API executive order notes that while nearly two in five prescription finished drug products are manufactured in their final form in the United States, only about 10% of APIs are manufactured domestically. APIs generally have lower costs and longer shelf lives compared with the final finished product. President Trump sought to create a Strategic Active Pharmaceutical Ingredients Reserve (SAPIR) stockpile during the COVID-19 pandemic to encourage domestic production and procurement. The initiative was allegedly not advanced during the intervening Biden administration, leading to depletion of the API stockpile, and the API executive order aims to address this deficiency. In 2022, agencies identified a list of 86 essential medicines for placement in the SAPIR.
The executive order directs the assistant secretary for preparedness and response (ASPR) within the Department of Health and Human Services to compile within 30 days an initial list of 26 drugs essential for public health, take an accounting of existing funds available to operate the SAPIR, and obtain and maintain a six-month supply of APIs for these drugs. Within 120 days, subject to the availability of funds, the ASPR is directed to take all measures to ready the existing SAPIR repository to maintain the API stockpiles. Consistent with earlier executive orders supporting the growth of the domestic industry, the API executive order directs the ASPR to give preference to domestically manufactured APIs.
Further, within 90 days of this executive order, the ASPR must provide an updated version of the list of 86 essential medicines and medical countermeasures, along with a plan to obtain from domestic manufacturers the APIs for essential drugs not already on the initial list of 26 and maintain a six-month supply of all APIs on the list. The ASPR is also directed to provide a proposal and cost estimate for opening a second SAPIR repository.
Takeaways
The ambitious goals outlined in the API executive order are consistent with earlier executive orders seeking to build domestic pharmaceutical capacity and industry. However, the broad goals outlined in the API executive order leave questions unanswered. For example:
- While an API stockpile could potentially address the availability of the key therapeutic ingredient, the raw API cannot be administered to a patient. The API must be formulated into the final FDA-approved formulation before it may be administered to patients in the dosages approved by the FDA, and the efficacy and safety of such dosages were developed following extensive clinical trials. Manufacturers producing final formulations would typically have an NDA or ANDA on file with the FDA identifying the source of the API for their product, the source of the various excipients that must be present in the finished formulation, and the manufacturing facilities where the API and the finished product are to be prepared. Thus, stockpiling the API from various sources would require identification of all the other players in the supply chain necessary to successfully create the finished product in the event of an emergency.
- It is possible that some of the API or finished products may be protected by patents, trademarks, and other intellectual property rights, including rights held by foreign manufacturers. The executive order is silent on whether the stockpiling will be accompanied by licensing or other agreements with intellectual property rights holders to ensure that the U.S. government can stockpile and use the API and finished products to treat patients in a manner approved by the FDA.
- The executive order is also silent on the pricing of the API to be acquired for the SAPIR and whether participation will be mandatory or individually negotiated. The administration has urged pharmaceutical manufacturers to offer most-favored-nation pricing (MFN) for finished products to U.S. consumers and has sought to obtain voluntary compliance through a combination of incentives and public pressure. Thus far, manufacturers appear to have resisted calls for MFN pricing, despite the public campaign from the White House. The API executive order is silent on whether such pricing obligations will be imposed on API suppliers or whether participation will be mandatory if there is only a single manufacturer of the API or product.
