Is Your API Supply Chain at Risk? Why A Second Supplier is Now a Must-Have

Global pharma companies are rethinking API sourcing strategies to safeguard against supply chain disruptions – and turning to experienced partners for alternate sourcing solutions.

Active Pharmaceutical Ingredients (APIs) have become the pharmaceutical industry’s crucial lifeline, and a growing vulnerability. In today’s interconnected world, the majority of essential drug ingredients are sourced from just a handful of regions, with China and India alone supplying nearly 80% of APIs for key global markets. This heavy reliance on limited sources leaves pharmaceutical companies increasingly exposed to supply disruptions. 

 

Recent years have severely tested these fragile supply chains: from pandemic lockdowns that shut down major manufacturing hubs, to geopolitical tensions and export controls such as India’s temporary ban on 26 critical APIs in 2020. The impact has been significant. Drug shortage levels have surged to decade highs, the United States recorded 309 active drug shortages by mid‑2023, the highest figure in nearly ten years, with similar patterns observed across other markets worldwide. In response, industry groups and regulatory bodies have issued a clear and urgent message: pharmaceutical manufacturers must strengthen supply chain resilience by establishing alternate sources for critical APIs.

 

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Dual sourcing of APIs, partnering with a second qualified supplier is rapidly becoming a standard risk‑mitigation strategy across the pharmaceutical industry. By qualifying a backup API manufacturer, drug makers can reduce single‑point‑of‑failure risk and protect production continuity if a regional disruption, quality issue, or manufacturing shutdown affects one supplier.

 

Regulators increasingly encourage companies to implement multi‑sourcing risk‑management plans. In both Europe and the United States, regulatory guidelines, industry task forces, and shortage‑prevention initiatives have highlighted alternate supplier strategies as essential tools to reduce supply interruptions. As a result, leading pharmaceutical companies are actively diversifying their API sourcing, splitting volumes across suppliers and geographies or adopting “China+1” sourcing models. The conclusion is increasingly clear: reliance on a single API source is an avoidable and growing liability.

If dual sourcing is the “insurance policy” for the pharmaceutical supply chain, DKSH Performance Materials – Pharma, together with Refarmed (a DKSH company), provides the expertise required to implement it effectively. 

 

With over 40 years of experience in global API sourcing, DKSH has built one of the industry’s most robust and actively managed supplier networks, covering both established and emerging API manufacturers. Operating through 17 sourcing offices across 33 markets, DKSH connects pharmaceutical companies to multiple qualified API producers, helping ensure that if one source is disrupted, an alternative is already qualified and ready to supply.

Through DKSH’s established presence across Asia‑Pacific, Europe, and the Americas, our teams maintain on‑the‑ground relationships with hundreds of API manufacturers. This local engagement provides up‑to‑date intelligence on supplier quality, capacity, and operational reliability, enabling DKSH to efficiently match pharmaceutical companies with suitable secondary API suppliers tailored to their technical and regulatory requirements.

 

DKSH Performance Materials pharmaceutical teams, including Refarmed, bring deep expertise in supplier vetting and auditing, supported by more than 100 dedicated regulatory specialists. We prioritise GMP compliance and quality oversight at every stage, supporting pharmaceutical companies in navigating the regulatory complexity of multi‑sourcing. This rigorous approach helps ensure that both primary and secondary API sources meet stringent global standards a critical factor, as quality‑related issues remain a leading cause of API‑driven supply disruptions. 

 

DKSH’s pharmaceutical specialists and Refarmed’s legacy capabilities bring decades of experience across regulated markets. Acting as consultative partners rather than transactional distributors, we support customers with insights on market dynamics, regulatory developments, and supply‑chain optimisation. DKSH has supported pharmaceutical companies worldwide from Japan to Europe and beyond, in implementing dual‑sourcing strategies and executing smooth transitions to alternate API suppliers when required. 

 

Supported by a highly curated global supplier database and ongoing market intelligence, DKSH takes a proactive approach to API sourcing. By anticipating procurement challenges and identifying viable alternative sources ahead of disruption, DKSH helps customers shift from reactive crisis management to structured, forward‑looking supply‑risk mitigation. 

 

Pharmaceutical procurement, CMC, and R&D leaders worldwide are increasingly adopting second‑supplier strategies to safeguard their development pipelines and commercial supply. Building redundancy into API sourcing not only strengthens supply continuity, but also improves negotiating leverage and encourages healthy competition among suppliers. 

 

If API supply resilience is a priority for your organisation, now is the time to act. At DKSH Performance Materials, our mission is to strengthen pharmaceutical supply chains and ensure you can count on DKSH as your trusted second API supplier.

 

 

1. Why is dual sourcing of APIs becoming more important? 
: Global API production is highly concentrated, making supply chains vulnerable to disruptions caused by geopolitical events, regulatory actions, quality failures, or natural disasters. Dual sourcing reduces dependency on a single supplier and improves supply resilience. 

2. Is dual sourcing required by regulators? 
: Dual sourcing is not universally mandatory, but regulators increasingly encourage multi‑sourcing strategies, particularly for critical or shortage‑prone medicines — as part of broader risk‑management and shortage‑prevention efforts. 

3. How long does it take to qualify a second API supplier? 
: Timelines vary depending on molecule complexity, regulatory requirements, and data availability. Qualification typically involves technical due diligence, GMP audits, analytical comparability, and regulatory documentation, making early planning essential. 

4. Can a secondary API supplier remain inactive until needed? 
: Yes. Many pharmaceutical companies qualify a secondary supplier as a “standby” source. However, full qualification and regulatory readiness must be completed in advance to allow rapid activation during a disruption.

5. What role can a sourcing partner like DKSH play? 
: A sourcing partner can provide access to qualified suppliers, manage audits and regulatory coordination, and offer market intelligence that supports proactive risk mitigation,  helping companies implement dual‑sourcing strategies efficiently and compliantly.