Made in China. Injected in the USA.

If you read last week’s newsletter, you already know where I stand in the compounded GLP-1 wars. I used that piece to give you a look behind the curtain into the loopholes and lack of regulation fueling the billion-dollar gray market of telehealth and compounds.

This week, the story got even bigger.

On Monday morning, Novo Nordisk announced it was officially ending its (very short-lived) partnership with Hims, accusing the company of illegally compounding semaglutide, misleading patients, and basically doing everything I wrote about last week. To be clear: these were things Novo Nordisk already knew about when they agreed to sell lower-cost, brand-name Wegovy vials through the Hims platform. So what happened to make them reverse course so soon?

When the deal was first announced, I assumed it required Hims to stop selling the compounded knockoffs. I figured that was the whole point. But last week, while writing my piece, I noticed their website still listed the compounds as an option.

Monday’s press release made it clear the deal didn’t include that contingency. Maybe there was a handshake assumption that Hims would gradually shift patients over to the branded vials - but whatever the plan was, Novo clearly wasn’t happy with how it was playing out. Now, the future of medical innovation will be decided in court over the next few years in a Pharma vs. VC proxy battle.

America!

I’m not going to waste your time rehashing last week’s arguments. But buried in Monday’s press release was a detail I didn’t get to mention - one that opens up a whole new conversation…

Novo Nordisk said Hims is sourcing their semaglutide from facilities in China that have not been inspected by the FDA.

Well, I’ve got news for you: so is most of the pharmaceutical industry.

The Hims situation is a problem. But we don’t have time for that today. Instead, I want to zoom out.

Because whether you’re getting compounded Ozempic or a fully FDA-approved brand-name drug from your local pharmacy, there’s a near-guarantee it came from overseas.

And that’s a ticking time bomb.

API stands for Active Pharmaceutical Ingredient. It’s the core molecule in any medication - the chemical that actually does something.

Everything else in your pill or injection is just delivery, filler, or packaging. The API is the engine.

A simple analogy: think of a glass of wine. Alcohol might only make up 12% of the liquid, but it’s doing all the work. That’s your API.

Here’s what most people don’t realize:

Up to 90% of the APIs used in US medications are made outside the country - mostly in China and India. [Brookings]

This isn’t just true for GLP-1s. It applies to antibiotics, heart medications, chemotherapy, anesthesia, ADHD meds - you name it. Even many FDA-approved brand-name drugs rely on foreign APIs. The pictures below show the first two bottles I saw on the shelf in my pharmacy five minutes ago…

We don’t talk about this much. But we should. Because our entire healthcare system is built on a supply chain we barely understand and don’t control.

This isn’t a mystery.

Over the past 30 years, pharmaceutical companies steadily outsourced API manufacturing to overseas facilities to cut costs and stay competitive. Labor is cheaper. Environmental regulations are looser. And the margins (especially on generics) are so thin that every penny counts.

From a recent story in the Wall Street Journal:

Let that sink in. Amoxicillin is cheaper than candy. Of course companies stopped making it here. It’s the only way to make any money.

Once the outsourcing began, it became the norm. Today, even new drug manufacturers rarely build US-based API plants. Why would they? It’s too expensive, too slow, and too politically volatile to justify the investment.

Most people assume that if a drug is FDA-approved, the entire supply chain is tightly regulated and frequently inspected. I’d argue public trust in our entire healthcare system is based on this assumption.

Sorry to burst your bubble, but that’s not the case. Especially when the drug is made abroad.

In 2022, the FDA inspected just 6% of the foreign drug manufacturing sites supplying the United States.

Some inspections were announced in advance. Some were done remotely. Many didn’t happen at all.

Technically, these plants are required to abide by FDA standards for good manufacturing practices. But the FDA simply doesn’t have the resources to watch over all of this as stringently as we would expect from the government agency responsible for our safety. In reality, they rely on voluntary compliance and good intentions when nobody is looking, especially from facilities in countries where transparency is... not the norm. Oversight unfortunately has been forced to become reactive, rather than proactive.

However, that doesn’t mean everything made in China or India is dangerous. Most meds are probably high quality and plenty of drug manufacturers are on their game.

But it does mean we’re flying blind. And when something goes wrong - a contamination event, a supply disruption, a geopolitical incident - we have no backup plan.

This isn’t just a quiet crisis in pharma circles. It’s become a political talking point.

President Trump recently proposed imposing tariffs on Chinese-made pharmaceuticals as part of a broader “Make Medicine in America Again” push.

In theory, that sounds great.

In reality? It’s a fantasy.

Reshoring drug manufacturing would require:

We have none of those things.

And no company is going to break ground on a new facility in Ohio based on a campaign soundbite from a president who might reverse course on Twitter next week.

If we force companies to move production stateside without fixing the economics, many will simply stop making drugs.

I say it every week - healthcare is a business. It does not matter how many people rely on a specific drug to survive. If a company can’t turn a profit selling it, they won’t produce it. Big Pharma doesn’t do charity.

We don’t just rely on foreign countries for cheap drugs. We rely on them for all drugs.

We have no domestic capacity to produce essential medications at scale if global supply chains break down.

If a major API plant in China or India went offline (...or if US-China tensions escalated into a trade war…) our shelves would go bare in weeks.

That’s not theoretical. That’s where we’re headed.

We’re not just vulnerable to contamination. We’re vulnerable to pandemics, floods, blackouts, factory fires, and diplomatic breakdowns in countries many Americans have never heard of.

And when the stakes are cancer treatment, insulin, or heart failure? We can’t afford to be that fragile.

There’s no silver bullet or quick fix. But there are three areas that I believe are crucial to get the ball rolling:

The Novo-Hims breakup started as a story about compounded GLP-1s.

But it exposed something much bigger:

Most Americans have no idea where their medication comes from. And in today’s global system, that ignorance is dangerous.

We can’t keep treating supply chain opacity as a cost-saving feature. It’s a liability. And if we don’t confront it now, the next shortage won’t be a temporary glitch.

It’ll be the new normal.

Stay sharp.

Alec Wade Ginsberg, PharmD, RPh
4th-Gen Pharmacist | Owner & COO, C.O. Bigelow
Founder, Drugstore Cowboy