Amid escalating trade tensions and regulatory complexity, pharma manufacturers are facing a growing challenge: how to maintain a stable and resilient supply chain under pressure from steep tariff hikes. In this Q&A, Discover Pharma speaks with founder and CEO of Kodiak Hub, Malin Schmidt, to explore how companies can respond to this shifting environment—without compromising on quality, continuity, or compliance.

From a supply chain resilience perspective, what’s the smartest response for pharma companies facing these sharp tariff hikes?

The smartest response starts by treating tariffs not as one-off shocks, but as a structural reality. We’re living at a time where geopolitical tension, new regulations, and tariff volatility are now the norm. This isn’t just noise, it’s a new baseline pharma companies need to meet.

That begins with understanding where your exposure really is. If a key supplier goes offline or costs spike overnight, can you adapt quickly? Do you have visibility beyond Tier 1? Without that, you’re flying blind—and delays or shortages become inevitable.

The most resilient companies are investing in real-time supplier intelligence. Not just static compliance checks, but ongoing visibility into supplier performance, risk signals, and adaptability.

How exposed is the US pharmaceutical system to supplier concentration in China—and has that risk changed post-pandemic?

The exposure is severe, and it hasn’t improved. If anything, it’s become more entrenched. The US still relies on China for 95% of its ibuprofen, 70% of acetaminophen, and a bulk of its active global API capacity. But it’s not just about sourcing raw materials—it’s about who controls processing and refining. China has locked in those value-add steps, which is where real bottlenecks form.

What’s changed post-pandemic is how frequently trade conditions are shifting. Over 1,200 new global trade barriers have emerged in the last two years. That volatility turns supplier concentration from a risk into a liability. And yet, many companies are still operating under sourcing strategies built for a pre-2020 world. That’s the gap companies need to close fast.

What technologies or strategies are leading pharma firms using to mitigate supplier risk without sacrificing quality or delivery?

The best-performing companies are moving away from reactive audits and toward continuous performance monitoring. That means integrating quality control, delivery timelines, responsiveness, and compliance into a dynamic, always-on dashboard. If a supplier starts to slip, they know before it hits production.

Equally important is what happens upstream. Leading companies are embedding rigorous due diligence into onboarding, checking for labour violations, transparency issues, and ESG risks before they enter the chain. In an industry where traceability is a requirement, you need to know who and where your suppliers are, how they operate, and whether they’ll keep up when the pressure’s on.

Do you think this tariff pressure will finally push pharma companies to diversify their supplier base—or will cost still win out?

Cost will always matter, especially in the generics market, where tight margins and pricing pressure leave little room for flexibility. But relying on low-cost suppliers without visibility or agility is becoming a dangerous game. Many companies are learning that the hard way.

Diversification doesn’t require a massive overhaul. It starts with mapping your exposure, identifying choke points, and creating strategic alternatives—whether that’s dual-sourcing, shifting parts of the supply chain to more trade-friendly regions, or at the very least, establishing stronger alternative supplier relationships.

Companies that have invested in supplier intelligence are already ahead here. They know which suppliers can pivot, which contracts can be renegotiated, and which regions offer less tariff volatility.

The bottom line? Supply chains built only for price are brittle. The ones built for performance, continuity, and adaptability will win long term.

What are the warning signs companies should be watching for that indicate real risk of a drug shortage tied to these tariffs?

There are always signals—if you’re paying attention. Unexpected lead times or rises in input costs that don’t track with demand. A change in supplier behaviour: delayed responses, vague timelines, or avoidance of documentation requests. That often means they’re already under pressure, whether it’s cost-related or regulatory.

Tariffs also bring downstream noise: customs delays, reclassification issues, and new paperwork requirements. If your supplier isn’t equipped to handle that—or worse, isn’t communicating clearly how they’re managing that complexity—you’re already exposed.

But the biggest blind spot is often beyond Tier 1. That’s where disruption typically starts. If you’re not watching the full chain, your response time shrinks dramatically. The difference between a near miss and a major shortage often comes down to visibility—and the ability to act before the impact hits.