Secure Drug Supply Chain Act of 2026
- Sponsor
- Sen. Budd, Ted [R-NC]
- Committees
- Health, Education, Labor, and Pensions Committee (primary)
- Last action
- Jul 21, 2026
Bottom line
The bill aims to secure the U.S. drug supply chain by significantly enhancing FDA's enforcement powers against illicit imports and mandating greater transparency on the origin of pharmaceutical ingredients, particularly from adversarial nations, to reduce foreign dependence.
What it actually does
This bill directs the Food and Drug Administration (FDA) to enhance efforts to prevent the importation of unlawful, counterfeit, or unsafe drugs and their ingredients, particularly from China and other adversarial nations. It mandates quarterly reporting from drug manufacturers on the country of origin for active pharmaceutical ingredients (APIs) and key starting materials (KSMs), and expands the FDA's authority to refuse and order the destruction of illicit imports. Furthermore, it prohibits the registration of foreign establishments that use forced labor or violate U.S. sanctions.
Proponents argue
Proponents argue that this bill is essential for safeguarding U.S. public health and national security by reducing critical dependencies on potentially hostile foreign supply sources and combating the influx of dangerous, counterfeit drugs. They contend it will increase visibility into the pharmaceutical supply chain, protect against intellectual property theft and forced labor, and strengthen the resilience of the nation's drug supply.
Opponents contend
Critics might express concerns that the bill's stringent new reporting requirements and import restrictions could lead to increased drug manufacturing costs, which may be passed on to consumers, potentially impacting drug affordability and availability. They may also argue that the aggressive timelines for regulatory implementation and the broad scope of enforcement could disrupt legitimate supply chains or create trade disputes without sufficient alternative sourcing options in place.
The bill is moderately complex due to its amendments to existing law and new regulatory mandates, but its core provisions are clearly stated, allowing a diligent reader to understand its implications within a reasonable timeframe.
Section 2
Statement of Purpose
This section outlines the bill's three main goals: preventing illegal drug imports from countries like China known for intellectual property theft and forced labor, increasing transparency in the pharmaceutical supply chain, and reducing U.S. reliance on active pharmaceutical ingredients (APIs) and key starting materials (KSMs) from China and other adversarial nations.
Supporters argue
Supporters argue this clearly articulates the critical need to safeguard public health and national security by addressing vulnerabilities in the drug supply chain.
Critics contend
No specific opposition is typically raised against a statement of purpose, though critics of the bill's methods might argue the stated purpose could be achieved through less restrictive means.
Tradeoffs
Balancing the desire for a secure supply chain with potential impacts on drug availability and cost.
Section 3(a)
Enhanced FDA Authority to Prevent Unlawful Imports
This provision directs the Secretary of Health and Human Services (via FDA) to utilize existing Federal Food, Drug, and Cosmetic Act authorities to prevent the import of counterfeit, unapproved, misbranded, or adulterated drugs, APIs, and KSMs. It places particular emphasis on preventing such imports from the People's Republic of China and other countries designated as adversarial by the Secretary of State.
Section 3(b)
Specific Enforcement Actions
This section mandates specific enforcement actions for the Secretary, including conducting compliance actions against entities involved in unlawful drug distribution, initiating civil and criminal actions (such as injunctions and seizures), refusing entry for such drugs, and inspecting compounding facilities to monitor for unauthorized receipt of drugs from adversarial countries.
Section 4(a)(1)
Quarterly Reporting for APIs and KSMs
This provision amends the Federal Food, Drug, and Cosmetic Act to require drug registrants to report information on active pharmaceutical ingredients (APIs), key starting materials (KSMs), and acquired intermediates quarterly (instead of annually). This includes the identity, total amount, and country of origin (including specific establishment details) for these materials, especially those sourced from China or other 'foreign countries of concern.' The requirement phases in, starting with drugs on the Essential Medicines List.
Section 5(a)
Ban on Imports from Establishments Using Forced Labor or Violating Sanctions
This section amends Section 801(a) of the FD&C Act to refuse admission to drugs if their safety is based solely on foreign government information without U.S. inspections, or if they were manufactured in an establishment known to use forced labor (as defined in the Tariff Act of 1930) or to have violated U.S. sanctions (e.g., under the International Emergency Economic Powers Act).
Section 5(b)
Destruction of Refused Articles Presenting Significant Public Health Concerns
This section adds a new subsection (v) to Section 801 of the FD&C Act, allowing the Secretary to order the destruction of imported articles refused admission if they present a 'significant public health concern,' without the opportunity for export. The owner or consignee is responsible for the costs of such destruction, with appropriate due process provided.
Section 5(c)
Prohibition on Registration of Certain Foreign Establishments
This provision amends Section 510(i) of the FD&C Act to prohibit registration for any establishment that knowingly used forced labor or violated U.S. sanctions, and mandates the revocation of existing registrations for such establishments that were accepted prior to the Act's enactment.
Section 5(f)
Adulterated Drugs Definition Expansion
This section amends Section 501 of the FD&C Act to define an active pharmaceutical ingredient (API) as 'adulterated' if it hasn't been approved and was manufactured in an establishment not inspected within the preceding 3 years (or 5 years for countries with recognized inspection arrangements). It also defines a drug as adulterated if manufactured in an establishment found to use forced labor or violate U.S. sanctions, including those owned 50 percent or more by designated persons.
Requires that country of origin information for active pharmaceutical ingredients, key starting materials, and acquired intermediates be reported without regard to any distribution or shipment through a country other than the country of origin.
Section 4(a)(1)(C)(iii)
Why it matters:This is a standard legislative technique to prevent circumvention of reporting requirements by routing materials through intermediate countries to obscure their true origin.
Case for: Supporters argue this prevents bad actors from obfuscating the true source of materials, ensuring genuine transparency and accountability in the supply chain.
Case against: No specific case against this provision is typically raised, as it addresses a known loophole in supply chain tracking.
Estimated impact: Significantly enhances the accuracy and utility of supply chain origin data collected by the FDA.
Amends the Federal Food, Drug, and Cosmetic Act to refuse admission to drugs if their safety is based solely on information or certifications provided by a foreign government, including any inspection described in section 704(i), without routine inspections conducted by United States inspectors to verify compliance with this Act.
Section 5(a)(1)
Why it matters:This phrasing is typical for amending existing statutes, but its impact on FDA's inspection burden and reliance on foreign regulatory bodies is substantial and could be easily overlooked.
Case for: Proponents argue this ensures U.S. standards are directly verified by U.S. inspectors, rather than solely relying on potentially less rigorous or biased foreign government assessments, thereby enhancing drug safety.
Case against: Critics might argue this provision could significantly increase the burden on FDA's inspection resources, potentially creating backlogs and hindering the import of otherwise safe drugs if U.S. inspectors cannot keep up with demand.
Estimated impact: Could necessitate a substantial increase in FDA's foreign inspection capacity or lead to de facto import bans for drugs from countries where FDA cannot conduct routine inspections.
Expands the definition of an 'adulterated' drug to include any drug manufactured, prepared, propagated, compounded, or processed in an establishment that the Secretary, in consultation with the Secretary of Homeland Security, determines is owned 50 percent or more, directly or indirectly, by one or more persons designated to the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control (OFAC) of the Department of the Treasury.
Section 5(f)(2)
Why it matters:This is a technical legal detail that extends the reach of U.S. sanctions law into drug import regulations, a common practice in complex legislation but one that requires careful reading to fully grasp.
Case for: Supporters argue this closes a potential loophole, preventing entities subject to U.S. sanctions from indirectly participating in the U.S. drug supply chain, thereby strengthening national security and sanctions enforcement.
Case against: Critics might argue that tracking indirect ownership can be extremely complex and burdensome for importers, potentially leading to inadvertent violations or disruptions to supply chains due to opaque ownership structures.
Estimated impact: Significantly broadens the scope of entities whose products could be deemed adulterated, extending beyond direct sanctions targets to their indirectly controlled affiliates.