Monica Ferraioli Monica Ferraioli
Jul 28, 2025 2:59:57 PM

 

A looming tariff threat is exposing cracks in pharma’s supply chain. Our new survey reveals why slow supplier qualification and regional overreliance could cost companies dearly. 

Earlier this year, we wanted to understand how pharma companies are preparing for potential U.S. tariffs and what that means for global sourcing, compliance, and supply chain strategy. 

So, we ran a survey in partnership with Contract Pharma. 130 pharma professionals across the U.S. and Europe responded. Turns out, there's a good reason supplier changes in pharma are such a nightmare, and the data proves it. 

Here's what really caught our attention: 

  • 60% of companies still manage supplier compliance manually 
  • 34% take over five months to qualify a new supplier 
  • And nearly 70% are concerned about sourcing APIs and raw materials from China and India 

Even if tariffs don't hit tomorrow, the pharma industry is still vulnerable because of their heavy reliance on limited regions and can't switch suppliers quickly when things go wrong.  

Download Full Report

 

Let's Break it Down...   

1. China and India sourcing is a major concern  

When we asked how tariffs might affect pharma companies, most (70% responses) pointed to one big risk: the heavy reliance on China and India for raw materials and APIs. If trade policies change, buying from these countries could get a lot more expensive. The obvious solution of switching suppliers isn't easy in pharma. It can take months to qualify a new supplier, and many companies aren't set up to move fast. Some companies are starting to rethink their supplier strategy. If you haven't already, now's the time to take a closer look at yours. 

2. Tariffs are pushing tough decisions 

As trade tensions intensify and tariff policies grow more unpredictable, pharma companies are under mounting pressure to protect margins and secure their supply chains. We asked professionals across the industry how they're planning to respond, and their answers reveal a clear shift toward both short-term cost strategies and long-term transformation. 
Here's how pharma professionals said they're reacting to rising costs and trade uncertainty: 

  • About 55% are planning to pass costs on to customers 
  • 47% are looking at domestic manufacturing 
  • 41% want to shift sourcing to tariff-exempt countries 
  • 32% are eyeing AI tools for supply chain management 

Shift-sourcing-to-tariff-exempt-countries


3. Supplier onboarding is slow 

About one-third of companies take more than five months to bring in a new supplier. That's five months of paperwork, audits, validations, and approvals before a single delivery happens. 

How-long-does-it-take-to-qualify-a-new-supplier

In an industry where raw material prices can spike overnight and shipments can get stuck at customs for weeks, five months is too long a waiting period and can turn into a liability for your pharma business. 

4. The compliance bottleneck 

Switching suppliers in pharma isn't quick or easy, and here's why: 

  • 62% of responses say compliance and validation slow things down 
  • 57% have trouble meeting GMP standards 
  • 60%  of reactions cite reliance on manual systems to manage compliance

Qualify-a-new-supplier-quickly

Many companies are stuck using spreadsheets and manual tracking. Manual processes, together with complex regulations, lead to significant delays. That's why pharma companies can't act fast when they need to. 

5. Some are betting on AI and automation

However, it's not all bad news! Despite the challenges, a significant number of companies are making strategic digital investments: 

  • 32% are exploring AI in their supply chain 
  • 25% are actively investing in digital transformation 
  • 31% are reshoring or nearshoring production to reduce risk 

Trade-and-supply-chain-challenges

Over a third of companies say better integration between ERP, QMS, and supplier management systems would improve cost modeling, especially when dealing with tariffs. Even small cost savings of 2–5% can add up fast across large volumes. 

Companies investing in tools like landed cost engines, analytics, and scenario planning are likely to make faster, more informed procurement decisions.  

Integrated digital platforms can speed up qualification, improve visibility into sourcing, and automate key data across systems, thereby enabling pharma companies to respond quickly to change. 

So What's Stopping the Rest? 

Here's what the survey reveals: 

  • 46% point to policy uncertainty 
  • Many are stuck with outdated systems 
  • Some don't have the internal know-how to move faster 

Only 12% of companies say they're facing zero barriers and actively investing. While 46% aren't investing because of tariff policy uncertainty, the other reasons, tight budgets and limited in-house capabilities, are common in any major transformation. What's important here is that the real issue isn't a lack of interest, but a lack of operational readiness, and that's something pharma companies can work on. 

Two Types of Companies Are Emerging. Which One Are You?

With tariff uncertainty, shifting supply chains, and growing pressure to move faster, we're seeing a clear divide in the pharma industry.

1. The proactive ones 

They're investing now. They see AI, automation, and digital integration as a strategic edge and are planning for the potential tariff changes. 

2. The cautious ones 

They're holding off. Whether it's budgets, systems, or leadership buy-in, something's keeping them stuck.

This split shows we may be reaching a turning point. As more proactive companies might see real results from their digital investments, including lower costs, faster decision-making, and stronger supply chain resilience, those that delay could fall behind in costs, flexibility, and risk management. 

So the question is, which one are you? Will you lead the change, or be left behind? 

How You Can Prepare for Tariff Disruptions 

According to the survey findings, pharma companies are moving cautiously amid ongoing tariff uncertainty. While 42% are still evaluating trade risks, nearly 70% are already concerned about sourcing raw materials and APIs, particularly from China and India. 

However, regulatory hurdles, cost pressures, and policy ambiguity are slowing action. Supplier changes require lengthy validation, and companies fear making the wrong move if trade policies shift again. Though some are stockpiling or qualifying backups, most aren't fully prepared to switch suppliers quickly, often due to compliance barriers and reliance on manual systems.  

So, how can pharma companies manage this volatility?

5 Actionable Recommendations

Here's what we recommend to help you move forward with confidence. 

1. Pre-approve alternate suppliers and score them on resilience

Prequalify backup suppliers ahead of time, assessing quality, capacity, and compliance, so you're prepared when the crisis hits. Tighten procurement controls by enforcing approval workflows, automating compliance checks, and monitoring supplier performance. Also, score suppliers on performance and resilience. 

When scoring suppliers on resilience factors like reliability, flexibility, lead times, and compliance history, you gain a clearer picture of their actual value. Resilient suppliers may offer faster recovery from disruptions, maintain backup capacity, and adapt more quickly in volatile conditions. Integrating resilience metrics into supplier scorecards lets you make smarter sourcing decisions and build stronger, more dependable supply chains.

2. Digitally map your supply chain

Without clear visibility, it's hard to spot risks until they cause delays or disruptions. Digital supply chain mapping helps you track every tier, from raw material suppliers to finished product logistics, so you can quickly identify weak links, high-risk regions, or over-reliance on a single source. With this insight, you can plan better, act faster, and reduce the impact of sudden changes like tariffs or supplier shutdowns.

3. Run "what-if" scenarios

Digital scenario planning tools and predictive analytics empower pharma teams to stay ahead of disruption. By modeling "what-if" situations like sudden tariff hikes, supplier shutdowns, or shipping delays, you can spot vulnerabilities early and build contingency plans before issues escalate. Instead of reacting under pressure, your team can respond with clarity and confidence when challenges arise. 

4. Use AI to predict disruptions before they happen

Will your vendors and suppliers deliver on time, in full, and meet quality standards? If not, how will that affect your testing timelines, production costs, or delivery schedules? Advanced analytics help you spot risks early and make smarter, faster decisions before committing. 

5. Integrate your ERP, QMS, and SCM systems so your data works together

When Enterprise Resource Planning (ERP), Quality Management System (QMS), Supply Chain Management (SCM), and validation tools operate in silos, teams waste time hunting for data, reconciling reports, or duplicating efforts. Integration brings these systems together, giving you real-time visibility into operations, quality metrics, and supplier performance. It helps teams make informed, timely decisions based on accurate data, whether it's adjusting production schedules, addressing quality issues, or responding to regulatory audits. Most importantly, integration ensures that every action maintains traceability, complies with GxP guidelines, and supports continuous improvement.

The Bottom Line

Tariff uncertainty isn't going away, and companies that delay action risk falling behind. Five-month qualification timelines just aren't going to cut it. Many companies are aware of the risks but aren't ready to respond quickly due to long supplier approvals, disconnected systems, and complex regulations. The companies that will thrive are the ones treating digital transformation like a survival tool, not a side project.

The good news is that with the right digital tools and strategies, pharma companies can manage risk, protect supply chains, and stay competitive. Because in life sciences, "wait and see" could cost you a lot more than you think.

STAEDEAN Life Sciences is a purpose-built pharma ERP solution embedded in Microsoft's AI-powered Dynamics 365 F&SCM. It's not just another tech stack—it's a comprehensive platform that streamlines operations and delivers the pharma-specific capabilities you need with precision. 

With STAEDEAN Life Sciences, you can: 

  • Control material sourcing and supplier qualification 
  • Ensure ongoing GMP compliance 
  • Improve cost modeling with real-time ERP data
  • Forecast inventory and lead times 
  • Run "what-if" scenarios to prepare for disruptions 
  • Optimize pricing and margin analysis
  • Plan resources and capacity more effectively
  • Score supplier performance and risk
  • Streamline documentation and validation 



Monica Ferraioli

Monica Ferraioli

LinkedIn

Product Manager with STAEDEAN, turning life science needs into purpose-built solutions.

TI_LOGO_TI-Logo-color andAXP_365

have now rebranded to

staedean-logo-teal