The U.S. reported more than 300 active drug shortages in 2024, a significant increase from the previous year. Antibiotics, sterile injectables, anti-cancer drugs. Essentials. And the USP's 2025 Annual Drug Shortage Report said that 89 percent of the shortages from last year continued this year, and more than 40 life-saving drugs were in shortage for three years in a row.
More often than not, it was not a sudden surge of demand that was the root cause. The weak link upstream was an unreliable raw material supplier of pharma which was an unreliable supplier.
When it comes to selecting suppliers, you as a procurement manager, QA professional or supply chain head in the pharmaceutical industry, know that it can be more than just a business decision. A regulatory hazard. It's a safety of patients matter. It's a problem which can be a problem in months of production scheduling and planning in a single failure.
This guide will take you through the exact process of evaluating pharma raw material suppliers – what to look for, what to avoid, and a guide on how platforms like ChemDmart make the process so much easier.
Almost 48% of the essential medicines depend on at least one critical starting material that is produced in only one country. It's a regulatory action, a natural disaster, a factory shutdown, or one of these: any can result in a shortage that can happen to patients halfway around the world.
What's more, the price of APIs experienced quite an increase in 2025 with several manufacturers reporting increases in the cost of some of the most commonly used molecules of 12–20% due to a number of factors, including new tariff policies introduced in the U.S. In September 2025, the FDA launched a much-anticipated initiative known as the Green List, which is actively blocking unverified foreign API sources from the US supply chain.
Regulators' message: supplier oversight is no longer a back-office procurement task. It is a key compliance requirement.
What Regulators REALLY want!
As you decide to create your own supplier assessment process, it's important to understand what suppliers are already required to do by global regulators.
All parts suppliers must be qualified and maintained.
|
Regulatory Framework |
What It Requires |
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FDA 21 CFR 211.84(a) |
Every component supplier must be approved and monitored |
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EMA GMP Chapter 5 |
Raw materials may only be purchased from approved suppliers |
|
ICH Q10 |
Quality risk management must be applied to supplier management |
|
ICH Q9 |
Suppliers should be classified by risk level (high / medium / low) |
|
USP General Chapter <1083> |
Risk-based framework for qualification and ongoing performance monitoring |
|
WHO-GMP |
GMP certification required for API and excipient suppliers |
These aren't suggestions. Your supplier controls will be assessed as part of the overall maturity of your quality system in an FDA inspection today and not as a stand-alone issue.
Let's start understanding how to evaluate Pharma Raw Material Suppliers! Let's beginners with the practical 6-step framework to evaluate Pharma Raw Material Suppliers!
Step 1: Determine the Supplier's Risk Level
Not all suppliers are created equal and treating all suppliers alike is time consuming and unprofitable.
ICH Q9 specifies a tiered system of suppliers, depending on the criticality of the material supplied:
This classification is a good beginning. It defines the extent of due diligence required – and where it needs to focus audit efforts. This initial step is quicker with ChemDmart's filter system that allows filtering suppliers by company type (Manufacturer, CDMO, Trader, CRO) directly from the search page.
Step 2: Confirms Certifications & Regulatory Status
This is non-negotiable. A reputable pharma raw material supplier in regulated markets will have verifiable certifications, and they will be sure to share them with you.
At least look for:
The certifications of a verified company profile are listed right on the company's profile page on ChemDmart — WHO-GMP, US-FDA, EDQM, CDSCO, MHRA, TGA, and more — enabling you to cross-check before reaching out to the supplier by phone.
Step 3: Audit Their Product Portfolio and Manufacturing Sites
The range of a supplier's product line is a good indicator of his or her expertise. A 200+ API company that makes API products in multiple therapeutic categories, has multiple sites, with site-specific regulatory filings is a different ball game than a trader who is selling third-party material.
As you are considering a supplier's portfolio, check for:
This is evident in Chemdmart company profiles. Consider Cipla Ltd, a well known name in Indian pharma, who have a history of compliance across all regulatory bodies and a vertically integrated business across respiratory, antiviral and anti-infective APIs. All their products, certifications, manufacturing locations and direct contact information are available on their ChemDmart profile. Like Zydus Lifesciences, a backward integrated company and strong regulatory presence in lifestyle and chronic disease APIs across the world and Supriya Lifescience with 86+ countries' representation by its US-FDA and EDQM approved facilities.
This type of company intelligence formerly required days of research. It's just a few clicks on ChemDmart.
Step 4: Assess Financial Stability and Business Continuity
This topic is a part of pharma procurement that doesn't get discussed enough and should.
Before committing to a critical supplier relationship, ask:
ChemDmart's company profiles include company age, size indicators, geographic footprint, and contact information — giving you a starting point for this assessment before you invest time in a formal audit.
Step 5: Conduct a Supplier Audit
If your supplier is a high-risk supplier (API manufacturer & CDMOs), then there is no substitute for an audit. An audit, onsite or offsite (both are accepted as of 2020), provides you with firsthand information in the areas the CoA can't get a look at.
A good supplier audit for the pharma sector should include:
Going up the supply chain, traceability of starting materials is achieved.Traceability of starting materials is achieved going up the supply chain.
The audit is not a 'tick the box' exercise. ICH Q9 suggests that re-auditing should be conducted at the same frequency as the supplier's risk classification and performance experience.
Step 6: Monitor performance continuously
A supplier is added to your approved list when they qualify. They stay there (or they get taken away) due to performance monitoring.
Monitor these KPIs for all essential raw material suppliers for the pharma industry:
It should be the norm and not the exception to include score cards and periodic performance reviews.
These are 7 red flags that indicate an unreliable supplier.
When considering any new pharma raw materials supplier, keep an eye out for the following warning signs:
ChemDmart has been developed with this issue in mind. A 5000+ verified suppliers, 2 million+ product listings, suppliers from 50+ countries, verified B2B e-marketplace for the pharma and chemical industries.
The advantage of the company profiles that really benefit procurement teams is that they offer a wealth of information before they even reach out to them:
There are companies such as Cipla, Glenmark Pharmaceuticals, GSK India, Zydus Lifescience, IPCA Laboratories and Supriya Lifescience that are already available to be accessed on the platform with full profile details.
It is not a substitute for an actual audit. However, it can significantly cut the time required for the pre-screening process, and provide procurement teams with the intelligence they need to confidently make shortlisting decisions.
Reliable pharma raw material suppliers do not only make procurement easier, they make your products safer, your audits cleaner and your supply chain resilient when the unexpected occurs. The structure below provides you with the structure to systematically evaluate any supplier. ChemDmart supplies you with the verified network to discover them.
