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Mexico imports more than 85% of its active pharmaceutical ingredients (APIs), but steroid hormones, selected oncology, respiratory, and endocrinology inputs, and a growing range of chronic-disease generics now have viable domestic or nearshore second sources . Antibiotics, acetaminophen precursors, and insulin remain concentrated in Asia, while 2027 procurement rules rewarding local API production and the exclusion of generics from US Section 232 tariffs shape sourcing decisions for drugmakers, distributors, and public buyers.
Mexico imports more than 85% of the active pharmaceutical ingredients (APIs) it uses, yet viable domestic or nearshore second sources already exist for a defined group of molecules: steroid hormones, a portfolio of oncology, respiratory, and endocrinology ingredients, and a growing range of generic APIs for chronic disease. Antibiotics, analgesic precursors, and insulin remain largely single-sourced from Asia.
The gap between these two groups explains where public and private investment is moving. Grupo Neolpharma, the domestic drugmaker expanding API capacity in the State of Mexico and Morelos, frames the shift as a structural one. Astrea Ocampo, CEO, Grupo Neolpharma, said during the company’s May 2026 investment announcement that the world is “shifting from hyperglobalization toward the regionalization of supply chains.” The company’s projects, together with those of TAPI and Bayer, define most of the country’s current second-source capacity.
The baseline remains one of high exposure. The International Finance Corporation (IFC) estimates that over 85% of APIs used in Mexico come from abroad. Concentration is most acute in high-volume essentials. China supplies roughly 70% of the precursors used to manufacture acetaminophen and, by some estimates, up to 90% of the active ingredients behind widely used antibiotics, MBN reports. Germany Trade and Invest (GTAI) also identifies insulin as an API category where Mexico depends heavily on Chinese imports. For these molecules, no domestic or regional producer currently offers the scale needed to act as a credible alternative supplier.
Against that backdrop, Mexico manufactures 82 APIs, according to government figures, reports MBN. The Mexican Association of Pharmaceutical Laboratories (AMELAF) estimates that 12 to 14 Mexican companies are capable of producing APIs. Three clusters of molecules stand out as viable second sources today.
The first is steroid hormones. Bayer’s chemical plant in Orizaba, Veracruz, produces APIs that are mainly steroid hormones and is one of the company’s four API facilities worldwide. In 2025, Bayer committed around MX$600 million to modernize the site as part of a MX$3 billion, five-year investment plan in Mexico. Because the plant already serves Bayer’s global network, hormonal APIs are among the few categories where Mexican output is integrated into international supply rather than limited to the domestic market.
The second cluster covers oncology, respiratory, and endocrinology ingredients. TAPI’s plant in Lerma, State of Mexico, runs 12 production lines and makes 35 APIs, reports MBN. The site holds approvals from the US Food and Drug Administration (FDA), the Federal Commission for the Protection against Sanitary Risks (COFEPRIS), and health authorities in Europe, Brazil, and Japan, and it supplies ingredients for 68 medicines listed in Mexico’s compendium of health supplies. It also sources more than 75% of its raw materials locally. In July, the company announced a MX140million(US8 million) expansion that includes domestic production of 5-fluorouracil, a widely used oncology API, through a co-investment with a national supplier. Pedro Goya, General Director, TAPI Mexico, describes the project as one that “represents a strategic point for medicine supply.” Multiple regulatory approvals are what make Lerma a qualified second source for buyers in the US, Canada, and the EU, not only for Mexican formulators.
The third cluster consists of generic APIs for chronic disease, where capacity is expanding but still ramping up. Neolpharma’s portfolio spans central nervous system, cardiovascular, oncology, and diabetes therapies, and its affiliate NeolSyM operates an API plant in Ecatepec, State of Mexico. In August, the IFC announced financing to acquire and modernize an API facility in Cuernavaca, Morelos. Separately, Neolpharma plans three plants in Toluca with a combined annual capacity of 2 300t of pharmaceutical ingredients, according to Mexico’s Ministry of Foreign Affairs, as part of a MX750million(US43 million) commitment. These projects broaden future second-source options for generics, although most of the new volume is not yet commercially available.
Beyond Mexico, the nearest regional alternative for generic APIs is Brazil. Nortec Química, considered the largest API manufacturer in Latin America,using proprietary technology. For Mexican buyers, Brazilian supply diversifies away from Asia, but sanitary registration and dossier changes before COFEPRIS remain a precondition for any switch.
US policy is also shaping the economics of second sourcing. Section 232 tariffs of up to 100% on patented pharmaceuticals and their APIs entered into force for large companies on July 31, 2026, and for the remaining importers on Sept. 29, 2026, according to WilmerHale. Generics, biosimilars, and their ingredients remain excluded from the measure for now. As a result, Mexican API producers serving generic supply chains face no Section 232 tariff penalty when supplying the US, while producers of patented ingredients face a more complex calculation.
Domestic procurement rules are the main lever expected to expand local second sources. Guidelines published in the Official Gazette of the Federation (DOF) on May 21, 2026, introduce a points-based criterion that rewards bidders who perform substantive stages of the value chain in Mexico, including API manufacturing, in tenders by Laboratorios de Biologicos y Reactivos de Mexico (Birmex) for deliveries from 2027. The criterion applies only to open international tenders, and Birmex has yet to define the numerical weightings. Public procurement is the lever most within Mexico’s own control, MBN reports.
For procurement and supply chain executives, the result is a segmented map. Hormonal and selected oncology APIs already have qualified Mexican sources with international approvals. Chronic-disease generics have a domestic pipeline that will add volume from 2027 onward. Antibiotics, acetaminophen, and insulin still lack a domestic or nearshore second source at commercial scale, which makes them the categories most exposed to disruption in Asian supply.
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