The FDA Moves to Modernize Drug Manufacturing Registration

On July 10, 2026, the FDA announced a proposed rule to streamline registration for single distributed manufacturing establishments that operate using a “hub-and-spoke” model.¹ The proposed rule would create a streamlined pathway and clarify registration requirements for certain foreign companies that manufacture APIs and drug products that indirectly enter the US drug supply. In addition, it would help reduce registration costs and generate efficiencies, according to the agency.

Currently, distributed manufacturing establishments use a central quality oversight hub with multiple manufacturing units in different locations and must register each of those units with the FDA separately. The new rule would allow the establishment to register as one unit.

Certain foreign drug manufacturing companies, such as those not registered with the FDA that distribute to other foreign establishments, would see registration and drug listing requirements clarified under the rule. “By aligning our regulations to the statutory requirements, this proposed rule would make it clearer that these establishments must register with the FDA and report on the drugs they produce, giving the FDA greater ability to detect and respond to potential safety concerns,” the agency stated in the press release.¹

“The FDA is proposing changes to our establishment registration regulations that would reflect how distributed manufacturing actually works—as one single establishment,” said Michael Davis, MD, PhD, acting director of FDA’s Center for Drug Evaluation and Research, in a press release.¹ “The proposed changes would make it easier for innovative manufacturers to operate efficiently, and give the FDA a clearer, more accurate picture of how and where drugs are being made.”

What Is the Impact on Industry?

Because each unit in a distributed manufacturing network currently has to register separately with the FDA, this complicates administration for those companies that run a central quality hub with multiple production units. This proposed rule would provide a single-registration pathway, and the network could register as one establishment, allowing for a streamlined process for adding, relocating, and removing units. This change would support newer manufacturing models such as modular and continuous manufacturing operations. However, companies would be required to give the FDA advanced notice of any unit relocations.

The rule may close a registration gap for some foreign manufacturers of APIs and other drug components, allowing for broader supply-chain transparency and traceability upstream. Currently foreign facilities that make drug components solely for further distribution to other foreign establishments have been able to avoid registration in the United States, because the product never directly enters the US supply chain at that stage.

“When an active ingredient in a medicine reaches an American patient, the FDA should be able to trace exactly where it came from,” said Dr. Davis in the press release.¹ “Closing this registration gap for foreign establishments is a concrete step toward increasing the supply chain transparency that patients deserve.”

Because this rule could cut registration overhead once finalized, any company sourcing APIs or intermediates from foreign suppliers that currently sit outside the registration net should expect those suppliers to face new registration/listing obligations, which could affect supply chain audits and sourcing decisions.

The Link Between Ingredient Suppliers and the Supply Chain

If this new rule impacts suppliers, it could impact a supply chain that is already strained, but it could also help protect it. The drug supply chain may be disrupted by a variety of factors, such as geopolitical impacts, manufacturing quality deficiencies, and a breakdown in ingredients supplies. If a drug is in shortage, patients cannot get the treatment they need.

The US Pharmacopeia released their annual drug shortages report in June 2026, which found that while shortages were down, they were lasting longer.²

“More than half (64%) of the drugs in shortage have been in shortage for more than 3 years, with 29 (39%) drugs being in shortage for more than 5 years,” the report states.² “Increased durations of drug shortages are a critical public health risk that can lead to compromised patient care, treatment delays, and unfavorable outcomes. Without intervention, prolonged shortages will continue to directly burden patients and healthcare providers.”

And generic drug manufacturers were specifically impacted.

“Manufacturers of generic drugs and their ingredients operate on thin, sometimes unsustainable margins,” said Matthew Christian, director of Supply Chain Insights at USP, in the press release.² “This report shows a relationship between prices received by manufacturers and continued production. Product discontinuations add to supply fragility and risk of future shortages if supply cannot meet demand.”

PharmTech spoke with Gabriela Grasa Mannino, senior director, Advanced Supply Chain Solutions at USP about the current state of the drug supply chain and what actions USP is taking to make supply more secure.³

“The nature of supply chain risks has also changed, as they are no longer exclusively episodic. We have moved from disruptions driven by isolated events to a more persistent, systemic level vulnerabilities,” Mannino told PharmTech.³ “Today, manufacturers operate in a more dynamic and less predictable environment, where disruptions are harder to anticipate and increasingly complex to manage. Looking ahead, these challenges are likely to persist, especially for products that rely on concentrated or highly specialized production. This really reinforces the need to address the underlying system, not just react to the outcomes.”

References

1. FDA proposes rule to modernize drug manufacturing registration. FDA. Press release. July 10, 2026. https://www.fda.gov/news-events/press-announcements/fda-proposes-rule-modernize-drug-manufacturing-registration
2. USP Annual Drug Shortages Report finds rising discontinuations, hidden upstream risk. Press release. USP. June 9, 2026. https://www.usp.org/news/usp-2026-annual-drug-shortages-report-rising-discontinuations-supply-chain-risk
3. Mannino GG, Haigney S. The role of standards in the drug supply chain. PharmTech.com. July 7, 2026. https://www.pharmtech.com/view/the-role-of-standards-in-the-drug-supply-chain