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Piramal Pharma Solutions is diversifying the supply of critical pharmaceutical materials beyond China, not abandoning China altogether. The company says its China Plus One effort began in 2019 and has since added alternate suppliers and in-house production steps to reduce dependence on single-country sources.
What Piramal’s China Plus One strategy means
China Plus One means adding at least one country beyond China as a source for a material. Piramal Pharma Solutions describes this as a way to diversify supply while continuing to benefit from China’s manufacturing footprint. A fall in the reported value of sourcing from China therefore does not prove that the company has stopped buying from China or moved every material elsewhere. Piramal’s strategy page outlines that distinction.
The company says the initiative began in 2019 in response to regulatory changes in China. It later expanded into a broader supply-chain resilience program focused on materials where a disruption or sourcing constraint could leave production dependent on one country. Piramal’s white paper describes the program and its reported progress.
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What the company reports it has changed
Piramal’s figures show a reduction in the number and share of critical materials without an identified source outside China, alongside a lower reported value of sourcing from China. These are company-reported figures; the cited materials do not establish independent verification or provide the accounting scope behind every figure.
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| Measure | Reported result | Period and qualification |
|---|---|---|
| Critical KSMs or intermediates flagged | 67 | Piramal Pharma Solutions, FY2024 |
| Materials classed high risk because supply relied entirely on China | 30 | Piramal Pharma Solutions, FY2024 |
| Critical materials without an ex-China source | 45% to 20% | Piramal Pharma Solutions, FY2024 to FY2025 |
| Materials that had relied solely on China one year earlier and were given alternate routes | 17 | Piramal Pharma Solutions, FY2025 |
| Remaining materials in the alternate-route goal | 13 | Piramal’s stated FY2026 target; completion is not confirmed in the cited sources |
| Value of sourcing from China | $32 million in 2022; $7 million in 2025 | Piramal Pharma Solutions, as reported in its white paper |
The 17 alternate routes reported for FY2025 refer to materials that had depended solely on China a year earlier. Separately, the company said it aimed to establish routes for the remaining 13 critical materials in FY2026. That is a target, not evidence that the routes were completed.
How the diversification works
Finding another country of origin is only one part of a pharmaceutical supply change. An alternate source must be suitable for the material and integrated into production. Piramal says it used several approaches:
- Map material-level risk: identify critical starting materials and intermediates, then assess dependence and supply risk.
- Qualify outside partners: evaluate custom-synthesis partners and identify alternate vendors in India and other locations.
- Transfer technology: provide the processes needed to onboard suppliers and establish an alternate route.
- Build backward integration: add in-house production steps at multiple sites, reducing reliance on external inputs.
- Reduce intermediary dependence: integrate more direct manufacturing rather than relying on layers of intermediaries.
Piramal says the aim is to protect continuity of supply while maintaining cost competitiveness. These options address different risks: a qualified alternate vendor diversifies the source, while in-house backward integration gives the company more direct control over production steps.
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Why the shift is incremental
On a November 2025 earnings call, CEO Peter DeYoung said the company saw a general desire among customers to reduce China exposure, while noting that not all customers were moving in that direction and that some discussions remained exploratory. He described possible shifts toward India for higher-volume needs and Western markets for other requirements, but cautioned that capacity and cost constrain how far sourcing can move. Customers may therefore shift a percentage of supply rather than make a wholesale change. These comments are management’s view, not an independent measure of customer or industry behavior. The Q2 FY2026 earnings-call transcript provides the surrounding context.
For a pharmaceutical manufacturer, a lower-cost or geographically different supplier is not automatically a usable replacement. Qualification and technology transfer take work, and capacity must be available. The company’s reported approach—combining alternate vendors, internal production and direct integration—reflects those practical constraints, rather than relying on a simple switch from one country to another.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the reported figures do and do not show
The numbers indicate that Piramal reports fewer critical materials without an ex-China source in FY2025 than in FY2024, and lower sourcing value from China in 2025 than in 2022. They do not, on their own, show which specific materials moved, how much volume shifted, whether every alternate route is in routine production, or whether the FY2026 target was achieved. The cited sources also do not define the accounting scope behind the dollar figures. The results should therefore be read as the company’s account of its diversification effort, not as proof of a complete exit or independently audited supply-chain transformation.
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