Star anise contains anethole, the same ingredient which gives the unrelated anise its flavor. Recently, star anise has come into use in the West as a less expensive substitute for anise in baking as well as in liquor production, most distinctively in the production of the liquor Galliano. It is also used in the production of Sambuca, pastis, and many types of absinthe.
Shikimic acid, a primary feedstock used to create the anti-flu drug Tamiflu, is produced by most autotrophic organisms, but star anise is the industrial source. In 2005, there was a temporary shortage of star anise due to its use in making Tamiflu. Late in that year, a way was found of making shikimic acid artificially. A drug company named Roche now derives some of the raw material it needs from fermenting E. coli bacteria. There is no longer any shortage of star anise and it is readily available and is relatively cheap.
Star anise is grown in four provinces in China and harvested between March and May. The shikimic acid is extracted from the seeds in a ten-stage manufacturing process which takes a year. Reports say 90% of the harvest is already used by the Swiss pharmaceutical manufacturer Roche in making Tamiflu, but other reports say there is an abundance of the spice in the main regions - Fujian, Guangdong, Guangxi and Yunnan.
Japanese star anise (Illicium anisatum), a similar tree, is not edible because it is highly toxic; instead, it has been burned as incense in Japan. Cases of illness, including "serious neurological effects, such as seizures", reported after using star anise tea may be a result of using this species. Japanese star anise contains anisatin, which causes severe inflammation of the kidneys, urinary tract and digestive organs.