The pharmaceutical industry is comprised of multiple supply chains, due to its complexity. From an idea’s inception, to clinical trials, to ultimately, the approval of a drug and its commercialization, a successful launch requires flawless stakeholder execution.

Many of those processes—including the manufacturing—have often been done overseas, as opposed to domestically in the United States. That tide is now turning, and Pharmaceutical Commerce analyzes what that signifies.

What exactly is pharma reshoring?

Pharma reshoring—also known as onshoring—is the process of relocating pharmaceutical manufacturing and supply chain operations back to the US in order to bolster domestic capacity.

Pharma reshoring isn’t a new concept. Why is it gaining momentum now?

Several key forces are currently driving this reshoring movement:

• Supply chain disruptions exposed vulnerabilities in global outsourcing.
• New policy incentives, including tariff and regulatory programs, are encouraging domestic production.
• There is a rise in federal and industry attention on supply chain security.

Do tariffs and trade policy influence reshoring decisions?

Yes. Trade wars have been in full swing since February 2025, initiated by President Trump’s decision to impose 25% tariffs on Mexican and Canadian imports—along with 10% on goods coming from China—to encourage these nations to act on limiting illegal immigrants and fentanyl from entering the United States.

It’s no secret that Trump has been a huge supporter of these tariffs to encourage reshoring of manufacturing back to the US. In August 2025, Trump issued letters to 17 of the largest pharmaceutical companies—including Eli Lilly, Genentech, and GSK—expressing urgency for making changes along the drug pricing front.

The letters—which all have the same wording—stem from an executive order (EO) he enacted in May that essentially proclaimed that pharma companies need to treat the United States as a most-favored nation (MFN) as it pertains to drug pricing. The EO notes that US drug prices need to be less than or equal to the drug’s lowest price in other nations, as a way of establishing fairness.

This includes extending MFN pricing to Medicaid; guaranteeing MFN pricing for newly launched drugs; returning increased revenues abroad to American patients and taxpayers; and providing for direct purchasing at MFN pricing.

Fast forward to late September 2025, when Trump revealed that the United States will be enacting a 100% tariff on any branded or patented drugs that are entering the country.

The duty was supposed to take effect Oct. 1, 2025, with the caveat being that the tax will not apply to any businesses that are constructing domestic production plants. (That duty has yet to be enacted).

Then, on Feb. 1, the FDA took what Commissioner Marty Makary calls a "bold step" to bringing drug manufacturing back to US soil by launching the PreCheck Pilot Program, a two-phase initiative designed to eliminate regulatory guesswork for domestic facilities.^1,2 For the first time, manufacturers can get early technical advice and pre-operational reviews before they even file a formal drug application. By streamlining the path for critical medications, FDA aims to shore up the supply chain and end decades of reliance on overseas production.

How does reshoring benefit patients and the healthcare system?

Reshoring offers the following benefits:

1. Greater manufacturing reliability and reduced foreign dependence on critical therapeutics
2. Improved quality control under US regulatory oversight.
3. More agile responses to shortages or public health emergencies: Investments—in the form of commitments to expand US API production and R&D facilities—highlight a commitment from industry to patient access and supply stability

Which companies are actively investing in domestic manufacturing?

Among the big pharma companies that have announced major US manufacturing commitments, include AstraZeneca who is financially committing $50 billion in US manufacturing and R&D through 2030.

GSK is pledging $30 billion to expand biopharma production and facilities in the US, while AbbVie committed $195 million to expand domestic API manufacturing.

These, along with other initiatives, illustrate how reshoring is aligning corporate strategy with national production priorities.

How does reshoring impact the pharmaceutical supply chain network?

Reshoring often requires companies to reevaluate supplier diversification strategies, along with high-value domestic capabilities for APIs and finished dosage forms.

Contrary to popular belief, onshoring isn’t necessarily about eliminating global partnerships, but rather, creating more resilient, balanced networks that can endure any future disruptions.

What are the main challenges to reshoring?

Challenges include:

• High capital costs of building or upgrading facilities.
• Ensuring a skilled workforce to support advanced manufacturing.
• Navigating complex regulatory requirements for domestic production.

Given that the tariff situation continues to be in limbo, handling it involves specific operation steps that pharm executives can take to mitigate risk.

“I think to just simplify the things I would do if I were a US or even a non-US life sciences company looking to figure out how I managed my drug supply, and being able to get it to do business in the United States, is [key]. I'd want to try and stockpile as much inventory as I could in the US, just to take that tariff uncertainty out of it,” Brad Stewart, BDO’s national life sciences co-leader explained to me over the summer. “The product’s already on shore, and I can then sort of deal with what happens, or at least have a little bit more time to do that.”

How can companies prepare for reshoring?

Industry best practices include:

• Conducting detailed supply chain risk assessments
• Evaluating strategic products and components for domestic production
• Investing in digital tools that improve transparency and agility across the network

Who are the stakeholders most affected by reshoring?

Given the above, key stakeholders that are impacted include:

• Pharma manufacturers reviewing footprint strategies
• CMOs and contract manufacturers with US facility capabilities
• Healthcare professionals and distributors reliant on supply continuity
• Regulators and policymakers shaping incentive programs
• Patients and payers benefiting from more stable access

References

1. FDA Launches PreCheck Pilot Program to Strengthen Domestic Pharmaceutical Manufacturing. US Food & Drug Administration. February 1, 2026. Accessed February 10, 2026. https://www.fda.gov/news-events/press-announcements/fda-launches-precheck-pilot-program-strengthen-domestic-pharmaceutical-manufacturing

2. Haigney S. Copay Accumulators and Programs that Harm Access to Healthcare. Pharmaceutical Technology. February 2, 2026. Accessed February 10, 2026. https://www.pharmtech.com/view/fda-launches-precheck-pilot-program-to-bolster-domestic-drug-manufacturing