The United States is experiencing a significant transformation in its pharmaceutical manufacturing landscape as companies increasingly return production operations to American soil after decades of offshoring. While this reshoring movement offers numerous benefits for healthcare security and economic resilience, biotechnology leader Leen Kawas emphasizes that the transition faces substantial challenges requiring strategic planning and long-term commitment.
“We must recognize that reshoring isn’t simply about relocating final production steps to the United States,” explains Leen Kawas, Managing General Partner at Propel Bio Partners. “A true reshoring strategy requires developing local sources for raw materials and intermediate components. Otherwise, we’re merely shifting our vulnerabilities upstream in the supply chain.”
This comprehensive approach to reshoring represents a significant undertaking for pharmaceutical manufacturers. According to industry reports, the pharmaceutical reshoring process is complex and multifaceted, typically requiring five to ten years for full implementation. Companies must navigate regulatory requirements, secure adequate funding, develop specialized workforce capabilities, and establish local supply chains for raw materials and intermediate components.
Pharmaceutical Research and Manufacturers of America (PhRMA) has indicated that, partly due to stringent regulatory requirements, it can take 5-10 years and approximately $2 billion to bring a new production facility online in the United States. This substantial timeline and investment threshold underscore the long-term strategic commitment required for meaningful reshoring initiatives.
Workforce development represents another critical challenge in the reshoring journey. After decades of offshoring, the specialized skills required for pharmaceutical manufacturing aren’t readily available in many American communities. Addressing this skills gap necessitates investments in education, training programs, and partnerships between industry and academic institutions.
“Leading pharmaceutical companies now recognize that the benefits of domestic production—including supply chain security, quality assurance, and intellectual property protection—outweigh the short-term cost advantages of overseas manufacturing,” notes Leen Kawas. This recognition is driving significant investments despite the challenges involved.
Recent legislative initiatives, including the CHIPS Act, the Inflation Reduction Act, and various executive orders, have created financial incentives for pharmaceutical companies to establish or expand domestic manufacturing capabilities. These policy interventions reflect growing recognition of pharmaceutical manufacturing as a matter of national security rather than merely an economic consideration.
The administration’s recent trade policies have created additional momentum for reshoring efforts. While pharmaceuticals were initially exempted from specific tariffs, the President has signaled that pharmaceutical-specific tariffs of “25% or higher” could be implemented shortly. These potential tariffs create powerful incentives for companies to accelerate domestic manufacturing initiatives.
“The current administration’s tariff policies are accelerating decisions that many pharmaceutical companies were already considering,” says Leen Kawas. “While tariffs create immediate challenges for companies with global supply chains, they also provide powerful incentives to invest in domestic manufacturing infrastructure.”
Advanced manufacturing technologies are proving essential to making pharmaceutical reshoring economically viable. Innovations in continuous manufacturing, 3D printing of pharmaceuticals, and other advanced manufacturing techniques enable greater production efficiency, reduce labor requirements, increase quality consistency, and ultimately make domestic production more competitive with international alternatives.
Continuous manufacturing allows pharmaceutical companies to produce drugs continuously rather than using traditional large-scale batching. This approach enhances quality control, reduces waste, and facilitates faster responses to market demands—all critical factors for maintaining a resilient pharmaceutical supply chain.
Despite these challenges, several major pharmaceutical companies have announced significant investments in domestic manufacturing facilities. Eli Lilly unveiled plans to construct four manufacturing sites in the United States at a cost of at least $27 billion, three of which will be focused on producing active pharmaceutical ingredients. Similarly, Johnson & Johnson announced a $55 billion investment in U.S. manufacturing, research and development, and technology over the next four years.
“Companies that proactively invest in domestic manufacturing capabilities will be better positioned to navigate an increasingly unpredictable global environment,” concludes Leen Kawas. “By building resilient, flexible supply chains with strong domestic components, pharmaceutical manufacturers can ensure product availability while potentially gaining competitive advantages through enhanced quality, reliability, and innovation.”
As reshoring efforts continue to gain momentum, America’s pharmaceutical manufacturing sector appears poised for revitalization. Though the path forward presents significant challenges, the potential benefits for national security, public health, and economic prosperity make pharmaceutical reshoring a strategic imperative for individual companies and the nation.
