On Monday, President Donald Trump enacted an executive order aimed at boosting domestic drug manufacturing. This initiative is designed to simplify the process for pharmaceutical companies seeking to establish production facilities within the United States.
The order enables the Food and Drug Administration (FDA) to enhance inspections of new manufacturing sites while utilizing existing resources. As announced by FDA Commissioner Marty Makary during a press briefing, the agency will also increase inspections of foreign drug manufacturing facilities by shifting to unannounced visits instead of previously scheduled ones.
“In the U.S., we have a perplexing system where American pharmaceutical manufacturers face rigorous inspections, while foreign facilities enjoy a more lenient approach,” Makary remarked. “Our inspectors won’t spend three or four weeks on-site anymore,” he added, highlighting the need for more efficiency.
This executive order precedes Trump’s anticipated tariffs on pharmaceuticals imported into the country. These proposed tariffs, along with initiatives to foster goodwill with the President, have already sparked a surge of domestic investments from drug manufacturers such as Eli Lilly, Johnson & Johnson, and AbbVie.
Trump indicated during the press conference that he would announce specific tariffs related to pharmaceuticals within a fortnight. In April, his administration initiated a Section 232 investigation examining how the importation of certain pharmaceuticals impacts national security, a move widely interpreted as a precursor to implementing tariffs on drugs.
However, some pharmaceutical leaders are expressing concerns regarding these plans. Pfizer’s CEO, Albert Bourla, recently stated that the looming threat of tariffs is causing his company to reconsider its commitment to expanding investments in American research and development and manufacturing.
The U.S. pharmaceutical manufacturing sector has seen a significant decline over recent years. The production of key active ingredients in medications has largely shifted to countries like China, driven by lower labor costs and other factors, as reported by the Food and Drug Administration.
In 2023, the United States imported $203 billion worth of pharmaceutical products, with 73% originating from Europe, particularly from countries like Ireland, Germany, and Switzerland, according to an analysis by consulting firm EY.
Reshoring drug manufacturing could strengthen the reliability of the pharmaceutical supply chain and limit the risk of disruptions, as noted in an April statement by GlobalData, a data and analytics firm. Nonetheless, this transition could lead to an increase in production expenses and drug pricing, raising concerns about affordability, according to GlobalData.
