Tariffs trigger a $270B pharma shift back to US production
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In 2025, pharmaceutical manufacturers are facing a fundamental disruption. The US government has proposed new tariffs, up to 245 percent, on drugs and active pharmaceutical ingredients imported from countries such as China, India, and Mexico. These shifts in trade policy, framed as national health security measures, are forcing pharmaceutical companies to reassess longstanding offshore supply chains.
The response has been swift. Manufacturers are investing heavily in domestic production to limit tariff exposure. For generic drugmakers operating on narrow margins, the policy changes present an urgent challenge. Companies that rely on low-cost foreign inputs must either absorb steep costs or risk losing access to the US market.
These shifts are also driven by lessons from the COVID-19 pandemic, when supply disruptions highlighted vulnerabilities in overseas sourcing. Reshoring, once considered cost-prohibitive, is being viewed as a necessary investment in supply stability.
Recent investments signal a reshoring trend
Biogen is among the firms leading this transition. In July 2025, the Massachusetts-based biotechnology company announced a $2 billion expansion of its manufacturing footprint in North Carolina’s Research Triangle Park. The project adds to the company’s existing investments in the region, which total nearly $10 billion.
The new facility will focus on biomanufacturing, producing complex therapies in a highly controlled environment. It is expected to begin operations in late 2025 and will create hundreds of technical and support roles. This move enhances Biogen’s proximity to US regulators and markets while reinforcing control over quality and distribution timelines.
The investment also reflects broader trends across the industry. Geographic proximity, regulatory alignment, and infrastructure readiness are becoming central to long-term capacity planning.
Major pharma players are reshoring with record-setting commitments
Biogen is not alone. Over the past year, pharmaceutical firms have announced more than $270 billion in US-based investments. Eli Lilly is allocating $27 billion across four domestic plants focused on active ingredient production and sterile injectables. These projects are expected to generate over 3,000 full-time jobs and tens of thousands of construction roles.
AstraZeneca has pledged $50 billion in manufacturing and research commitments through 2030. The company is targeting therapeutic categories where supply disruptions and geopolitical risks have limited flexibility.
These investments include high levels of automation, allowing companies to manage labor costs and improve production adaptability. By localizing manufacturing, companies are also repositioning their intellectual property, quality systems, and compliance functions within US jurisdictions.
Supply chain resilience and national security are reshaping pharma
Supply chain control is no longer a secondary concern. It has become central to both public and corporate strategy. Lawmakers have emphasized domestic manufacturing as essential to national health resilience, citing drug shortages during the pandemic as evidence of excessive foreign dependence.
To support this shift, the federal government has paired tariffs with grants and tax incentives. States such as North Carolina and Indiana are also offering targeted programs to attract life sciences investment. North Carolina’s ecosystem contributes more than $88 billion to the economy annually and supports more than 225,000 jobs.
Biogen’s expansion fits into this state-level framework. Local talent pipelines, supported by programs such as NCBioImpact, are helping companies staff high-skill facilities. With public and private interests aligned, new clusters of pharmaceutical production are forming across the southeastern United States.
Pharmaceutical companies now face a recalibration. While globalization has offered cost advantages, recent policy changes are pushing firms to weigh the long-term value of domestic control. Even if tariffs are later reduced, the move toward reshoring is likely to persist.
Challenges remain. Domestic capacity takes time to build, and several drug categories continue to rely on specialized imports. Labor shortages in advanced manufacturing roles could also hinder growth unless education systems adapt.
Still, the scale of new investments signals a broader transformation. Companies such as Biogen, Eli Lilly, and AstraZeneca are redefining competitive advantage to include production resilience and geographic alignment.
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