By The United States is experiencing a pivotal transformation in its pharmaceutical manufacturing sector as companies increasingly bring production operations back to American soil after decades of offshore outsourcing. This reshoring movement, accelerated by recent global events and policy changes, represents a critical development for American healthcare security and economic resilience. Biotechnology leader Leen Kawas identifies this trend as essential to strengthening the nation’s healthcare infrastructure.
“Recent global disruptions have starkly revealed the vulnerabilities within our pharmaceutical manufacturing and supply chains,” explains Leen Kawas, Managing General Partner at Propel Bio Partners. “Reshoring pharmaceutical production isn’t merely economically advantageous—it’s a fundamental national security issue ensuring Americans have reliable access to essential medications.”
America’s dependence on foreign pharmaceutical manufacturing has grown substantially since the 1980s. Industry data indicates that approximately 72% of active pharmaceutical ingredient (API) manufacturers supplying the U.S. market operate overseas, with China and India accounting for a significant portion of this production. The U.S. pharmaceutical import market reached nearly $213 billion in 2024, more than two and a half times the total from a decade earlier.
Leen Kawas emphasizes that this dependency creates substantial vulnerabilities: “When critical medications come primarily from overseas, we’re exposed to supply chain disruptions from geopolitical tensions, transportation delays, and quality control issues. The COVID-19 pandemic vividly demonstrated how quickly these vulnerabilities can escalate into healthcare crises.”
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 produce 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.
According to Leen Kawas, these investments signal a fundamental shift in industry thinking: “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.”
Recent trade policies have added new urgency to reshoring efforts. The administration has implemented broad tariffs affecting imports from multiple countries and has specifically targeted the pharmaceutical industry. While pharmaceuticals were initially exempted from the initial “Liberation Day” tariffs, pharmaceutical-specific tariffs of “25% or higher” could be implemented soon.
“The current administration’s tariff policies are accelerating decisions that many pharmaceutical companies were already considering,” notes 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 making pharmaceutical reshoring economically viable. Innovations in continuous manufacturing, 3D printing of pharmaceuticals, and other advanced techniques enable greater production efficiency, reduce labor requirements, increase quality consistency, and ultimately make domestic production economically competitive with international alternatives.
Beyond security benefits, Leen Kawas highlights advantages throughout the American economy, including high-quality job creation across the skill spectrum, from production line workers to specialized engineers and scientists. Reshoring also promotes innovation by bringing production closer to research and development centers, facilitating faster iteration and more efficient knowledge transfer.
Despite compelling reasons for reshoring, significant challenges remain, including higher domestic labor costs, stricter environmental regulations, and substantial capital investments required for new facilities. Workforce development represents another critical challenge, as specialized skills for pharmaceutical manufacturing aren’t readily available in many American communities after decades of offshoring.
Nevertheless, Leen Kawas maintains that reshoring pharmaceutical manufacturing represents a strategic imperative for individual companies and the nation, promising greater security, resilience, and self-sufficiency for America’s pharmaceutical supply chain.
