From Yahoo Finance: 2025-06-15 10:00:00

The pharmaceutical industry is set to bring over $270 billion in manufacturing commitments to the US. Johnson & Johnson plans $55 billion over four years, Eli Lilly announced $50 billion. The need for reshoring drug manufacturing is driven by the pandemic, patent expiries, and an aging population.

Amid threats of tariffs on imported pharmaceutical goods, companies are expediting long-term plans. Lilly is aligning with Trump’s goals by bringing chemical component production back to the US. The industry shift is not just due to tariffs, but also supply chain risks and drug demand.

The $270 billion investment in pharmaceutical manufacturing is likely an undercount. Lessons from the pandemic have led to a focus on regionalizing supply chains. With an aging population comes greater drug demand, driving the need for increased manufacturing capacity in the US.

As construction activity ramps up in the pharmaceutical sector, challenges arise. Delays in current projects, increased material costs due to tariffs, and immigration policy disruptions are impacting the industry. Construction prices have risen 45% since 2020, leading to potential project pauses and cost overruns. The construction industry faces pressure as companies announce new projects of varying sizes and scopes, impacting the sector significantly. Collaboration between large and small firms is expected to meet accelerated timelines. Will the construction rush bring manufacturing back to surpass historical highs in the US, with new potential locations emerging?

Legacy pharma hubs may not be the only focus as drugmakers consider spreading out across the US. Automation and robotics have reduced labor requirements, making highly skilled workers vital but in smaller numbers. The Trump administration’s efforts to distribute sites may lead to new locations, yet workforce availability remains crucial for successful operations.



Read more at Yahoo Finance: Pharma manufacturing ‘boom’ faces high costs, potential delays