The Trump administration’s April 2026 announcement of a 100% base levy on imported APIs and patented drugs has forced a sweeping re-evaluation of pharmaceutical supply chains across the industry.
Reshoring pharmaceutical manufacturing back to the US is not a new idea, but two developments have pushed it firmly back to the top of the agenda in 2026: a new tariff regime with hard deadlines and a clearer FDA regulatory pathway for domestic investment.
The tariff framework introduces a 0% rate for companies that sign both an onshoring commitment and a most-favoured-nation pricing deal, delivering immediate relief in exchange for a pledge to reshore manufacturing.
That relief expires on January 20, 2029, and the 20% onshoring-only rate is set to climb to 100% by April 2, 2030, for any company that has not reached an MFN agreement by then.
Generic drugs and biosimilars remain exempt from the current levy, though the order directs the Commerce Department to revisit that exemption within a year.
The economics of generics help explain why reshoring remains so difficult, as generics account for roughly 90% of US prescriptions but only 13.1% of total drug spending, leaving manufacturers with little room to invest in domestic capacity.
Brookings researchers have estimated that up to one-quarter of US generic drugs contain active pharmaceutical ingredients fully or primarily sourced from China, a vulnerability that stretches deep into the upstream supply chain.
A 2025 CSIS analysis found that tariffs and executive orders alone cannot overcome the regulatory complexity, commercial disincentives, and workforce shortfalls constraining domestic pharmaceutical manufacturing.
On February 1, the FDA launched its PreCheck Pilot Program, a two-phase initiative allowing manufacturers to receive early technical advice and pre-operational reviews before filing a formal drug application.
Announced reshoring commitments now exceed $480 billion across 22 sites and approximately 44,000 jobs, representing a significant wave of declared private sector investment across the country.
AstraZeneca is building a major new API plant in Virginia, Johnson and Johnson is investing $2 billion in a new facility in North Carolina, and AbbVie is spending almost $200 million to expand API manufacturing in Illinois.
Brad Stewart, BDO’s national life sciences co-leader, has highlighted the complexity of pharmaceutical supply chains, describing them as large, long, highly-regulated, and slow to change.
Stewart also cautioned that reshoring decisions need to account for the potential reversal of tariff policies under future administrations, adding a further layer of strategic uncertainty for manufacturers.
Experts argue that reshoring every medicine, API, and key starting material is not economically realistic, with the realistic goal being resilience rather than complete self-sufficiency.
The therapeutic categories most frequently cited as priorities include cardiovascular drugs, respiratory agents, antimicrobials, oncolytics, and the injectables used in acute care settings where supply disruption carries the most serious patient consequences.