The signs are quite clear: under the new administration, the United States is undergoing a massive push to strengthen domestic industrial production. Just in the past few days (at the time of writing, editor’s note), Roche announced a major investment—reportedly $50 billion—to expand its presence overseas. The announcement echoes similar moves by numerous other Big Pharma companies and is widely interpreted as a response to the imposition of 25% customs tariffs on product value, which make offshore manufacturing less advantageous after years of outsourcing to lower labor-cost countries such as China and India. If companies in the sector were to absorb the cost of these tariffs, it would have an inflationary effect, leading to unsustainable increases in drug prices for end buyers (i.e., governments) and serious risks to treatment access.
Leaving aside the debate over whether the tariffs imposed on pharmaceutical products constitute a violation of World Trade Organization rules (a matter that would require specific legal analysis), and taking into account the broader implications, what is being dubbed a trade war is expected to generate staggering revenues for the U.S. Treasury—estimated at $23 billion per year.
Such a goal justifies a deregulatory policy like the one adopted, which aims to streamline approval processes for new facilities and accelerate the reshoring effort. The rationale is to ensure that, given the time required to relocate complex manufacturing plants and corporate offices, the effects of these measures will materialize before the end of the presidential term.
On May 5, President Trump signed an executive order (Improving the Safety and Security of Biological Research) directing the FDA to simplify review procedures and actively cooperate with domestic manufacturers. In addition, the order requires the agency to strengthen oversight of the origin of active ingredients supplied by foreign producers and consider publishing a list of non-compliant facilities.
From Basel, with value
The move announced by the Basel-based giant aims to create 12,000 new jobs in order to achieve the ultimate goal of exporting a higher volume of medicines from the U.S. than it imports. It’s worth recalling that Roche already employs over 25,000 people across 24 sites in the U.S. and currently maintains a pharmaceutical trade surplus—at least in its Diagnostics division.
The investments, to be rolled out over a five-year period, will be used to build and expand next-generation research and development facilities. Specifically, the company has announced plans to construct a new gene therapy drug manufacturing center in Pennsylvania, a facility dedicated to weight-loss medications, and a center in Massachusetts focused on artificial intelligence research. With this initiative, Roche will add 13 new production sites and 15 new R&D facilities to its Pharmaceutical and Diagnostics divisions.
Despite the reassurances of CEO Thomas Schinecker—who stated that “patients in the United States and around the world” will benefit from the initiative—many concerns remain about what appears to be an inevitable weakening of European pharmaceutical manufacturing.
A clearly established trend
Already in early March, comments and debates were sparked by statements from Pfizer CEO Robert Bourla, who, during the TD Cowen Health Care Conference—an annual industry event—hinted at the possibility of shifting the company’s production focus back to its U.S.-based facilities.
Roche’s announcement follows similar declarations from several other major pharma players, all triggered in a domino effect by the news that tariffs will soon apply to goods in this sector as well. Not far behind, another Swiss company—Novartis—announced its intention to invest $23 billion to build and expand 10 manufacturing sites in the United States.
Even earlier, Eli Lilly launched its “Lilly in America” plan, pledging to invest $27 billion to build four new manufacturing plants on U.S. soil.
Johnson & Johnson has earmarked $55 billion for the construction of three new production sites in the country that already hosts its global headquarters.
In addition to the $21 billion already announced, Gilead has allocated a further $11 billion for reshoring activities: $5 billion for upgrading technology and existing R&D facilities in the U.S., $4 billion for new infrastructure projects, and $2 billion for digital and advanced engineering initiatives. The result: 800 new direct jobs and 2,200 indirect jobs throughout the supply chain.
AbbVie has announced a $10 billion commitment to support its growth and expansion program in specific therapeutic areas such as obesity. Part of the investment will go toward building four new production plants for active ingredients, pharmaceuticals, peptides, and medical devices. Notably, the company’s top-selling product—risankizumab, a humanized monoclonal antibody used to treat plaque psoriasis—is manufactured in the United States.
New York–based Bristol Myers Squibb, for its part, has announced a five-year investment plan worth $40 billion to strengthen its local manufacturing and R&D operations, with a focus on increasing the production of radiopharmaceuticals and intensifying research in artificial intelligence and machine learning
Reshoring and shortage: a deep connection
While the world reflects (not without good reason) on the ethical implications of the Trump administration’s decisions—often losing sight of their sheer pragmatism—the United States is preparing to launch a new challenge. Or rather, to shift the balance of pharmaceutical production, which is likely to move westward in the near future, leaping across the Atlantic without any intermediate stops.
Security and reliability of the value chain will increasingly be at risk, with critical consequences for the European Union’s ability to effectively control supply and pricing processes. Just a few weeks ago, the results of a survey conducted by the PGEU (Pharmaceutical Group of the European Union) between November 20, 2024, and January 24, 2025, revealed that all 28 European countries reported medicine shortages. The main causes identified—production interruption or suspension (68%), national pricing and procurement policies (54%), and unexpected surges in medicine demand (50%)—are unlikely to improve in light of recent international developments. Medicine shortages in the EU will continue to pose a growing challenge for national healthcare systems and for patients.
Let us not forget the repercussions in terms of networking and synergies, aspects that are by no means negligible when it comes to scientific research: the fragmentation of domestic production inevitably leads to a gradual loss of connection between manufacturing activities and research. Not to mention the declining stimulus for the local economy, job creation, and the promotion of developing specific advanced skills. The evolution of this scenario risks penalizing any other initiative focused on innovation and economic growth in the sector.
European initiatives wanted
Meanwhile, Dutch Health Minister Fleur Agema has attempted to downplay concerns by stating that the introduction of tariffs will not, at least in the short term, lead to an exodus of pharmaceutical production from the EU. The minister pointed out that investment decisions are part of long-term planning and are influenced by many factors, including ongoing research and development activities, available expertise, workforce, tax policy, and political stability. In response, however, the Dutch Association of Innovative Medicines (Vig) has called on the government to change its stance on the reform of EU pharmaceutical legislation.
The attempts to offer reassurance have also met with skepticism from the banking sector. According to multinational bank ING, there is a risk that branded drug production could shift from Europe to the US, and that the prices of generics in the EU could fall, reducing the incentive to reshore their production. For this reason, the European Commission should protect the European pharmaceutical sector and its manufacturing capacity, also promoting the reshoring of critical generic drug production. In other words: the response to US tariffs must be framed at a European level.
