U.S. President Donald Trump signed an executive order on Monday aimed at strengthening domestic pharmaceutical production, while warning that he will impose tariffs on imported pharmaceutical products within the next two weeks. This move aims to reduce U.S. dependence on drug imports, which Trump considers a national security risk.
Key Points of the New Order
The executive order focuses on accelerating the approval process for new pharmaceutical manufacturing facilities in the United States:
- Streamlining FDA approval process – eliminating unnecessary requirements and making inspections more efficient
- Increasing inspection fees for foreign manufacturing facilities
- Tightening reporting requirements on the origin of active ingredients – especially for foreign manufacturers
- Implementing unannounced inspections abroad – FDA will switch from scheduled to surprise inspections
- Engaging the EPA – Environmental Protection Agency to expedite approvals for new production facilities
- Simplifying administration – designating a single point of contact for coordinating applications
Tariff Threat and Its Impact
Trump announced that he will introduce tariffs targeting pharmaceutical products within two weeks. This move follows a Section 232 investigation launched in April that examined how drug imports affect national security.
The U.S. imports drugs worth over $200 billion annually, of which 73% come from Europe, primarily Ireland, Germany, and Switzerland. European companies, drug manufacturers in India, and medical equipment makers in China will be the most affected.
Pharmaceutical Companies’ Responses
Several pharmaceutical giants have already announced increased investments in domestic production, including Roche, Novartis, Eli Lilly, Johnson & Johnson, and AbbVie.
However, not all reactions are positive. Pfizer CEO Albert Bourla stated that the tariff threat is deterring his company from further investments in research, development, and manufacturing in the U.S.
Context and Risks
According to the White House, building new production capacity for pharmaceuticals can currently take 5 to 10 years, which is “unacceptable” from a national security perspective. Trump commented: “We don’t want to buy our drugs from other countries because if we’re in a war, we’re in trouble. We want to be able to make our own drugs.”
FDA Commissioner Marty Makary criticized the current system where “American drug manufacturers are subjected to rigorous inspections, while foreign facilities have it much easier with scheduled visits.”
The production of most active pharmaceutical ingredients has shifted to China and other countries in recent decades, primarily due to lower labor costs.
Benefits and Risks of Reshoring
According to GlobalData, bringing production back to the U.S. can strengthen the pharmaceutical supply chain and reduce the risk of supply disruptions. However, it may also increase production costs and drug prices, raising concerns about affordability.
Trump presents his pharmaceutical industry policy as part of a broader tariff agenda. On Sunday, for example, he threatened to impose 100% tariffs on foreign films, demonstrating his willingness to use tariffs as a tool of economic and security policy across various sectors.
