Pharma giants invest billions in U.S. manufacturing to evade tariffs

In the United States, proposals for a 200% tariff on pharmaceutical imports have prompted significant investment from large pharmaceutical companies aiming to boost domestic production. Jena Santoro, the Global Head of Research & Analytics at Everstream Analytics, has indicated that a grace period of approximately one to one and a half years is likely for pharmaceutical companies to establish manufacturing operations in the U.S. before these tariffs take effect. Major players such as AstraZeneca, Roche, and Eli Lilly have committed to sizable investments intended to enhance their manufacturing capabilities within the country. On July 22, 2025, AstraZeneca declared plans to invest $50 billion into U.S. production, with a substantial portion earmarked for a new manufacturing center in Virginia. Simultaneously, Roche announced a parallel investment of $50 billion that includes establishing multiple research and development sites and expanding their manufacturing facilities across various states, including Indiana, Pennsylvania, Massachusetts, and California. Roche anticipates that these investments will generate over 12,000 new jobs, marking a vital step toward bolstering the pharmaceutical supply chain amid tariff uncertainties. Eli Lilly has been proactive in addressing potential tariff impacts, having announced earlier its intention to invest $27 billion to establish four new production facilities within the U.S. Their strategy focuses on reinforcing the country's pharmaceutical supply chain, with specific emphasis on producing active pharmaceutical ingredients, elements critical to drug manufacturing. Notably, two of the planned Lilly facilities will engage in synthetic chemistries, a sector that has seen a decline in U.S. manufacturing. Other companies like Merck have also ramped up investments in response to the tariff threats. Merck has committed over $12 billion to enhance its U.S.-based manufacturing and research capabilities, with additional plans to invest $9 billion by 2028. These developments indicate a significant shift in the pharmaceutical industry's operational strategies, influenced largely by governmental tariff proposals aimed at reshaping the landscape of U.S. manufacturing and reducing reliance on foreign production, particularly from countries like China, which have historically dominated the production of active pharmaceutical ingredients.