According to a new fourth-quarter market trend report from DPR Construction, major drugmakers have collectively announced commitments exceeding $370 billion in U.S. projects over the next five years. Despite market uncertainty regarding tariffs and rising costs, this massive investment is largely viewed as a direct response to the trade policies of the Trump administration, particularly the threat of increased duties. Tariff Drivers and Trade Deals: In late September, President Trump threatened to slap a 100% tariff on any "branded or patented" pharmaceutical product imported into the country unless the manufacturer was actively building a local production plant. Although the tariff rollout was subsequently put on hold for drug pricing negotiations, the administration has also inked country- and region-specific trade deals (including with Japan, Switzerland, the EU, and the U.K.) to cap or eliminatepharmaceutical tariffs. Investment Focus: The promised outlays cover more than just manufacturing; they are typically split between Research and Development (R&D) expenditure, Mergers & Acquisitions (M&A), and manufacturing expansions. Companies leading this investment wave include Johnson & Johnson (with a $55 billion commitment), Roche and Genentech, AstraZeneca, Bristol Myers Squibb, Gilead Sciences, Takeda, Eli Lilly, Novartis, and Sanofi. Most of these projects are concentrated on the East Coast, but states such as Indiana, Ohio, Kentucky, Virginia, and Texas are also proving popular locales. Policy Support and Regulatory Shifts: The US administration is supporting this onshoring trend through executive orders aimed at: Streamlining regulatory processes to promote domestic production of critical medicines. Strengthening the pharmaceutical supply chain by establishing a strategic reserve of active pharmaceutical ingredients (APIs). The FDA has also introduced new pilot programs designed to speed up approvals, particularly for generic drugmakers that test and manufacture their products in the U.S., including the requirement to use exclusively domestic sources for API. Domestic R&D Challenges: While manufacturing operations appear to be booming, the domestic R&D sector still faces a squeeze: Funding Cuts: Current funding proposals for 2026 continue a downward trend for major research agencies (NIH, CDC, and NSF). Real Estate Oversupply: Oversupply of real estate and limited inventory uptake in major U.S. R&D hubs are collectively dampening the life sciences R&D construction market. Nevertheless, some positive signs are emerging: the pace of novel drug approvals is starting to align with the previous year, and the combination of new technologies like Artificial Intelligence, coupled with economic factors such as lower interest rates and government incentives, is driving optimism. Source: https://www.fiercepharma.com/manufacturing/pharmas-have-poured-370b-us-manufacturing-amid-2025s-onshoring-boom-dpr
