Starting in 2024 and ramping up through 2025, initiatives to expand pharmaceutical manufacturing have taken shape. As an industry once reliant on global production, the shift to domestic manufacturing has required massive efforts from both industry giants and government policy.
Let’s unpack the why behind this expansion to provide an understanding of the landscape shaping pharmaceutical manufacturing in 2026 and beyond.
Factors Driving Expansion in Pharmaceutical Manufacturing
The pharmaceutical industry is facing pressures from multiple directions, and this has caused a push for manufacturing expansion. Organizations are seeking to win the race to expand, modernize, and stabilize their manufacturing operations to stay successful amidst various obstacles.
Supply Chain Disruptions
One goal of an increase in onshore operations is to mitigate future supply chain disruptions. Pandemic-related drug shortages highlighted an over-reliance on imports by showing that 72% of active pharmaceutical ingredient (API) suppliers for the U.S. market were located overseas.
These drug shortages surged nearly 30% between 2021 and 2022, creating a bipartisan push to increase domestic manufacturing. Other disruptions, from natural disasters to factory incidents, exposed vulnerabilities that arise from foreign production.
Geopolitical Tensions
The most visible reason behind this shift has been due to the tariffs enacted by the current U.S. administration. To reduce barriers to production caused by the announced tariffs, pharmaceutical companies acted preemptively to secure domestic manufacturing.
Quality Control Issues
Currently, more than 50% of drug manufacturing sites supplying the U.S. are located overseas, where FDA oversight faces more obstacles. Contamination risks, factory closures, and lack of regulation are all concerns that contributed to the push toward domestic manufacturing—where quality-control is more easily monitored.
Surging Demand
Innovative new therapies, particularly novel obesity and diabetes drugs, have created a strong demand for increased production capabilities. As generics manufacturers plan to roll out copies of name-brand drugs, leading pharmaceutical firms seek to secure sufficient output.
Another driver of this surging demand is new cancer and immunotherapy medicines. These new biologics and advanced therapies, such as CAR-T and gene therapies, often require high-capacity bioprocessing plants. The expansion of manufacturing is an opportunity to invest in updating and creating facilities to stay competitive.
Emerging Technologies
Advances in manufacturing technology have created a need for construction of new facilities that integrate these processes. Many complex drugs require highly sterile bioreactors which are being built into these new plants.
New facilities are also increasingly adopting continuous processing, automation, and digitalization to improve yields and flexibility. To achieve these advances, companies have invested in updating their existing facilities as well as building new manufacturing hubs.
RELATED: Revolutionizing Pharma: AI’s Role in R&D and Manufacturing
Regulatory and Policy Changes
While the tariffs curbed reluctance to shift toward domestic manufacturing, other initiatives have been enacted to generate more positive reinforcement and encouragement for this expansion.
- FDA PreCheck: This FDA initiative, launched on August 7, 2025, aims to accelerate domestic drug manufacturing through a two-phase approach. Phase 1 provides more frequent communication during facility planning and construction, while Phase 2 targets early feedback for manufacturing and quality-control processes.
- Executive Order: On May 5, 2025, an executive order was passed directing the FDA to streamline approval of U.S. drug plants. This order mandates collaboration between the FDA and domestic manufacturers while also enhancing the inspection of foreign manufacturing facilities.
Manufacturing Investments Made by Leading Pharmaceutical Companies
The race to expand manufacturing has led to big plans by top pharmaceutical organizations, with many pledging billions in investment. See how pharmaceutical giants have approached expansion:
- Merck announced a $70 billion investment plan, including construction of new $3 billion Center of Excellence
- Eli Lilly pledged to invest $27 billion over 5 years to build 4 mega-sites
- AstraZeneca unveiled a $50 billion investment plan through 2030, including development of a new plant
- Johnson&Johnson pledged to invest $55 billion, including 4 new plants
- Novartis committed to invest $23 billion for 6 new plants
- Roche planned to invest $50 billion along with new facilities in North Carolina
- Sanofi pledged a $20 billion investment by 2030
- GSK planned for a $30 billion investment and new Pennsylvania plant
- Gilead pledged to invest $32 billion through 2030, including construction of new manufacturing hub
- AbbVie committed to investing over $10 billion through next decade, including $195 million investment to expand manufacturing plant
It’s clear that leading organizations have taken decisive measures to expand domestic manufacturing. But how will this impact the sector as a whole?
Implications for the Future of Pharmaceutical Manufacturing
With so many changes occuring in rapid succession, the impact of domestic manufacturing expansion is sure to have long-lasting effects. The future of the pharmaceutical industry is poised to develop across many key areas.
Supply Chain Resilience
Expanded domestic capacity means that U.S.-based pharmaceutical companies can expect to face fewer supply chain disruptions. Onshoring the production of biologics and APIs can mitigate potential risks from trade barriers, pandemics, and other vulnerabilities.
Though the path to full resilience has only just begun, this investment in domestic manufacturing is the start of a multi-year journey to reach this goal.
Increased Automation
As companies expand, they are building automation into new facilities from the ground up, enabling predictive maintenance, automated documentation, real‑time release testing, and digital production twins.
Accelerated Product Development
Newer factories may see improved productivity. Automation, process intensification, and continuous bioprocessing are shortening development timelines and enabling faster technology transfers. Facilities using continuous manufacturing can produce drugs faster and cheaper in the long term.
Impact on Emerging Markets
Markets that currently dominate generics and API production, such as China and India, may be affected by the push toward domestic manufacturing. Additionally, current domestic manufacturers may face increased competition due to onshoringefforts.
Potential for Higher Drug Prices
Global tariff pressures, combined with heightened manufacturing costs and supply chain redesigns, may drive increased drug prices in select markets. Analysts warn that tariffs could add up to $19 billion in costs to the pharma supply chain, which would likely reflect the price for consumers.
How Functional Service Providers Play a Role
Functional service providers (FSPs) are becoming essential to the next generation of pharmaceutical manufacturing. As companies expand capacity, they increasingly rely on partners who can:
- Deploy specialized technical talent at scale
- Manage operational workflows across multi‑site manufacturing ecosystems
- Support digital transformations, including MES, SCADA, and AI-based analytics
- Reinforce quality systems during rapid expansion
- Provide agility during periods of geopolitical uncertainty and shifting regulatory timelines
FSPs provide scalable, domain‑specific expertise without overextending internal teams. This model accelerates expansion while reducing regulatory and operational risk.
Insight Global Can Bring Pharmaceutical Organizations Forward
Whether you’re an industry giant looking to streamline operations or a start-up trying to get in the race, our capabilities can prepare your organization for the future. We bring together technical expertise, scalable delivery, and a people‑first approach that helps organizations grow.
Insight Global is ready to support the next generation of pharmaceutical manufacturing—contact us to get your partnership started.
Drive Innovation with Professional Services
Questions? Call us toll-free: 855-485-8853
