Realistic Timelines for Pharma Manufacturing Reshoring

In April of this year, President Trump announced plans to impose 100% tariffs on branded pharmaceutical imports. At the time, he set a deadline of July 31, 2026, for major pharmaceutical companies to negotiate onshoring agreements (which would reduce the tariffs to 20%).

Also, companies that negotiated deals with the administration as part of the President’s MFN initiative would be exempt from these tariffs. Further complicating the issue, regions with previously negotiated tariff deals would also be exempt from 100% tariffs on pharma imports.

This move is part of the President’s plans to strengthen domestic manufacturing and reduce the United States’ reliance on imports.

Pharmaceutical Executive spoke with Ryan Last, a senior associate at Troutman Pepper Locke, about the situation pharmaceutical and biotech companies face with just one month remaining before the initial deadline hits. While previous deadlines have passed by, pharma companies still have time to prepare and make plans, while also bracing for the larger impact that these tariffs may have.

Pharmaceutical Executive: What are realistic timelines for reshoring pharma and biotech manufacturing?
Ryan Last: Companies should watch not just the tariffs themselves, but the entire ecosystem of trade, regulatory, and industrial policy from the US and overseas. Right now, there are negotiations going on around USMCA, and pharmaceuticals could be a big part of that.

I think refinements to Section 232 (its scope and exclusions) could happen. We're going to see how Commerce handles the first wave of onshoring applications, which will set the precedent moving forward, and whether additional measures hit related inputs like packaging or device components, that's yet to be seen.

On the international side, we're going to look to see what countermeasures China and India implement on raw materials and APIs, and whether US allies coordinate to build non-Chinese manufacturing or shift production onshore into Europe to get better deals within the European Union, similar to what other countries have gotten.

We're going to see shifts in pricing and availability for critical APIs, as well as customs enforcement trends, I expect CBP will increase scrutiny of HTS classification, country-of-origin classification, and valuation.