The Operational Reality of Reshoring Pharma Manufacturing: Q&A with Rohit Tripathi

In a conversation with Pharmaceutical Executive, Rohit Tripathi, VP of Industry Strategy, Manufacturing & CPG at RELEX, discussed the operational realities of reshoring pharmaceutical manufacturing to the U.S. and whether tariffs can meaningfully address the country's dependency on active pharmaceutical ingredients (APIs) from China and India.

Tripathi explained that reshoring pharma manufacturing is far more complex than reshoring a standard assembly plant, requiring qualified suppliers, validated processes, FDA-ready facilities, trained labor, and reliable distribution. He notes that unless the API, key starting materials, and packaging are also brought onshore, the supply chain remains exposed, pointing to FDA data showing that only about 9% of APIs used in U.S. generics are manufactured domestically, even as generics and biosimilars account for roughly 90% of U.S. prescriptions.

In the conversation, Tripathi also addressed the financial pressures tariffs could place on generic manufacturers, warning that thin margins leave little room to absorb higher input costs, with the risk that expenses are ultimately passed on to consumers through insurers. He cautions against blanket reactions such as indiscriminate stockpiling, arguing instead for targeted resilience strategies that account for shelf-life constraints and cold chain needs. Tripathi then outlined five metrics to track reshoring progress.

A transcript of Tripathi's conversation with Pharmaceutical Executive can be found below.

Pharmaceutical Executive: The administration's argument is that tariffs create the economic pressure needed to bring pharmaceutical manufacturing back to the U.S. What does the operational reality of reshoring actually look like?
Rohit Tripathi: You cannot reshore pharma the way you reshore a simple manufacturing or an assembly plant. The biggest hurdle in pharmaceutical manufacturing is you need qualified suppliers, you need validated processes, you need FDA ready facilities, trained labor, and of course a reliable distribution. So, for many products, you will also need to transfer the technical knowledge, qualify new sources without compromising the quality or availability. That's the key part.

The other part covers what does it mean by reshoring. If the API (the active pharmaceutical ingredient), the key starting points or packaging remains offshore, then your supply chain is still exposed. So, reshoring has to be designed with that end-to-end capability and not just as a label on the last step.

PE: How do tariffs address the U.S.’s dependency on APIs and raw materials from China or India?
Tripathi: See, generics and biosimilars represent about 90% of U.S. prescriptions, and FDA said in 2025 about 70% plus of generic drugs were manufactured outside, and only 9% of the active pharmaceutical ingredients (API) were in the U.S. So that's clearly a big exposure to non-US companies and regions.

India and China are certainly two big ones, but keep in mind that India also reported that China is about 74% of its API bulk drug and intermediate imports, so there is that dependency as well that is coming in. In all of this, let's not forget the impact chemical input inflation has on all of these regions as well as these ingredients.

PE: If tariffs drive up input costs for generic manufacturers, where does that cost land? Is there a realistic scenario where this accelerates shortages rather than resolving them?
Tripathi: Eventually someone has to pay the bill, right? So, either its the manufacturer absorbing some of the costs or the distributors absorbing the costs, or it is actually passed on to the consumers via the insurance companies, and like I mentioned before, especially for those generics, and low margins, this is the biggest risk that it then gets passed on directly to the consumer because the margins are already so thin for the manufacturers that for them to absorb anymore makes it economically not viable, and therefore that's the risk that I see.

The other part is a drug that is made domestically as a final step will still have dependencies outside. What it means is that you should not have a blanket reaction to tariffs, and you should not just do blanket stockpiling, now that there are tariffs. Because that's the immediate reaction that could come in, right? So, what this means is that you need to start thinking about where do you have shelf-life constraints? Where do you have cold chain needs?

The manufacturers have to apply tariffs and start thinking of better segmentation. Inventory is just increasing, inventory is not the strategy, targeted resilience is the strategy.

PE: What are the specific metrics to look for following the tariff announcement?
Tripathi: I mean first thing I would say is the metric not to watch for is press releases. Don't count the press releases, that does not mean anything. I would watch for five things.

First, actual U.S. facility investments that move beyond announcements. Second, are we seeing more investments in building APIs and key starting material capacity and not just finish that capacity.

Third, FDA approvals, site transfers, pre-check type activities that are showing that you are actually reducing the regulatory friction. Fourth, you need to start seeing supplier qualification, dual sourcing activity for critical products, so you're reducing it. Finally, you need to start monitoring shortages, discontinuations, allocation signals.