The news: President Trump’s new executive order instructs health regulators to make it easier for pharmaceutical companies to manufacture their medicines in the US.

Digging into the details: The order directs federal health agencies to scale back on bureaucratic red tape while disincentivizing foreign pharmaceutical production.

• New manufacturing plants typically take around 5 to 10 years to build, which the White House said is “unacceptable from a national security standpoint.”
• The order calls for the FDA to eliminate certain requirements to approve domestic pharma manufacturing plants that are “duplicative and unnecessary.”
• It directs the FDA to increase fees for and inspections of foreign manufacturing plants. Related, FDA Commissioner Marty Makary said the FDA will start conducting surprise inspections of overseas sites as opposed to regular scheduled visits.
• The order also instructs the Environmental Protection Agency to accelerate the construction of facilities that manufacture prescription drugs, active pharmaceutical ingredients, and other raw materials.

Why it matters: Pharma companies are grappling with how much production capability to shift to the US as pharma-specific tariffs are expected to be announced in the next few weeks.

• Several drugmakers have recently pledged billions to US facility builds and expansions.
• But others, like Pfizer, say the uncertainty as a result of soon-to-come pharma tariffs is why it’s holding off on US manufacturing investments.

Key stat: The US imported $203 billion in pharmaceutical products in 2023, and nearly three-quarters (73%) came from Europe, according to a recent EY analysis shared with Reuters.

The final word: Pharma companies that are pouring money into reshoring and building US manufacturing may see their efforts pay off sooner than expected because of this executive order. At the same time, it will still be an expensive, years-long process—which means drugmakers that haven’t yet committed to new US manufacturing and R&D ought to wait for the precise tariff rate on the sector before investing in more domestic infrastructure.

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