Supply chain resilience has dominated pharmaceutical industry conversation for the better part of six years. What began with pandemic-era shortages has been compounded by geopolitical tensions, tariff uncertainty, and Section 232 investigations examining whether foreign pharmaceutical dependency poses a national security risk. The will to onshore production is widespread, but the economic landscape tells a more nuanced story than simply “bringing it all home.”
CDMOs are seeing upticks in enquiries from sponsors evaluating domestic options, but enquiries do not equal signed contracts. US-based contract manufacturing is significantly more expensive than offshore alternatives, and building compliant production capacity takes years. Sponsors want to onshore but hesitate when comparing domestic options to established facilities in India or China.
The offshore advantages behind that hesitation were built over decades. India and China offer economies of scale, specialised workforces, upstream integration with raw materials, and favourable government policies. Critically, pharmaceuticals face constraints that other industries do not. Unlike automotive or consumer electronics, where tariff walls can effectively block foreign competition, medicines cannot be tariffed into unavailability without direct consequences for patient access and affordability. Global cooperation in pharmaceutical supply chains will remain a feature of this industry regardless of where policy moves next.
CDMOs are seeing upticks in enquiries from sponsors evaluating domestic options
Blanket onshoring of active pharmaceutical ingredient (API) manufacturing is not a viable strategy for the broad commercial portfolio. In practice, supply chain resilience comes from treating global sourcing as a strategic capability: qualifying diverse suppliers across multiple geographies, building redundancy before disruptions occur, and recognising that two suppliers sharing the same upstream raw material source are not mistaken for true diversification.
The targeted onshoring of critical, national-security-priority APIs is a different matter. Efforts such as EQUIP-A-Pharma and Defense Production Act investments are making real progress on essential medicines with documented supply vulnerabilities. These initiatives are targeted interventions addressing specific risks; they are not a model for restructuring the entire pharmaceutical supply chain.
Where domestic CDMO investment delivers the clearest value is at the finished dose manufacturing stage, closest to the patient and closest to where supply disruption has the most immediate consequences. Onshoring drug product manufacturing provides regulatory alignment under FDA oversight, supply chain visibility, and faster delivery to end markets.
The type of capacity being built matters as much as the decision to build it. The pandemic-era CDMO expansion in biologics and mRNA is a cautionary tale — facilities built on crisis-driven demand projections were left underutilised when demand was normalised.
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With early-stage biopharma funding under pressure and capital concentrating in later-stage assets, the future pipeline of products that would fill new domestic capacity is not as deep as the onshoring rhetoric implies. CDMOs making the more defensible bet are investing in therapeutic segments with steady demand and clear growth trajectories. Women’s health, where pharmaceutical spending is projected to grow 8-10% annually, and dosage forms with genuine domestic supply gaps, such as suppositories, semi-solids, and orally disintegrating tablets, represent the kind of durable market signals worth building around.
The reality is that onshoring will not progress at a uniform pace. For generics and low-margin products with longstanding suppliers, where pricing, quality agreements, and regulatory filings are already established, there may be little economic reason to upend those relationships based on shifting policy signals. We often see these kinds of products discontinued rather than relocated when profitability is impacted.
The companies and CDMOs that navigate these economics and dynamics well will be the ones that resist the pressure to chase every geopolitical headline. Instead, they will invest where the market fundamentals hold up over time: resilient global sourcing upstream, and targeted domestic finished dose manufacturing where it serves patients and supply chain stability.
This article was featured in the May 2026 issue of Cleanroom Technology. To read the digital issue, click here
