President Trump signed an Executive Order aimed at encouraging the domestic manufacturing of prescription drugs. The Order incentivizes pharmaceutical companies to establish production facilities in the U.S., as tariffs on imported medicines may soon be announced. This raises a new challenge for the Food and Drug Administration (FDA); it will need to improve its processes in order to meet potential increased domestic demand. The EO asks the FDA to reduce the time it takes to approve manufacturing plants in the U.S. by eliminating unnecessary requirements, streamlining reviews and collaborating with domestic drugmakers. 

According to the White House, it currently takes five to ten years to develop new pharmaceutical manufacturing capacity. To strengthen oversight, the Administration plans to raise inspection fees for foreign manufacturing plants and may publicly list non-compliant facilities. These policies seek to enforce stricter reporting of where active drug ingredients are used. 

Should the Administration move forward with tariffs on pharmaceuticals, data from the PwC’s US Tariff Industry Analysis shows that the total financial impact of tariff measures could increase from $0.5 billion a year to nearly $63 billion a year. This figure does not consider countermeasures that trading partners may impose or behavioral adjustments that companies may make, in reaction to US policy changes. 

In 2024, the U.S. imported $168 billion worth of finished and unfinished pharmaceutical products. Finished products include already manufactured medicines and medical devices, while unfinished products consist of raw materials used to create drugs and medical devices.  

Although the tariffs do not directly target research and development, their burden could impact funding in this area. 

AHPA extends our gratitude to Jenna Wilson, guest co-author of this article. 
Jenna is a graduate student in the School of Global Health Management and Informatics program
at the University of Central Florida.