Editor’s (re)View: What J&J’s $2B US manufacturing investment says about Trump’s tariff-driven onshoring strategy

Since the start of his second term, President Trump has put pressure on drugmakers threatening to slap exorbitant tariffs on pharmaceuticals to incentivize them to move their manufacturing operations back to the U.S. Over the past six months, Big Pharma has responded to Trump’s threats by pledging billions of dollars to expand domestic production. But would they have invested anyway without the threat of pharma-specific tariffs?

Commercial real estate and investment management company JLL noted recently that 15 major pharma companies have announced more than $270 billion in U.S. manufacturing and R&D investments planned over the next five to 10 years.

However, as DCAT editorial director Patricia Van Arnum observed in a Thursday roundup of announcements this year: “Thus far in 2025, many of the large bio/pharmaceutical companies have announced multi-billion, multi-year capital investments in the U.S. as part of already planned investments.”

In March, Johnson & Johnson grabbed headlines with its announcement that it plans to spend more than $55 billion on U.S. manufacturing, research and development, and technology over the next four years. J&J’s media campaign on Thursday continued when it announced a $2 billion commitment over 10 years to establish a dedicated facility at contract manufacturer Fujifilm Biotechnologies’ new biomanufacturing site in Holly Springs, North Carolina.  

In its Thursday press release, J&J said the $2 billion investment in the 160,000-square-foot production plant in Holly Springs supports the company’s plans to manufacture “the vast majority” of advanced medicines domestically. However, what J&J’s announcement didn’t say was that back in 2023 it committed to a large-scale manufacturing suite as the first tenant at Fujifilm’s Holly Springs site.

The Fujifilm Biotechnologies site, which is five years and $3.2 billion in the making, will have its grand opening on Sept. 24 and is evidence that drugmakers and CDMOs were already ramping up their U.S. manufacturing capabilities prior to Trump’s threatened pharma-specific tariffs. Since 2018, the number of biomanufacturing facilities in the country has increased more than 50%, according to the Pharmaceutical Research and Manufacturers of America (PhRMA).

The question remains: as a policy goal, is the Trump administration’s tariff-driven onshoring effort succeeding? On the surface, it appears to be with Big Pharma announcing plans to pump billions of dollars into their domestic operations. However, in the case of J&J, the drugmaker already has more manufacturing facilities in the U.S. than in any other country, CEO Joaquin Duato claimed in Thursday’s announcement.

Still, investments in America’s pharma manufacturing infrastructure are increasing, according to global consulting firm McKinsey & Company. McKinsey’s data show that total capital expenditure (CAPEX) announcements 2022-2024 were about evenly split between the U.S. (24) and European Union (26), but that has changed significantly in 2025.

“Companies are increasingly investing in the U.S. and investments in Europe have scaled back,” CNBC reporter Angelica Peebles said in a live TV segment from Fujifilm’s Holly Springs site on Thursday. “The U.S. does have a really big game of catch-up to play. We are behind Europe. Almost half of our injectable drug products that are sold in the U.S. come from Europe — they at least originate there, and only 17% originate in the U.S.”

On Thursday, the Trump administration and European Union in a joint statement said their trade agreement announced last month would cap tariffs on branded pharmaceuticals at 15% exported to the U.S., and exempt generic drugs. 

While tariffs may provide a strong incentive for increasing U.S. manufacturing of brand name drugs, it’s a different story for generics which account for more than 90% of prescriptions in this country. As Brookings Institution senior fellow Marta Wosińska has previously stated, if the Trump administration wants to onshore generic drug production, it “will need to deploy tools other than tariffs.”