Trump pushes tariff-driven reshoring, but Big Pharma and CDMOs embrace regionalization
Last week, President Donald Trump announced sweeping tariffs meant to bring manufacturing back to the U.S. However, long before Trump’s push for tariff-driven reshoring, large pharmaceutical companies and contract development and manufacturing organizations put in place strategies for regional redundancy and capacity distribution.
“Regionalization is a stronger theme than reshoring,” Leerink Partners analysts wrote in a recent note to investors. In Asia Pacific, Europe, and North America, they said “global pharma players are designing supply chains for local-for-local execution.”
Although Big Pharma companies such as Eli Lilly and Johnson & Johnson have grabbed headlines recently, with tens of billions of dollars of promised investments to reshore their respective manufacturing to the U.S., Leerink Partners analysts contend that the “more durable theme is global regionalization.”
Late last month, the analysts hosted two former leaders of large contract development and manufacturing organizations (CDMOs) in a panel discussion. The key opinion leaders (KOLs) said that large pharmaceutical companies and CDMOs “are building parallel infrastructure” across the globe “to mitigate geopolitical risk and ensure local-for-local delivery.”
Recent “tariffs and trade frictions” have “added urgency” to the move to regional redundancy and capacity distribution, but the KOLs said that major disruptions to cross-border medicine shipments during the COVID-19 pandemic helped to fuel the adoption of regionalization strategies.
The KOLs noted that “while the politics around tariffs and reshoring waxes and wanes, regional redundancy is increasingly baked into [long-term] capital planning,” according to Leerink Partners.
Big Pharma, CDMOs go local
Pfizer CEO Albert Bourla last month told the TD Cowen Annual Health Care Conference that if the Trump administration imposes tariffs on pharmaceuticals, Pfizer will transfer some of the company’s overseas manufacturing to its 13 U.S. sites.
“We will try to mitigate by transferring from manufacturing sites outside to manufacturing sites here — the things that can be transferred quickly,” Bourla said. “We don’t have to build the network.”
Novo Nordisk CEO Lars Jørgensen last month told reporters that he does not worry a lot about tariffs, noting that the Danish drugmaker has a global manufacturing network and “in a world with a lot of tariffs, we can redirect products in different ways so they become more localized and maybe fewer crossing borders.”
Recipharm, with 17 facilities in 10 countries, touts the fact that it has a global presence with local expertise. The CDMO operates development and manufacturing sites in France, Germany, India, Israel, Italy, Portugal, Spain, Sweden, the UK and the U.S. Its global presence is designed to “meet any local customer requirement” by coordinating projects between Recipharm’s international facilities “to meet local need in the best possible way.”
Merck KGaA CEO Belén Garijo last month told analysts that her company, which provides CDMO services, has “localized” its supply chain over the years precisely “in anticipation of potential trade barriers and potential tariffs.”
Siegfried, a global CDMO with 13 sites across seven countries, sees its footprint in three continents — Asia, Europe, and North America — as a strategic advantage given the current macroeconomic and geopolitical conditions.
Chief Scientific Officer Stefan Randl told Pharma Manufacturing that Siegfried having multiple, reliable supply points — with “manufacturing sites spanning all the way from the U.S., across Europe, to Asia” — is critical for customers in the current geopolitical environment.
While the company is by and large based in Europe, Randl noted Siegfried’s “strong U.S. presence” including its acquisition last year of a CDMO site in Grafton, Wisconsin from Curia Global, which the company says strengthens its customer offering for drug substances “in terms of capabilities and geography.”
Fujifilm Diosynth Biotechnologies CEO Lars Petersen in a presentation last month at DCAT Week 2025 said that the CDMO is building identical large-scale production facilities in Europe and the U.S., designed to modularly and seamlessly integrate manufacturing regardless of location.
“Big Pharma companies sometimes shift priorities from one location to another one and I would expect to see a lot of that this year with a new [Trump] administration in this country, and new discussions going on about where they might want manufacturing,” Petersen told Pharma Manufacturing earlier this year.
When it comes to life science tools suppliers, Leerink Partners analysts in a recent report noted that companies in that sector have “limited risk” from U.S.-China tariffs and export restrictions “given largely localized or near-localized manufacturing.”
According to Leerink, the “vast majority” of manufacturing and/or final assembly for companies like Agilent Technologies, Bruker, Danaher, Thermo Fisher Scientific, and Waters is in Asian countries such as Malaysia and Singapore, Europe or locally in China “with the bulk of China product” for Agilent and Waters “made in China for China.”
