Pharmaceutical Industry Invests Heavily in US Manufacturing Amid Onshoring Boom

Major pharmaceutical companies have pledged over $370 billion in investments for US projects over the next five years, according to a recent market trend report by DPR Construction. This surge in domestic investment comes as the industry responds to trade policies and regulatory initiatives aimed at boosting US pharmaceutical manufacturing and strengthening the supply chain.

Big Pharma Leads the Charge with Multibillion-Dollar Commitments

Johnson & Johnson tops the list of investors with a $55 billion commitment, followed closely by other industry giants. Roche and Genentech, AstraZeneca, Bristol Myers Squibb, Gilead Sciences, Takeda, Eli Lilly, Novartis, and Sanofi have each promised between $20 billion and $50 billion in US investments. These funds are earmarked for various purposes, including research and development, mergers and acquisitions, partnerships, and manufacturing expansions.

Smaller pharmaceutical companies and biosimilar specialists are also contributing to the trend. Moderna, for instance, has announced a $140 million investment to establish end-to-end mRNA production capabilities in the US. Meanwhile, Regeneron is allocating $2 billion of its total $7 billion US investment to convert a former magazine plant in Saratoga Springs, New York, into a drug production facility.

Regulatory Environment Supports Domestic Manufacturing Growth

The pharmaceutical industry's investment surge aligns with recent government initiatives designed to streamline regulatory processes and promote domestic production of critical medicines. The FDA has introduced two key programs to facilitate this shift:

1. FDA PreCheck: Launched in August, this program aims to improve early engagement between the FDA and the industry during facility construction, making it easier for new manufacturing plants to become operational in the US.

2. Generic Drug Priority Review Pilot: Unveiled in October, this initiative accelerates approval review times for generic drugmakers that test and manufacture their products in the US, with a focus on those using domestic sources for active pharmaceutical ingredients (APIs).

These efforts are complemented by presidential executive orders aimed at establishing a strategic reserve of APIs and strengthening the American pharmaceutical supply chain.

Geographic Distribution and Market Trends

While the East Coast remains the primary region for pharmaceutical investments, states like Indiana, Ohio, Kentucky, Virginia, and Texas are emerging as popular locations for industry projects. The DPR report also notes increasing opportunities in the western United States.

Despite the manufacturing boom, the broader R&D landscape faces challenges. Funding proposals for 2026 show a downward trend for key research institutions such as the NIH, CDC, and NSF. Additionally, real estate oversupply and limited inventory uptake in major US R&D hubs are dampening the life sciences R&D construction market.

However, positive signs are emerging in the form of novel drug approvals, which are beginning to align with previous years' rates. The industry is also benefiting from new technologies like artificial intelligence, lower interest rates, and government investment incentives, all of which are driving optimism in the sector.