Can the US End Its Reliance on Offshore Drug Manufacturing?
On September 30, stakeholders will discuss how to reduce the American reliance on overseas pharmaceutical imports.
Now more than ever, there is a growing awareness of the fragility of global supply chains. For pharmaceuticals production – an industry that has become increasingly globalized over the past few decades – that may be a problem.
Currently, in the United States, approximately 53% of branded drug products and 69% of generic drugs are manufactured overseas. Additionally, just 9% of active pharmaceutical ingredient (API) manufacturers have operations in the US, compared to 22% in China and 44% in India.
Earlier this year, President Donald Trump issued an executive order – EO 14293: “Regulatory Relief to Promote Domestic Production of Critical Medicines” – that sets out a new policy intended to streamline regulation and strengthen the pharmaceutical manufacturing industry in the United States.
On September 30, the US Food and Drug Administration (FDA) will be conducting a public meeting to discuss a new FDA proposal, “FDA PreCheck,” which aims to accelerate the establishment of domestic drug manufacturing operations and facilitate the onshoring of manufacturing in a swift and sustainable way.
Carol Houts, chief strategy and commercial officer at the laboratory and cleanroom manufacturing company Germfree Laboratories, believes that this is not a new challenge – it is an obstacle that has already been tackled by pharmaceutical companies who have made the move towards decentralized manufacturing. Using modular cleanrooms, these manufacturers can more easily scale up their production in a flexible environment that brings production closer to the point of care.
Ahead of the public meeting, Technology Networks spoke with Houts to learn more about the push for onshoring pharmaceutical manufacturing and what a future domestic drug production industry might look like.
Later this month, the FDA will host a public meeting to discuss the onshoring of drug manufacturing. Can you speak to why there is so much interest in shifting to domestic manufacturing?
Carol Houts (CH):
The push toward domestic manufacturing is rooted in lessons from recent crises. The pandemic, geopolitical instability and transportation disruptions made clear how fragile global supply chains are for essential medicines.
Onshoring brings greater resilience, allowing us to respond more quickly to shortages, improve quality oversight and safeguard national security. It also creates opportunities to strengthen our innovation ecosystem by bringing manufacturers, regulators and healthcare providers closer together, while fueling economic development here in the US.
AB:
What are the practical challenges expected with this shift from offshore to onshore manufacturing?
CH:
The challenges are real. Building new facilities in the US takes time and requires significant upfront investment.
We also face workforce shortages, particularly in highly specialized areas like aseptic operations and advanced automation. Supply chains for raw materials and consumables need to grow alongside new facilities; otherwise, we risk moving the bottleneck, rather than eliminating it.
Finally, costs are higher in the US, which means efficiency gains through continuous processing, digital tools and better regulatory pathways are essential to making onshore manufacturing sustainable.
The shift to onshore manufacturing is about more than just moving facilities; it’s about redesigning the entire system. By combining modular infrastructure, advanced technologies and digital connectivity, we can build a network that’s faster, safer and closer to patients. If we align incentives, skills and policy with this vision, the US has the opportunity to lead globally in how medicines are manufactured and delivered.
AB:
What parallels are there with the interest in decentralized manufacturing?
CH:
Both onshoring and decentralized manufacturing come from the same motivation: resilience. Instead of relying on a few large sites halfway across the world, we’re looking at ways to spread capacity closer to patients and healthcare systems.
Modular cleanrooms make this possible. They can be built off-site, delivered quickly and scaled up or down as demand shifts. Their standardization ensures compliance, while their flexibility allows them to be tailored to new therapies. In short, modular platforms give us the speed and adaptability needed to support both onshore and decentralized models.
AB:
What other advances could help US drug manufacturing rise to this challenge?
CH:
The biggest opportunities lie in technology and policy. Advances like continuous manufacturing, isolator-based processing, robotics and digital quality systems can dramatically improve efficiency and reliability.
At the same time, we need public–private partnerships to finance infrastructure and incentives that reward availability and resilience, not just price. Workforce development is equally critical; training people to operate, maintain and innovate in these new environments will determine how successful we are in the long run.
AB:
Looking to the future, what do you think a long-term shift toward US-based pharma production would look like?
CH:
I see the future as a hybrid model. Large US hubs will still produce the high-volume drugs we depend on, but smaller, modular facilities will take on the critical therapies, point-of-care treatments and urgent needs, like drug shortages.
These facilities will be digitally connected, with real-time monitoring and release built in, and designed so they can scale or move as demand shifts. Over time, measures of resilience – things like readiness and availability –will matter just as much as price, and that will fundamentally change how we think about the pharmaceutical supply chain.
