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President Donald Trump signed an executive order Monday directing the Food and Drug Administration to accelerate approvals for domestic pharmaceutical manufacturing facilities as his administration prepares to announce new tariffs on imported medicines within two weeks.
What Happened: The executive order aims to streamline the drug manufacturing approval process by eliminating unnecessary requirements and reducing the time needed to approve new U.S. production sites.
According to the White House, building pharmaceutical manufacturing capacity currently takes “five to 10 years,” which it called “unacceptable from a national-security standpoint.”
“We don’t want to be buying our pharmaceuticals from other countries because if we’re in a war, we’re in a problem, we want to be able to make our own,” Trump said in a White House fact sheet.
Why It Matters: The executive order comes as U.S. pharmaceutical manufacturing has significantly declined over decades, with most active drug ingredients now produced in China and other countries. According to EY analysis, reported by Reuters, the U.S. imported $203 billion in pharmaceutical products in 2023, with 73% coming from Europe, primarily Ireland, Germany and Switzerland.
For investors, this points to broader shifts in the pharmaceutical sector, with companies such as Eli Lilly and Co. (NYSE:LLY), Johnson & Johnson (NYSE:JNJ), and AbbVie Inc. (NYSE:ABBV) already unveiling new domestic manufacturing plans in reaction to the looming tariff threats.
The pending tariffs could significantly impact generic drug makers, which provide 90% of U.S. prescriptions, possibly worsening existing shortages. There are already over 250 drug shortages nationwide, down from 323 in early 2024 but still concerning for healthcare stakeholders.
Mark Cuban, whose Cost Plus Drugs company sells medications at substantial discounts, warned the tariffs could force price increases on many drugs: “If we have a high tariff on drugs coming from India, we won’t have a choice but to pass those costs on to consumers.”
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
Image Via Shutterstock
