Major pharmaceutical companies including Eli Lilly, Pfizer, and Merck are ramping up manufacturing investments in the US to navigate the evolving trade tariffs and capitalise on domestic tax incentives. While this strategic shift supports supply chain resilience, it may also elevate production costs and drug prices—raising concerns around affordability as emerging markets pursue regulatory reforms to boost access to biosimilars and biologics, says GlobalData.
Adam Bradbury, Pharma Analyst at GlobalData, notes, “Eli Lilly plans to invest at least $27 billion in four new US manufacturing sites, focusing on active pharmaceutical ingredients (APIs) and injectables. Lilly’s CEO has commented that tax cuts passed during President Trump’s first term were ‘foundational’ to these domestic investments. Pfizer is also considering relocating overseas manufacturing to its US facilities, depending on the evolving tariff situation, while Merck recently opened a $1 billion plant in North Carolina to boost production of its HPV vaccine, Gardasil.”
GlobalData’s Emerging Market Outsourcing report reveals that this push for domestic production could lead to increased production costs and inflationary pressures on drug prices. With many Americans already facing rising consumer prices and unemployment, the potential for further price hikes raises significant concerns about healthcare accessibility.
However, BRICS nations are exploring barrier-free regulations for biosimilars and biologics, aiming to enhance access to affordable medicines across member states. This initiative could provide a counterbalance to the challenges posed by US tariffs, fostering healthy competition and reducing production costs.
Bradbury concludes, “By advancing regulatory harmonisation for biosimilars and biologics, BRICS nations are positioning themselves to offset the pressures created by US trade policies. This shift could accelerate the emergence of these markets as key players in global pharmaceutical manufacturing—delivering affordable, high-quality medicines while fostering greater supply chain resilience and competitive balance across the industry.”
The Emerging Market Outsourcing Report is a quarterly analysis of news and trends affecting contract manufacturing organisations in emerging pharma markets such as China, India, Latin America, the Middle East, and Eastern Europe. The report also lists the latest M&A and financing of CDMOs, expansions and investments in facilities, and manufacturing inspections.