President Trump signs Executive Order to ramp up US prescription drug manufacturing

The Order directs the FDA to increase fees for and inspections of foreign manufacturing plants.

US President Trump signed an executive order on May 5 to rebuild US prescription drug manufacturing, with a focus on reducing reliance on foreign-made medicines, directing to accelerate facilities designed to make prescription drugs, active pharmaceutical ingredients (APIs), and other necessary raw materials.

The order is seen as a step towards reducing US' dependence on foreign medicines and step up domestic production of key pharma ingredients.

The White House cited estimates that suggest new pharma manufacturing capacity could take 'as long as five to ten years', calling it 'unacceptable' for national security. The Executive Order aims to reduce the barriers to raise these facilities on American soil. "This Order will speed up timelines for building domestic pharmaceutical manufacturing site by reducing regulatory barriers to construction," a White House Fact Sheet said.

This order follows up on President Trump’s plan to 're-shore' production of essential medicines, cutting down reliance on foreign producers. “As we invest in the future, we will permanently bring our medical supply chains back home. We will produce our medical supplies, pharmaceuticals, and treatments right here in the United States,” the Fact Sheet quoted President Trump. The order is aimed at speeding up timelines to build domestic pharmaceutical manufacturing site by cutting down on barriers to construction.

“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,” the White House statement quoted Trump.

While the White House Fact Sheet said that 'critical barriers and gaps' still exist in setting up of an affordable, domestic pharma supply chain, few other recent assessments disagree. A recent report by Morningstar said that as much as two-thirds of drugs sold in America in value terms is made locally. It cited an analysis conducted on the behalf of Big Pharma that said, "America exports about $100 billion in prescription drugs to the rest of the world, while our imports amount to about $200 billion." For a $30 trillion economy, this amount may not be disproportionately large, it pointed out.

The development comes ahead of Trump’s planned tariffs on pharma imported into America, and could weigh on companies such as Sun Pharma, Dr Reddy's, Aurobindo Pharma, Lupin and Cipla, among others, which are major exporters to the US market. News reports said in 2023, India exported medicines worth $9.08 billion to the US, making it the third-largest source for US pharma retail.