Tariff Threats Reshape Pharmaceutical Manufacturing Landscape

In the wake of President Donald Trump's tariff threats against the pharmaceutical industry, a new survey by research group CRB reveals a stark divide in how companies are responding to these economic pressures. The 2025 Horizons Life Sciences Report, which surveyed over 400 biopharma executives, paints a picture of an industry grappling with uncertainty and adapting to a changing global trade environment.

Big Pharma Accelerates U.S. Investments

Large pharmaceutical companies are leading the charge in responding to tariff threats by ramping up their investments in U.S. manufacturing. The CRB report indicates that U.S.-based corporations with 10,000 or more employees are 35% more likely to be accelerating investments in the country compared to their smaller counterparts. Half of these large life sciences companies reported speeding up their U.S. investments in response to tariffs.

This trend is exemplified by recent pledges from industry giants:

• Pfizer announced a $70 billion investment
• Johnson & Johnson committed $55 billion
• Eli Lilly promised $27 billion

These substantial commitments underscore the financial muscle that Big Pharma can flex in response to economic challenges.

Smaller Biotechs Face Limited Options

In stark contrast to their larger counterparts, smaller biotechs and startups find themselves with fewer options to mitigate the impact of tariffs. The CRB survey revealed that 73% of startups had not changed their strategies in response to tariffs, largely due to their focus on product development and limited flexibility in manufacturing decisions.

John Stanford, managing partner at Prism Group, explained to BioSpace, "Smaller biotechs have fewer levers to pull, so instead they sort of just have to carry on and just hope that the situation doesn't get worse." Unlike larger companies with sophisticated logistics networks and cash reserves, smaller firms face the prospect of rising costs eating into their limited resources.

The report highlights a concerning trend for these smaller entities:

• 29% have slowed investments and decision-making
• 27% have placed their business plans on hold due to market uncertainty
• Only 12% of North American companies are accelerating capital plans

Broader Industry Impacts and Future Outlook

The pharmaceutical landscape is further complicated by other policy changes and economic factors. The CRB report noted a 370% expected increase in large negative effects from U.S. federal policy and staffing changes, such as widespread layoffs at the FDA, on new drug and biologic license applications.

Despite these challenges, the industry remains cautiously optimistic about growth:

• North American manufacturing is expected to see the third-largest growth over the next five years
• Asia and Europe are anticipated to lead in manufacturing growth

However, concerns loom large over proposed cuts to NIH funding, with 22% of executives reporting large negative impacts already, and 41% expecting future effects.

As the pharmaceutical industry navigates these turbulent waters, the divide between Big Pharma's ability to adapt and smaller biotechs' struggle to stay afloat becomes increasingly apparent. The coming years will likely see a reshaping of the manufacturing landscape, with significant implications for drug development, pricing, and availability in the United States and globally.