Tariffs Reshape Global Investment Landscape

The U.S. government's tariff policy on imported pharmaceuticals is reshaping the pharmaceutical industry's investment landscape. According to CRB's "Horizons: Life Sciences 2025" report, 5 out of 10 major pharmaceutical companies are accelerating investments in U.S. facilities.

While 29% of all pharmaceutical companies are accelerating U.S. investments, this ratio rises to 50% when focused on large companies. In contrast, 73% of pharmaceutical startups reported no changes to their investment plans. The most interesting finding involves mid-size pharmaceutical companies. These firms have been relatively less impacted despite U.S. policy changes and R&D capacity reductions.

Peter Walters of CRB explained at the 2025 ISPE Annual Meeting that "large companies are repackaging already-planned growth strategies as U.S. onshoring," adding that "these are not purely new projects responding to tariffs."

cGMP Manufacturing Facilities Take Priority Over R&D

The direction of investment is clear. In North America, expanding cGMP manufacturing facilities has emerged as the top priority. Research and development (R&D) has been pushed to a relatively lower priority.

Globally, the highest growth rates are expected in Asia, particularly China, with Europe following. While only 14% of companies increased investments outside the U.S. due to tariff impacts, manufacturers are reassessing "where to produce what."

58% of companies reported no tariff-related investment changes, but this ratio rose to 73% among startups. Small companies face the burden of investing in the world's most expensive R&D facilities while "having no room to wait."

Shadow of U.S. R&D Budget Cuts

Budget cuts to the National Institutes of Health (NIH) and workforce reductions at the FDA are raising additional industry concerns. The approval process for new drug applications (NDAs) and investigational new drug applications (INDs) is likely to be delayed.

As FDA expertise diminishes, pharmaceutical companies and consulting firms must now provide internally the expertise previously offered by the FDA. Walters noted that "considering already-disbursed research funds, a slowdown in R&D funding flow is inevitable."

Five Drug Categories Drive Growth

Despite tariffs and budget cuts, the pharmaceutical industry's growth drivers remain strong. The CRB report identifies antibody-drug conjugates (ADCs), gene and cell therapies, small molecule compounds, and therapeutic proteins among five areas driving growth.

Notably, completely new therapies are not the only developments. Existing platforms like small molecule compounds and therapeutic proteins are being reinterpreted to expand their markets.

Industry Worker Satisfaction Remains High

The report examined not only industry outlook but also worker satisfaction. Despite changes and uncertainty, pharmaceutical industry workers' happiness levels remain positive. The relatively strong morale of the workforce supporting innovation and growth is encouraging.

Future Outlook [AI Analysis]

U.S. tariff policy has driven short-term investment in U.S. manufacturing facilities, but leaves the more complex long-term challenge of global supply chain reorganization. Large companies are adapting to policy changes by repackaging planned investments as "onshoring," but startups and small pharmaceutical companies are likely to face difficulties due to high investment cost burdens.

FDA workforce reductions and NIH budget cuts could delay the drug approval process, raising concerns about slowing innovation. However, increased R&D investment in Asia and Europe may partially offset this.

Ultimately, over the next 2-3 years, regional role differentiation is expected to become clearer. The U.S. is likely to position itself as a manufacturing hub, while Asia establishes itself as an integrated base combining both R&D and manufacturing.