Just one in seven pharmaceutical companies could shift production to the United States within three months should US tariffs on imported drugs become too onerous, new research from consultancy Sia has found.
The research, which is based on interviews carried out in June and July with seven senior executives at leading pharmaceutical firms and contract manufacturers, shows none of the organisations feel fully prepared for the potential disruptions that tariffs could cause.
The majority of the organisations surveyed, based between Ireland and the US, said they are still in the early phases of scenario planning and are hesitant to commit to major changes while trade negotiations remain unresolved.
The US government is reportedly considering tariffs of up to 200 per cent on pharmaceutical products from the EU, China and India – a move that could reshape global drug supply chains and significantly increase costs.
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The research found the proposed tariffs would likely result in immediate cost increases, potential drug shortages and long-term consequences for innovation.
Higher operational costs “may reduce investment” in research and development, “slow the delivery” of new treatments and “force price increases” that would ultimately affect consumers, according to the findings.
Ireland’s role as a strategic export hub is also emphasised in the research. In May alone, the value of pharmaceutical and medicinal product exports from Ireland rose by nearly three-quarters to €13.7 billion compared to the same month last year.
The research also shows growing momentum behind US-based manufacturing. More than $170 billion in investment has been announced or redirected toward domestic pharmaceutical capacity over the next five years, with 57 per cent of organisations planning to increase their US footprint.
“This shift reflects a broader trend toward regionalisation of supply chains and reduced reliance on geopolitically sensitive markets,” according to the report.
Research from 2022 showed US pharma manufacturing facilities were operating at around 50 per cent capacity.
Contract development and manufacturing organisations are operating around 55 per cent capacity, suggesting a “near-term opportunity for expansion without the need for major infrastructure spend”.
Meanwhile, staffing and talent development “still present potential challenges”.
However, “challenges remain” in terms of workforce availability and production agility. The complexity and regulatory requirements of pharmaceutical production mean that relocating manufacturing operations is a “slow and resource-intensive process”.
With US patients already paying more than $12,000 per year on average for healthcare – the highest rate globally – the industry is bracing for additional economic pressure.
Niall Cunneen, associate partner Ireland and Britain at Sia, said the pharmaceutical industry has “long benefited” from highly optimised global supply chains, but the research shows “these very strengths have become vulnerabilities” in the face of rapidly shifting trade policy.
“The potential Trump tariffs represent a genuine stress test – not just of operational flexibility, but of long-term strategic resilience,” he said.
Mr Cunneen said many pharma companies are still waiting for regulatory clarity before making major decisions.
“That hesitation is understandable, but risky,” he said. “In today’s environment, waiting too long to act could mean losing access, margin or momentum.”
“What we’re seeing is a growing pivot toward domestic investment, with more than $170 billion of US-based capacity already committed over the next five years.
