Manufacturing
U.S. President Trump once again threatened the pharmaceutical industry with tariffs, announcing plans to impose a 100% tariff on generic drugs manufactured outside the U.S. starting August 1, 2028, increasing to 200% the following year. The proposal has not yet been formally announced. Tinglong Dai, a professor at the Johns Hopkins Carey Business School, believes that the conditions that have long hindered domestic production of generic drugs remain largely unchanged, and this plan may only raise drug prices without facilitating factory reshoring. Data shows that over 90% of daily medications used by Americans are generic drugs, with more than 80% of their active pharmaceutical ingredients (APIs) sourced from overseas. A study involving Dai indicates that a 100% tariff on generic drug APIs could raise prices of related drugs by up to 30%.
For decades, Boston and Cambridge have been synonymous with the biotech industry, but now, as the Greater Boston area experiences layoffs and a wave of vacant labs, nontraditional cities like Lancaster County, Pennsylvania, Oklahoma City, and Las Vegas are accelerating the development of biotech ecosystems through their manufacturing foundations, government investments, and educational institutions, becoming emerging hubs worth watching.
After receiving a Complete Response Letter from the FDA, Aquestive Therapeutics quickly resolved issues because its manufacturing facility is located in the U.S., and plans to resubmit its application in the third quarter. This case sparks discussion on the speed advantage of domestic manufacturing, but cost, talent, and supply chain risks remain challenges.
Sun Pharmaceutical, India's largest drugmaker, acquired Organon for $11.75 billion, showcasing its global ambitions. However, experts believe that India still lags behind China in biopharmaceutical innovation, with insufficient infrastructure and capital being major obstacles.
After the U.S. Supreme Court rejected the Trump administration's tariffs in February, the White House announced in April the imposition of 100% tariffs on patented drugs and active ingredients under Section 232 of the Trade Expansion Act of 1962, subjecting the pharmaceutical industry to renewed supply chain and cost pressures.
The strikes by the US and Israel on Iran have left the Strait of Hormuz blockaded, affecting approximately 10% of global pharmaceutical shipments, with time-sensitive drugs impacted at a rate of 20%. Pharmaceutical companies are forced to adjust their supply chains, and experts warn that developing countries will be hit harder, urging the industry to enhance cooperation and geographic diversification.
Gilead Sciences' HIV prevention drug Yeztugo (lenacapavir) has received FDA approval, demonstrating 100% efficacy in clinical trials. Despite obstacles such as funding cuts and cultural stigma, the company is advancing large-scale distribution through a global partner network, aiming to reach 2 million people over the next three years.