President Donald Trump signed an executive order aimed at incentivizing prescription drug manufacturing within the United States. The order seeks to streamline the process for pharmaceutical companies to establish new production sites domestically, ahead of potential tariffs on imported medicines. This initiative reflects a national security focus on reducing reliance on foreign drug supply chains.
The executive order directs the Food and Drug Administration (FDA) to reduce the time required for approving U.S. manufacturing plants by eliminating unnecessary requirements and streamlining reviews. It also mandates increased inspection fees for foreign manufacturing plants and improved enforcement of active-ingredient source reporting by overseas producers. The White House estimates that building new pharmaceutical manufacturing capacity can currently take five to ten years.
This policy move could create a more favorable environment for companies like Johnson & Johnson, which has already committed to significant investments in U.S. manufacturing. While the order aims to reshore drug production, it could also elevate production costs and drug prices, raising affordability concerns. The administration plans to announce pharmaceutical-specific tariffs within the next two weeks.
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