On May 12, 2025, President Trump signed Executive Order (EO) 14297, “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients,” mandating that U.S. drug prices align with the lowest prices in OECD. The policy aims to end “global freeloading” by pressuring manufacturers to lower domestic prices or face penalties, including tariff threats, FDA approval revocations, and importation allowances. This EO has triggered a seismic shift in the pharmaceutical industry: $100+ billion in U.S. API manufacturing investments and 12,000+ new jobs have been announced as companies pivot to avoid MFN-driven margin squeezes abroad and leverage tax incentives for domestic production. By tying U.S. prices to international benchmarks while threatening tariffs on imports, the White House has made reshoring API production both economically viable and politically advantageous. Currently, the baseline of U.S. API Manufacturing Pre-EO looks like this:

·       ~70% of U.S. small-molecule APIs were imported, primarily from India and China;

·       According to U.S. Bureau of Labor Statistics  NAICS 325400 Pharmaceutical and Medicine Manufacturing - 346,000 pharma manufacturing jobs in 2023, with projections to 408,000 by 2033. However, if only API manufacturing reshoring is adding 12,000+ new jobs there is a fair chance the trajectory of growth will be higher. It is important to mention that each pharma job creates ~2-3 indirect roles (e.g., packaging, logistics, engineering) – industries like Bioprocess & continuous-mfg. equipment, Pharma packaging & serialization, cold-chain & 3PL logistics will be growing along the trajectory;

·       According to U.S. Bureau of Economic Analysis Pharmaceutical & medicine manufacturing added $216 B in value-added GDP in 2024, up 4 % YOY. Given the amount pledged by companies as investment in CAPEX there is a reason to expect a double digit increase in next 5 years.

The sheer speed and scale of announcements that followed after EOs underscore an obvious thing: MFN pricing has instantly turned “Made-in-America” from a talking point into the safest way to protect margins and market access. Here are evidences of relocation directly impacting API manufacturing industry:

Corporate Moves Since the Order (Evidence of Relocation) specifically in API manufacturing:

Big-Pharma U.S. CAPEX announcements having future effect on API manufacturing reshoring

After the MFN drug-pricing Executive Order, three top-20 drugmakers have publicly committed over $31 billion in fresh or expanded U.S. capital expenditure, aiming to add thousands of high-skilled manufacturing roles and accelerating API onshoring across both small-molecule and biologics pipelines.

Along with a growing demand for complex APIs, especially in the areas of GLP-1 receptor agonists, antibody-drug conjugates (ADCs) and high-potency API even modest CAGRs from today’s API manufacturing baseline translates into multi-billion-dollar additional API volume each year. All of them highly potent, moisture-/oxygen-sensitive and requiring containment category 3-5 suites. If every announced facility commissions on schedule, the U.S. share of its own API consumption could climb from ~30 % to at least 50%.

Apart from the move to protect margins and market access, economics of API pharmaceutical manufacturing onshoring are supported by:

Key Drivers Behind Corporate Moves

·       Tariff Threats: The administration’s proposed 25% tariffs on imported APIs create a "build local or pay penalties" equitation.

·       Orange swan factor: The EO’s aggressive tone has made reshoring a strategic need to avoid regulatory retaliation.

·       Leveraging IRA Tax Credits: Firms are pairing reshoring with Inflation Reduction Act (IRA) incentives, such as the 10% domestic production tax credit, to offset higher U.S. labor costs.

·       State Incentives: NC, IN, and TX compete with tax breaks for API plants

·       Eli Lilly, Novartis, and Thermo Fisher tie every new U.S. API announcement to continuous-flow, modular, or plug-and-play language –  modular-flow cap-ex (-30 % cheaper than legacy batch) and on-site PAT (cuts QC release by days), and the U.S. cost gap narrows to single digits even before freight savings.

Ecosystem spill-over to watch

Here are industries most likely to gain net revenue, contract volume or capital inflows from the four 2025 Executive Orders—shown across the drug-supply value chain.

Taken together, these ten segments encompass roughly US $ 1 trillion in baseline value, with a plausible US $ 90-100 billion upside over the next five years—benefits that cascade from chemical inputs to patient-level dispensing and every logistics, tech and services layer in between.