How Trump’s reshoring EO affects plans to build or expand a domestic drug manufacturing facility

Feasibility study & U.S. market analysis

• Analyze domestic market demand (including historical shortage and single supplier issues), reimbursement models, and payer strategy. 
• Consider product life cycle management (e.g., clinical development v. already approved, innovator v. generic) and IP strategy. 
• Consider strategic partners (e.g., existing CMOs, foreign manufacturers looking to expand U.S. footprint) and key service providers (e.g., testing laboratories). 
• Assess proposed supply chains for product components, including whether there are U.S. sources for components (active ingredients, inactive ingredients, containers, packaging, etc.) or if foreign suppliers would need to be leveraged. 

U.S. site selection & acquisition

• Consider geography and proximity to life sciences hubs (Massachusetts, North Carolina, California, etc.), particularly for advanced therapies or products that will require complex manufacturing processes. Assess proximity to academic centers, skilled labor, logistics hubs (airports, ports), and utilities. The importance of these factors may depend on the type of product being manufactured – for example, “simpler” products such as immediate release tablets and capsules may not require the same level of expertise and skilled workforce as more "cutting edge” products such as cell and gene therapies. 
• Evaluate potential building options. Weigh the cost of retrofitting or brownfielding an existing building, even if not initially intended for drug manufacturing, versus the cost of greenfielding an entirely new drug manufacturing facility. Consider the increased cost of construction materials due to current non-pharmaceutical tariffs in making these evaluations. And, consider the amount of space and capacity needed for the anticipated production scale (small production suite in a larger multi-purpose building up to multi-building manufacturing campus) and storage capacity. 
• Consider federal, state, and local permitting process zoning regulations, and incentives (e.g., tax credits). In particular, monitor for new programs initiated pursuant to the Reshoring Manufacturing EO.

Conceptual design & budgeting

• Consider modular vs. stick-built construction. 
• Forecast CapEx/OpEx including material costs (and tariff impacts), labor costs, real estate, compliance systems, and utility rates (which vary by state). 

Early regulatory planning & engagement

• Under the Reshoring Manufacturing EO, the federal government will coordinate and help streamline permitting and approval processes. Consider designating a dedicated team to work closely with all relevant agencies, including the U.S. Food and Drug Administration (FDA), EPA, and the Office of Management and Budget to fully leverage the potential efficiencies to be gained from the EO.

Detailed facility design & construction; Equipment installation

• Identify and engage design and construction partners early in the process who have experience in pharmaceutical facility design and will help ensure the facility is fit-for purpose. Ensure construction and design partners are familiar with pharmaceutical regulatory authority requirements (FDA, EMA, MHRA) and recognized third-party references (ICH, ISPE, ASHRAE, PDA, USP) and other relevant for facility requirements. •Implement Good Engineering Practices (GEP) and Construction Quality Assurance (CQA) plans. 
• Ensure compliance with OSHA and local/state building codes. •Evaluate equipment needs. Consider automated technologies and equipment that reduces reliance on manual labor (e.g., automated isolator filling systems), especially when considering potential long-term competition with foreign sites that have reduced labor costs. Account for potentially extended equipment delivery lead times, particularly if equipment is manufactured outside of the U.S.  

Equipment installation; Validation & qualification of the equipment, facility, and manufacturing process 

• Develop a Validation Master Plan (VMP). 
• Conduct installation qualification, operational qualification, and performance qualification on systems and equipment. 
• Validate utilities - WFI, purified water, clean steam, HVAC, compressed air – in accordance with USP standards. Account for adequate time to perform validation activities. 
• Conduct process validation to ensure the facility, equipment, and process can consistently manufacture safe and high-quality drug products that meet required specifications and standards. This usually requires manufacturing a number of commercial-scale batches and monitoring all critical processes and quality attributes as a “practice run” to ensure that the process can consistently manufacture product correctly. 

Hiring, staffing & CGMP ramp up

• Ensure that a strong quality system is put in place to ensure compliance with current good manufacturing practice (CGMP) expectations. 
• Source experienced talent from experienced U. S. pharmaceutical clusters. 
• Identify an entry-level pipeline from the community. Evaluate if there are available incentives to be leveraged, such as workforce development grants. 
• Conduct training for all personnel on relevant procedures, processes, and CGMP requirements. 

FDA submission & pre-approval inspection

• Submit an application to FDA (new application or supplement) referencing your U.S. site. 
• Prepare for FDA Pre-Approval Inspection (PAI) with full CGMP readiness. 
• Monitor updates to FDA’s approach to PAIs as the EO directs FDA to make PAI framework more “prompt and efficient,” and "limited to what is necessary to ensure compliance with federal law.” 
• Respond to any Form 483 observations with CAPAs within FDA timelines. 

Commercial launch, continued process verification, and operational excellence

• Launch commercial manufacturing. Address manufacturing issues when they occur (initiating deviations and out-of-specifications, conducting thorough quality investigations, implementing corrective actions) and identify ways to effectively prevent recurrence to avoid quality issues and waste (e.g., batch rejections, product recalls). 
• Monitor key performance indicators (KPI) such as batch yield, overall equipment effectiveness, right first time. Apply operational excellence principles to manufacturing operations (e.g., Six Sigma) for continuous improvement. 

The Reshoring Manufacturing EO’s agency-level mandates reflect a whole-of-government approach to streamlining domestic drug manufacturing. Given the increased scrutiny of foreign contract manufacturing organizations under current and pending legislation – such as the Section 232 pharmaceutical investigation, the formerly-proposed BIOSECURE Act, and the DOJ Data Transfer rule – the Reshoring Manufacturing EO offers companies additional opportunities to shift their supply chains to mitigate potential fallout from these government actions.

Companies planning to build or expand U.S. pharmaceutical facilities should closely monitor forthcoming agency guidance and prepare to engage early with FDA and other agencies to effectively leverage the efficiencies intended by this EO and the administration’s broader priorities. If you have questions about how this Executive Order may affect your operations, please contact the authors of this publication or your regular Hogan Lovells contact.

Authored by Sally Gu, Chris Middendorf, Mike Druckman, and Ashley Grey.