Reshoring as Strategy: How Leen Kawas Views the Long-Term Pharmaceutical Manufacturing Revolution

The United States is experiencing a significant transformation in its pharmaceutical production landscape as manufacturers increasingly bring operations back to American soil. According to biotechnology leader Leen Kawas, this reshoring movement represents not merely a reaction to recent global disruptions but a fundamental strategic realignment with far-reaching implications for America’s healthcare infrastructure.

“The vulnerabilities within our pharmaceutical manufacturing and supply chains were starkly exposed during recent global disruptions,” explains Leen Kawas, Managing General Partner at Propel Bio Partners. “Reshoring pharmaceutical production isn’t just economically beneficial—it’s a matter of national security that ensures Americans have reliable access to essential medications.”

America’s dependence on foreign pharmaceutical manufacturing has grown dramatically since the 1980s. According to industry data from the Elangham Group, approximately 72% of active pharmaceutical ingredient (API) manufacturers supplying the U.S. market are overseas, with China and India accounting for a substantial portion of this production.

This dependency creates significant vulnerabilities that extend beyond supply chain disruptions. When critical medications come predominantly from overseas, the United States faces exposure to quality control issues, intellectual property concerns, and potential leverage from foreign governments during geopolitical tensions—all factors contributing to healthcare insecurity.

Recent legislative initiatives, including the CHIPS Act, the Inflation Reduction Act, and various executive orders, have created financial incentives for pharmaceutical companies to establish or expand domestic manufacturing capabilities. These policy interventions reflect growing recognition of pharmaceutical manufacturing as a matter of national security rather than merely an economic consideration.

“Companies that proactively invest in domestic manufacturing capabilities will be better positioned to navigate an increasingly unpredictable global environment,” notes Leen Kawas. “By building resilient, flexible supply chains with strong domestic components, pharmaceutical manufacturers can ensure product availability while potentially gaining competitive advantages through enhanced quality, reliability, and innovation.”

Several major pharmaceutical companies have already announced significant investments in domestic manufacturing facilities. Eli Lilly recently unveiled plans to construct four manufacturing sites in the United States at a cost of at least $27 billion, with three focused on producing active pharmaceutical ingredients. According to Pharmaceutical Technology, this initiative would effectively bring their small-molecule API production back to American soil.

Similarly, Johnson & Johnson announced a $55 billion investment in U.S. manufacturing, research and development, and technology over the next four years. These substantial commitments from industry leaders signal a fundamental reassessment of pharmaceutical manufacturing strategy.

The administration’s recent trade policies have added new urgency to reshoring efforts. The President has signaled that pharmaceutical-specific tariffs of “25% or higher” could be implemented soon, creating powerful incentives for companies to accelerate domestic manufacturing initiatives.

“The current administration’s tariff policies are accelerating decisions that many pharmaceutical companies were already considering,” says Leen Kawas. “While tariffs create immediate challenges for companies with global supply chains, they also provide powerful incentives to invest in domestic manufacturing infrastructure.”

The reshoring process faces significant challenges despite its strategic importance. According to Reuters, the Pharmaceutical Research and Manufacturers of America (PhRMA) has indicated it can take 5-10 years and approximately $2 billion to bring a new production facility online in the United States, partly due to stringent regulatory requirements.

This substantial timeline and investment threshold underscore the long-term strategic commitment required for meaningful reshoring initiatives. Companies must navigate regulatory requirements, secure adequate funding, develop specialized workforce capabilities, and establish local supply chains for raw materials and intermediate components.

“We must recognize that reshoring isn’t simply about relocating final production steps to the United States,” emphasizes Leen Kawas. “A true reshoring strategy requires developing local sources for raw materials and intermediate components. Otherwise, we’re merely shifting our vulnerabilities upstream in the supply chain.”

Advanced manufacturing technologies are proving essential to making pharmaceutical reshoring economically viable. Innovations in continuous manufacturing, 3D printing of pharmaceuticals, and other techniques enable greater production efficiency, reduce labor requirements, increase quality consistency, and ultimately make domestic production more competitive with international alternatives.

Beyond security benefits, reshoring promotes innovation by bringing production closer to research and development centers. This proximity facilitates faster iteration and more efficient knowledge transfer and, as RBC Capital Markets noted, ultimately accelerates the development of new therapies.

Quality control represents another significant advantage of domestic production. According to knowledge@Wharton, U.S. facilities face more frequent FDA inspections and must adhere to stringent regulations, potentially reducing contamination risks and ensuring higher product quality.

As reshoring efforts continue to gain momentum, America’s pharmaceutical supply chain is poised for a significant transformation that promises greater security, resilience, and self-sufficiency in the face of an increasingly unpredictable global landscape. While the journey may be lengthy and complex, Leen Kawas maintains that the strategic benefits make pharmaceutical reshoring an imperative for individual companies and the nation.