"Starting October 1, 2025, any brand or patent drug not manufactured in the United States will face a 100% tariff." – These few lines from US President Trump's social media post quickly sent ripples through the pharmaceutical industry and capital markets.
1. Who Could Be Affected?
For the biopharmaceutical industry, although the White House has not yet released the formal text of this drug tariff policy, and the final implementation details remain unclear, if enacted, the affected entities would be the Marketing Authorization Holders who ship finished drugs for sale in the US – particularly multinational pharmaceutical companies without manufacturing plants within the US.
The intent of Trump's tariff policy is clear: to force manufacturing back to the US. Regardless of whether this specific tariff policy materializes, "local manufacturing" is now part of the long-term strategy for the US drug supply chain. Accordingly, since the beginning of the year, major multinational pharma companies like Eli Lilly, Amgen, and AbbVie have disclosed plans to invest in building manufacturing facilities in the US.
For CXO (Contract Research, Development, and Manufacturing Organization) companies, another key player in the chain, the situation differs. They provide R&D and manufacturing services but are not the drug's marketing authorization holder. Therefore, the tariff liability falls on the pharmaceutical companies, not the CXOs themselves. However, CXOs with existing US infrastructure could potentially turn this policy uncertainty into an opportunity. Those possessing drug manufacturing capacity and GMP systems could become the preferred choice for clients looking to shift production.
2. US Footprint: A First-Mover Advantage Building Defenses
Take leading CXO WuXi AppTec, for example. It already has established production capacity in the US – its subsidiary, STA Pharmaceutical's San Diego site, has been operational long-term, offering integrated services from API and drug product R&D to GMP manufacturing. Furthermore, additional capacity is under expansion. According to the Delaware Business Times, its new site under construction in Middletown, Delaware, is progressing as planned. It will provide clinical and commercial manufacturing, packaging, and testing services for capsules and tablets. Scheduled to be operational by the end of 2026, the company emphasizes that the construction progress remains unaffected by external uncertainties.
Under the policy criterion of being "under construction," the Middletown site clearly has substantial progress meeting the "under construction" definition. Aligning with this policy logic, it's foreseeable that even in a worst-case scenario, the company possesses buffer space and reserved client confidence.
Beyond its US localization efforts, WuXi AppTec is also accelerating construction globally to strengthen the robustness and resilience of its supply chain. For instance, its site in Couvet, Switzerland, recently completed an expansion, doubling oral solid dosage manufacturing capacity. In the Asia-Pacific region, the first phase of its Singapore site is expected to be operational in 2027.
WuXi AppTec's forward-looking (bùjú - layout/planning) has already shown the market: true globalization means having production capacity ready where clients need it, ahead of time. Regardless of future uncertainties like tariffs or exchange rates, companies possessing "global-scale capacity + high-quality service capabilities" will become the "preferred choice" on the path to bringing new drugs to market.
