The announcements have been coming regularly enough to suggest that pharmaceutical manufacturing is going through a significant shift. Johnson & Johnson committed $55 billion to domestic manufacturing in 2025, with production expected to ramp up over several years. Eli Lilly announced a $27 billion investment plan covering facilities in Indiana, North Carolina, Wisconsin, Alabama and other states, with its Alabama facility breaking ground in 2026. AbbVie has also joined the growing list of major pharmaceutical companies making domestic manufacturing commitments, alongside Novartis and many of the sector’s largest names.
There is substantial capital behind these plans, supported by regulatory and trade pressures. The freight implications, however, will take longer to become visible. To understand what is changing, it is useful to look beyond the investment figures and examine where production is moving, which parts of the supply chain remain in Asia, and how those changes affect the cargo and corridors that logistics operators manage.
The Tariff Architecture Accelerating the Decisions
US tariff policy has become one of the main drivers of pharmaceutical onshoring, and the framework introduced in 2026 has made the financial incentive more specific. Under an April 2026 proclamation, patented pharmaceuticals, their active ingredients and key starting materials face a default 100% tariff. Companies with a Commerce-approved onshoring plan receive a reduced 20% rate, while those combining an onshoring plan with a Most Favoured Nation pricing agreement receive a 0% rate until 2029. For the seventeen manufacturers named in Annex III, the framework took effect on July 31, 2026. All other pharmaceutical companies face the same framework from September 29, 2026.
The significance of this policy is not that it will immediately move pharmaceutical production to the US. Its more immediate effect is on the landed cost of products that continue to rely on imported inputs. Drug manufacturing agreements, API supply contracts and key starting-material arrangements often run for three to five years. Companies that signed those agreements before April 2026 are now having to work through the financial impact until those contracts can be renegotiated.
The FDA’s PreCheck Pilot Program is also beginning to support the domestic build-out. Its first seven-company cohort was selected in June 2026, providing earlier regulatory engagement for companies developing new domestic facilities.
China’s April 2026 Regulations on Industrial and Supply Chain Security add another consideration. US compliance measures can now create potential regulatory consequences for companies sourcing from China, adding another layer to an already complicated sourcing environment.
What Is Actually Driving the Restructuring
Tariffs are the most visible driver, but the underlying concerns became apparent during the pandemic.
Pharmaceutical supply chains had spent decades becoming more concentrated around cost and production efficiency. API manufacturing was heavily concentrated in China and India, while finishing operations were spread across a smaller number of global sites. When those networks came under pressure in 2020 and 2021, inventory buffers proved limited and alternative suppliers were not always readily available. Regulatory approval for new manufacturing arrangements could also take considerably longer than the market required.
The FDA’s data shows how significant that dependence remains. Approximately 53% of branded drug products and 69% of generic drugs distributed in the US are manufactured abroad. Only around 9 to 11% of API manufacturers are based in the US, compared with roughly 22% in China and 44% in India.
The growing importance of biologics and advanced therapies adds another factor. These products require manufacturing capabilities that differ considerably from the small-molecule production around which much of the existing Asian manufacturing base was developed. As pharmaceutical pipelines shift towards these categories, companies also must consider where the necessary infrastructure, expertise and regulatory capabilities already exist.
Those capabilities take time to establish.
Asia Is Not Leaving the Picture
It would be easy to read the current onshoring push as a move away from Asia. The production data suggests something more gradual.
India and China remain central to global API production. Together, they supply the foundational chemistry for a large share of the world’s medicines, supported by decades of technical expertise, regulatory experience and production scale. The FDA estimates that around 44% of API manufacturers are based in India and 22% in China, compared with only around 9 to 11% in the US. That concentration cannot be replicated quickly elsewhere, and most pharmaceutical onshoring programmes are not designed to replace it.
The more immediate change is likely to happen further downstream. A pharmaceutical company can build a US finishing facility while continuing to source APIs from India or China. In that situation, Asia remains an important part of the supply chain even though the final manufacturing step has moved closer to the end market.
For freight operators, this means that Asian-origin flows do not necessarily disappear. The destination may change, along with documentation and handling requirements, but the underlying production network remains in place.
Where Southeast Asia Is Gaining Share Within the Region
Southeast Asia is also attracting pharmaceutical investment from companies looking to reduce their dependence on a single manufacturing location without leaving Asia.
Vietnam, Thailand and Singapore have each attracted investment in this area. Some companies are developing dual-source models, with one facility closer to the end market and another in Asia. Singapore’s regulatory environment and established biomedical manufacturing base make it an important location for the Asian side of these networks, while Vietnam and Thailand are attracting contract manufacturing and earlier-stage investment.
For freight operators, the question is how these investments will change volumes and cargo types on individual Asian corridors as the facilities come online. That process will take time, but the investment patterns suggest that some regional flows are likely to become more important.
Labour availability in the US could also affect the pace of the transition. Preliminary Bureau of Labor Statistics figures from January 2026 showed 495,000 open manufacturing jobs, while analysts have pointed to potential cost increases from competition for construction capacity, materials and skilled workers. The experience of TSMC’s US semiconductor facilities has also highlighted some of the workforce and cost challenges involved in building complex manufacturing operations. The investment commitments are substantial, but production will take years to follow.
What Changes in Freight Before the Manufacturing Does
Pharmaceutical manufacturing cannot be relocated as quickly as a freight contract can be changed. New facilities need to be built, qualified and brought into production, so existing freight flows are likely to remain largely intact while companies redesign their manufacturing networks.
The cargo moving through those corridors may change sooner.
As biologics and advanced therapies account for a larger share of pharmaceutical pipelines, transport requirements become more demanding. GDP-compliant cold chain, validated temperature monitoring and specialist handling are not available to the same standard across every Asian export route. For logistics operators, knowing which airports, ports and service providers can consistently handle pharmaceutical-grade cargo becomes more important as the product mix changes.
Cell and gene therapies add another level of complexity. A CAR-T treatment involves collecting a patient’s cells, transporting them to a manufacturing facility, engineering them and returning them to the same patient within a narrow timeframe. The logistics network supporting that process needs to manage temperature, timing, documentation and chain of custody throughout the journey.
Only a limited number of routes and logistics providers are equipped to handle these requirements.
Planning Freight for a Supply Chain in Motion
The challenge for freight planners is that the network they are designing for today may look quite different in two or three years. Manufacturing locations can change as new facilities open and existing sites are phased out. Volumes on individual corridors may rise or fall as companies implement dual-source strategies, while changes in product mix can introduce new handling and documentation requirements.
This makes it useful for logistics teams to be involved while manufacturing strategies are still being developed. Understanding how a new production location will affect transport modes, transit times, cold-chain requirements and available capacity can help identify potential issues before the first shipment moves.
It also requires experience across both established pharmaceutical corridors from India and China and the newer routes developing through Singapore, Thailand and Vietnam. As the share of biologics and other temperature-sensitive products grows, GDP-compliant cold-chain capability becomes an increasingly important part of that network.
For logistics operators, the restructuring will affect different corridors in different ways. Some may see volumes decline as production becomes more diversified, while others could gain volume as new facilities begin supplying regional or US markets. The challenge is understanding those changes early enough to adjust capacity, service capabilities and routing options.