America faces growing pressure to secure its pharmaceutical supply chains, but protectionist policies—especially those centered on tariffs and strongarming domestic production—offer the illusion of safety while threatening affordability, access, and global competitiveness. These approaches risk raising drug prices and reducing patients’ access to medicine. As policymakers grapple with how best to bolster supply chains, they must distinguish between resilience and isolation. Supply chain security lies not in cutting off trade, but in fostering redundancy, streamlining regulation, and creating conditions that make the U.S. a magnet for strategic, high-value pharmaceutical production.
When the federal government tries to pressure companies into producing more in the U.S., the effect is a rise in production costs. These costs are passed through the supply chain, ultimately landing on patients in the form of higher pharmaceutical prices and elevated insurance premiums, as well as increased taxpayer spending on public health programs. For a country where one in four Americans already skips prescriptions due to cost, pushing prices up is dangerous health policy.
Attempting to onshore the production of generic drugs is especially counterproductive. Generic medicines survive on thin margins requiring global competition to bring costs down. They are often manufactured in countries with significantly lower labor and energy costs than the U.S. Forcing their production into higher-cost domestic production undermines the very reason generics exist: to provide broad, affordable access to treatment. The inevitable result would be either sharp price increases or drug shortages. Both outcomes reduce American pharmaceutical resilience rather than improve it.
Another overlooked risk of protectionist drug policy lies in its blind spot: export exposure. The U.S. is not just a pharmaceutical importer—it is the world’s third-largest drug exporter by value. Withdrawing from the world pharmaceutical market could provoke retaliatory actions from trading partners, undermining American pharmaceutical manufacturers’ access to international markets. High value name-brand medicines, biotech products, and cutting-edge therapies produced in the U.S. are shipped globally. Slamming the door on imports risks others doing the same to U.S. exports, shrinking the market for American-made drugs and threatening the very industry policymakers want to protect.
Some manufacturing can be enticed to return to the U.S. without tariffs or threats simply by making the U.S. a more attractive place to invest. Full expensing of pharmaceutical manufacturing investments encourages firms to build, upgrade, and expand domestic production capacity without punitive tariffs or threats. By allowing companies to deduct 100 percent of investment costs up front, rather than slowly over years, companies have more reason and capital to invest in American pharmaceutical manufacturing. This would reward proactive expansion and modernization, making domestic production more competitive without mandating it.
Streamlining biosimilar approvals is particularly important for creating more pharmaceutical manufacturing jobs because these drugs are complex, high-value therapies that tend to be produced in countries with skilled, well-compensated labor—making them a natural fit for domestic manufacturing. Removing unnecessary regulatory burdens, such as duplicative studies, reduces development costs and accelerates market entry. The FDA has release draft guidance to do so but has yet to move past the draft stage.
More biosimilars would improve patient access to lower-cost alternatives to brand-name biologics—some of the most expensive medicines on the market—while also reinforcing high-quality domestic production capacity in a segment of the market where the U.S. holds an advantage.
Framing importation as a vulnerability ignores the reality that international trade—especially with reliable partners—adds resilience, not risk. Sourcing from multiple countries reduces dependence on any single source. Redundancy across geographic regions makes the supply chain more agile in response to disruptions, including disruptions in the U.S.
Diversifying foreign suppliers is one of the most cost-effective and resilient strategies for strengthening the U.S. pharmaceutical supply. When critical medicines and ingredients come from multiple reliable countries instead of a single source the risk of geopolitical leverage, natural disasters, or industrial shutdowns preventing American from accessing the medicines they need can be mitigated.
In addition, strategic stockpiles can serve as a buffer against short-term supply shocks, allowing the U.S. to maintain access to essential medicines during crises like pandemics, trade disruptions, or supply line failures while other producers ramp up production. This strategy is especially valuable for drugs with limited production sources or long manufacturing lead times. By building and rotating inventory of key medicines, temporary shortages can be absorbed without resorting to price controls or unnecessarily high-cost manufacturing.
Cost-raising protectionist policies erode affordability, threaten competition, and invite international blowback. Policymakers should focus on incentivizing diversified sourcing, strategic reserves, and streamlined regulations—tools that lower costs while strengthening resilience.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization that advocates for consumers through evidence-based analysis and data. Visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.
