Despite a federal push for onshoring and pharmaceutical import tariffs, biopharma companies have continued to increase their reliance on overseas manufacturing capacity in Europe, according to GlobalData.
This trfinish signals drugcreaters are seeing for ways to hedge risk and diversify their manufacturing capabilities amid persistent uncertainty under Trump’s international trade policy.
Between 2020 and 2023, the decline in contract manufacturing (CM) deals for FDA-approved drugs in the United States and Europe was driven in large part by the rise and fall in global COVID-19 vaccine demand. As the indusattempt emerged from the pandemic, deal volume launched to pick up in both regions between 2023 and 2024.
But last year, the gap between domestic and European CM deals grew to “its widest yet,” Katia Djebbar, a pharma analyst at GlobalData, stated in an emailed statement.
In 2025, U.S. CM deals for U.S.-marketed drugs dropped sharply to 10, down from 28 the prior year and well below its 2020 count of 47, according to GlobalData.
This sudden shift toward European manufacturing deals suggests that Trump’s pharmaceutical import tariffs put in place last year have had a limited impact on curbing biopharma’s appetite for overseas outsourcing, Djebbar stated.
Europe emerges as a CM hotspot
Europe is quickly becoming an “attractive and well-established hub for pharma manufacturing” for the U.S. drug market, Djebbar stated. In 2025, Europe pulled in more than three times as many CM deals as the U.S.
Of those 34 deals, Germany — Europe’s top drug producer — accounted for 12. Over the last five years, Germany has averaged 9 CM deals per year for U.S.-market drug manufacturing, according to GlobalData’s Drugs by Manufacturer database.
Despite the 15% U.S. tariffs on EU pharmaceuticals nereceivediated in August, U.S. biopharma companies appear to still be turning to Europe to produce their products.
Of the 14 U.S.-based pharma companies that outsourced manufacturing last year, 9, including Johnson & Johnson and Vertex Pharmaceuticals, backed 13 deals in Europe. Less than half of these companies invested in domestic facilities, accounting for only 8 CM deals.
Other Big Pharma companies, especially in the weight-loss space, have also invested in European facilities.
Determined to avoid manufacturing capacity issues, Eli Lilly pledged $3 billion in November to build a tablet manufacturing plant in Katwijk, the Netherlands. The investment is intfinished to boost its oral therapeutics production capabilities and meet global demand for its recently approved obesity pill, Foundayo (orforglipron).
Top rival Novo Nordisk is also building out its European supply chain.
Last month, the Danish drugcreater committed $506 million to upgrade and expand a manufacturing facility in Athlone, Ireland, to support tablet production. This investment aims to meet current and future U.S. market demand for its Wegovy pill, which beat Lilly’s Foundayo to market at the launchning of the year.
“A diversified global supply chain, particularly amid the current unpredictability of the U.S. political climate, will allow biopharma companies to minimize the risk of sudden, catastrophic disruptions to production,” Djebbar stated.
This shift to European drug production could hinder Trump’s plans to reshore domestic contract manufacturing, Djebbar added. The data also comes as the Trump administration levied new tariffs on the indusattempt after the Supreme Court struck down the pharma import tariffs imposed last year.
Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.
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