North American Ambitions

By the time President Trump threatened escalating tariffs that could reach as high as 250% on the pharmaceutical sector in an August 2025 CNBC interview,¹ many pharma companies had already begun staking out their U.S. investments.

Pharma giants Eli Lilly, J&J, Roche and AstraZeneca had each previously committed at least $50 billion to expand U.S. R&D and manufacturing footprints over the coming years. Other key players — such as BMS, Gilead, Novartis, AbbVie and Amgen — had also publicized investments in U.S. manufacturing.

It may have appeared that the industry had read the tariff tea leaves correctly, but their decisions stem from a broader convergence of supply chain pressures that have been triggering a westward migration toward North America. The U.S., Canada and Mexico have emerged as prime investment targets as pharma companies look to derisk supply chains and secure access to the world’s largest pharmaceutical market.

Companies such as AstraZeneca, Roche and Novartis have made substantial investments into expanding their Canadian manufacturing or corporate infrastructure. Meanwhile, the Mexican government recently announced² more than $643 million in new pharmaceutical investments aimed at enhancing clinical research, manufacturing and technological capacity, including Boehringer Ingelheim’s $187.5 million expansion of its Mexico City site, making it the company’s largest global plant for tablet production.

While the pharma industry’s reshoring efforts have made headlines, it is crucial to recognize that the momentum extends beyond the pharma companies themselves. The sector’s supplier ecosystem — including equipment manufacturers, components suppliers, and contract manufacturing partners — is increasingly treating North America as a strategic priority. These suppliers are following the same trend, investing in local facilities, expanding operations and optimizing supply chains to serve a market that is placing greater value on regional resilience, speed and regulatory alignment.

In essence, the reshoring movement is not just a company-level shift; it is a coordinated transformation across the entire pharmaceutical supply chain.

A Fractured Supply Chain

The pharma supply chain is not just about logistics — it’s the backbone of the industry. A well-functioning supply chain ensures drug quality and regulatory compliance, drives operational efficiencies and ultimately, enables the delivery of effective treatments to patients. Weak links anywhere in the chain can ripple across the system.

Keeping supply chains strong has become increasingly difficult for the pharma industry. While weaknesses were laid bare during the pandemic when the industry’s over-reliance on imports triggered all types of shortages, other factors have also impacted supply stability.

Economic forces, such as uncertain global trade policies as well as rising inflation, have driven up the cost of goods for both pharma manufacturers and their suppliers. As costs for materials and components continue to increase, many companies have been forced to pass on the cost of their supply chains to customers. Adding to that, geopolitical conflicts such as the Russia-Ukraine War, Red Sea crisis and South China Sea tensions have created additional logistical and cost challenges for global supply chains.

Ensuring a resilient, adaptable supply chain is no longer optional for the pharma industry — it is essential to safeguarding patient care, controlling costs and maintaining the flow of critical medicines.

Moving Closer to Customers

Many of the pharma industry’s most trusted suppliers are building plants and prioritizing investments in North America. For suppliers, being geographically closer to customers is not just a matter of convenience; it’s become an important business imperative.

— Selwyn Noronha

For ACG, one of the world’s largest integrated supplier and service providers to solid dosage manufacturers, this means making sure the company’s global consumption points have updated facilities. This past October, ACG announced a $200 million phased investment to establish its first empty-capsule manufacturing operations in the United States. The initial $100 million will fund a hard-shell capsule facility in Atlanta, Georgia, with a second phase of $100 million planned to expand capacity and capabilities in the region. The investment is expected to create more than 200 jobs, with operations targeted to begin in early 2027.

Contract manufacturers are also recognizing the benefits of being closer to their pharma and nutraceutical customers and are expanding their North American capabilities to meet demand. Portugal-based CDMO Hovione, which launched its U.S. operations in New Jersey in 2002, recently announced a $100 million investment to expand its operations at its site in East Windsor, New Jersey.

The initial expansion phase includes a 31,000-square-foot building that will house two size-3 spray dryers designed for production of amorphous solid dispersions for the company´s customers that have an interest in having a supply node in North America — more than doubling Hovione’s spray drying capacity in the U.S.

“The investment is part of our strategy to be a more integrated organization by being closer to our customers and their end markets,” says Jean-Luc Herbeaux, Ph.D., Hovione CEO. “It addresses growing customer demand for U.S.-based capacity and integrated solutions that shorten development timelines and reduce tech transfer complexity.”

The U.S. expansions aren’t standalone investments either.

Hovione’s expansion in East Windsor is part of a broader international growth plan that also includes capacity investments in Ireland and Portugal. Together, these initiatives will create a network of sites that will consolidate development, scale-up and commercial manufacturing within a single quality and governance framework, with the goal of providing customers with a more seamless execution.

ACG has paired its U.S. investments with facility builds in India (hydroxypropyl methylcellulose), Thailand (gelatin), and further expansions in Brazil, Croatia and India, with the goal of assuring the company has the operating discipline to begin production quickly and deliver reliable supply to meet the rising demands stemming from North American customers.

Proximity Breeds Trust and Fresh Ideas

In both life and business, familiarity begets trust and trust fosters relationships.

Founded in Mumbai, India in 1961, ACG remains a family-run business. According to Selwyn Noronha, CEO, ACG Capsules, the company understands that reliability is a big factor for its customers, especially given recent supply chain issues. And this trust is easier to come by if ACG has an in-country presence.

“Customers trust you more when you’re closer to them, and as a result you get a larger share of business,” says Noronha.

Having a dedicated hard shell capsule facility in the U.S. will also allow ACG to respond quicker to customers and develop new innovations through R&D partnerships, says Noronha.

Hovione is hoping to stimulate innovation and better partnerships through its New Jersey expansion. The CDMO says its new 'strategic partnership model' will give clients the opportunity to co-invest in Hovione’s technology platforms, such as amorphous solid dispersions via spray drying, continuous tableting and inhalation and nasal delivery platforms, and gain access to selected innovations and assets. 

“This approach enables differentiation, efficiency and long-term value, helping them accelerate their programs,” says Herbeaux.

— Jean-Luc Herbeaux

As part of its investment, the CDMO also acquired additional adjacent land to enable future growth and ensure the East Windsor site continues to meet evolving customer needs, including introducing the next generation of pharmaceutical technologies and digital innovation.

French plant-based ingredients supplier Roquette — which has an existing footprint in the U.S., Mexico and Canada — opened a new Pharmaceutical Innovation Center near Philadelphia in 2023 to support its global pharma business and work on next-gen oral dosage forms. The $25 million center offers an advanced training and collaboration hub for pharma and nutraceutical manufacturers around the world. The U.S. facility complements the cutting-edge research activities of Roquette’s existing pharma innovation centers in France and Singapore.

“With its strategic location in one of the world’s top pharma-producing regions, the new site will unlock even greater opportunities for closer collaboration with our customers in the U.S. and provide a beacon of best practice training and advice to our teams across the globe,” said Paul Smaltz, Vice President of Pharmaceutical Solutions at Roquette, in a press release.³

The Nutra Market Opportunity

North American investments aren’t driven solely by supply chain stressors — they are also fueled by substantial commercial market opportunities. ACG’s Noronha notes significant growth prospects in the region, particularly within the nutraceutical sector.

“The U.S. has been at the forefront of innovation in nutraceuticals,” says Noronha. “There is so much potential in North America, but you need to be present to capitalize on it.”

Noronha points specifically to the rising consumer demand for ‘clean labels,’ which has increased interest in plant-derived alternatives to traditional gelatin capsules. Ingredients such as hydroxypropyl methylcellulose (HPMC), derived from cotton cellulose, are seeing rapid growth due to the needs of vegans, vegetarians and consumers seeking more ‘natural’ products.

ACG is not alone in pursuing the clean label trend. In late 2024, Shandong Head Group, a China-based cellulose ether and HPMC empty capsules manufacturer, announced an $80 million investment in a new U.S. facility, adding more than 20 billion HPMC capsules per year to its production capacity.

“This facility will allow us to serve our North American partners more effectively while helping them reduce lead times and ensure a more robust and reliable supply chain,” said Johnnie Chen, CEO of SD Head USA, in a press release.⁴ “We’re proud to demonstrate our long-term business commitment to our customers in the U.S. and Canada, the world’s number one market for plant-based capsules.”

Similarly, in 2020, CDMO giant Catalent, which had been supplying it North and Latin American markets with plant-based softgel capsules from manufacturing sites in Italy and Germany, completed a $3.2 million expansion program at its consumer health manufacturing facilities in Strathroy, Canada and Sorocaba, Brazil to include new softgel encapsulation lines at each site.⁵

These developments highlight North America’s growing prominence as a critical market hub for nutraceutical manufacturing and innovation — and the interest from companies looking to secure a foothold in the region.

North America as a Supply Chain Anchor

Driven by persistent supply chain disruptions, shifting trade dynamics, evolving customer expectations and the accelerating growth of the nutraceutical sector, the pharma ecosystem is rewiring where — and how — it operates.

For suppliers, the move toward North America is no longer a cautious experiment but a decisive strategic realignment. With companies building capacity closer to their customers, strengthening regional networks and embedding innovation hubs within the world’s most valuable pharma and nutra markets, North America is fast becoming the nexus of a more resilient and responsive global supply chain.