Trump Signs Executive Order to Accelerate Domestic Drug Manufacturing

On May 5th, Trump signed a new executive order urging the simplification of the licensing process for pharmaceutical companies to establish production facilities in the U.S. The aim is to reduce regulatory barriers and accelerate the return of key drug production capabilities to the U.S. At the signing ceremony press conference, Trump stated that he would announce tariff measures on drugs "within the next two weeks."

Current U.S. Pharmaceutical Regulatory Situation

The executive order points out that the construction timeline for pharmaceutical production facilities in the U.S. is too long. New projects must comply with federal, state, and local regulations, from building standards to zoning restrictions and environmental agreements, which have become significant obstacles to industry development. According to the FDA’s Office of Pharmaceutical Quality (OPQ) report from 2023, there were 4,819 drug manufacturing facilities globally under FDA regulation, an increase of 14% compared to five years ago. About 42% of these facilities were located in the U.S. The top five countries with the most facilities in the 2023 factory directory were the U.S. (2,009, +11%), India (585, +16%), China (484, +25%), Germany (195, +15%), and Italy (151, +7%), all of which experienced significant net growth over the past five years. (Note: The FDA fiscal year 2023 refers to the period from October 1, 2022, to September 30, 2023.)

According to industry estimates, it takes 5 to 10 years to establish new pharmaceutical and core raw material production capabilities. From a national strategic security perspective, this situation is unacceptable. Even if companies choose to upgrade or expand existing facilities to meet new drug production demands, they still have to undergo complex regulatory approval processes, making it difficult to quickly respond to market needs with idle U.S. pharmaceutical production capacity.

Policy Measures

The Trump administration has proposed a series of systemic administrative measures to eliminate domestic pharmaceutical manufacturing regulatory barriers and rebuild the competitiveness of the domestic pharmaceutical industry:

• Instructing the U.S. FDA:
  • 1. Simplify domestic pharmaceutical production reviews. Within 180 days of this order, the Department of Health and Human Services (HHS) should review existing regulations and guidelines related to domestic pharmaceutical production through the FDA, and take steps to eliminate any redundant or unnecessary requirements in these regulations and guidelines. The review should maximize the timeliness and predictability of the agency's reviews and simplify and expedite the development of domestic pharmaceutical production. The FDA’s review should cover all regulations and guidelines related to inspecting and approving new and expanded manufacturing capacities capable of producing drugs, active pharmaceutical ingredients, critical starting materials, and related emerging technologies in the U.S.
  • 2. Strengthen inspections of foreign manufacturing facilities. Within 90 days of this order, the FDA Commissioner should develop and promote improvements to the risk-based inspection system to ensure regular inspections of overseas manufacturing facilities supplying drugs to the U.S. The related fees should be raised through increased charges for foreign manufacturing facilities, in compliance with applicable laws. Additionally, the FDA Commissioner should publicly disclose the number of foreign facility inspections conducted annually, with detailed breakdowns by country and manufacturer.
• Instructing the U.S. Environmental Protection Agency (EPA):
  • 1. Simplify local drug manufacturing review processes. Within 180 days of this order, the EPA should update regulations and guidelines applicable to the inspection and approval of new and expanded production capacities for U.S. drugs, active pharmaceutical ingredients, critical starting materials, and related raw materials, in order to eliminate any redundant or unnecessary requirements and maximize the timeliness and predictability of the agency's reviews.
  • 2. Centralize coordination of environmental permits. Under the provisions of the U.S. Code, for drug manufacturing facility licenses that require an environmental impact statement under the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.), the EPA should serve as the lead agency unless designated otherwise. The lead agency should designate a single point of contact within the agency to coordinate with permit applicants. The Office of Management and Budget should, as needed, coordinate with the lead agency and relevant bodies such as the Federal Permit Improvement Coordination Council to expedite the review and approval of permits.
• Instructing the U.S. Army Corps of Engineers (USACE):
• 1. Simplify domestic drug manufacturing review processes. Within 180 days of this order, the U.S. Army Corps of Engineers, through the Assistant Secretary of the Army for Civil Works, should review whether specific pharmaceutical manufacturing activities require national permits under Section 404 of the Clean Water Act (33 U.S.C. 1344) or Section 10 of the Rivers and Harbors Act of 1899 (33 U.S.C. 403) to facilitate the permitting efficiency of pharmaceutical manufacturing facilities.

Reference

[1]. https://www.whitehouse.gov/presidential-actions/2025/05/regulatory-relief-to-promote-domestic-production-of-critical-medicines/?sessionid=-1462936037