In 2025, the US generic drug manufacturing sector has seen notable expansions and investments, driven primarily by new tariffs, policy initiatives to onshore production, and efforts to address drug shortages and supply chain vulnerabilities. These developments aim to reduce reliance on foreign imports, particularly from China and India, which dominate global API and generic production. The push for domestic capacity is part of broader national security and economic strategies, with announcements totaling billions in commitments. However, actual capacity increases may lag due to implementation timelines, with some experts estimating 3-7 years for full scaling. Idle existing facilities also offer quick-win opportunities, as studies indicate up to 49% of US generic manufacturing capacity was underutilized pre-2025, potentially adding 30 billion doses without new builds.
Key Drivers Of Capacity Increases
(1) Tariffs and Trade Policies: Starting September 1, 2025, the US imposed a “Most Favored Nation” (MFN) tariff on generic pharmaceuticals and APIs, incentivizing domestic production by raising import costs. This has spurred investor interest and reshoring efforts, though it may initially raise prices for generics. The Trump administration’s policies, including Executive Order 14297, emphasize “made in America” drugs, with potential Section 232 tariffs under Commerce Department review.
(2) Legislative and Federal Initiatives: Congressional bills and hearings, such as the House Energy and Commerce Subcommittee’s June 2025 session, advocate for public-private partnerships, tax incentives, and grants to boost generic manufacturing. The American-Made Medicines Caucus, launched in April 2025, focuses on preserving access and expanding capacity. Federal funding for advanced technologies like continuous manufacturing aims to cut costs and enhance sustainability.
(3) Drug Shortages and Supply Chain Resilience: With 270 active shortages in early 2025 (over 80% generics), increased domestic output is prioritized for essential medicines. Brookings and USC reports highlight vulnerabilities to China, pushing for revitalization as a national security imperative.
Major Investments And Expansions In 2025
Several companies announced or advanced capacity boosts, focusing on injectables, biosimilars, and essential generics. Below is a summary of key developments:
| Company | Investment Amount | Details | Timeline/Impact |
|---|---|---|---|
| Hikma Pharmaceuticals | $1 billion | Expanding R&D and manufacturing for essential generics, including injectables; adds to existing US facilities in New Jersey and Ohio. | By 2030, with initial phases in 2025-2026; aims to increase output of shortage-prone drugs. |
| Amphastar Pharmaceuticals | Not specified (quadrupling capacity) | Quadrupling domestic manufacturing for generics, focusing on APIs and finished products. | Announced July 2025; rapid scaling using existing sites. |
| AstraZeneca | $50 billion | Broad US manufacturing expansion, including generics and biosimilars; part of tariff-response investments. | Multi-year, with 2025 site upgrades. |
| Johnson & Johnson | $55 billion | Domestic production boost, incorporating generic segments via partnerships. | Ongoing in 2025, targeting supply chain resilience. |
| Roche | Not specified | US manufacturing investments, including generics through partnerships. | Specified in May 2025; focuses on injectables. |
| Novo Nordisk | Not specified | Expansion in generics and injectables manufacturing. | Part of broader US investments in 2025. |
These investments could collectively add billions of doses annually, with a focus on high-risk categories like antibiotics and oncology drugs. Generic manufacturers like Teva and Viatris are also repurposing idle capacity, potentially increasing output by 57% within one year at surveyed sites.
Also See
(1) Key Investments By Indian Pharmaceutical Companies In The U.S. In 2025
(2) Acquisitions By Pharmaceutical Companies Of India In United States In 2025
Market Context And Projections
The US generic market is projected to grow from $133.59 billion in 2023 to $188.44 billion by 2032 (CAGR 3.5%), but capacity expansions are uneven due to pricing pressures and consolidation. Globally, generics hit $515.07 billion in 2025, with US onshore efforts contributing to a shift from offshore dominance. Challenges include rising costs from tariffs (potentially increasing prices short-term) and the need for 3-7 years to fully ramp up. Innovations like 3D printing and continuous manufacturing are expected to enhance efficiency, supporting further growth into 2030.
Overall, 2025 marks a pivotal year for US generic capacity, with policy-driven investments laying the groundwork for long-term resilience, though full impacts may emerge post-2025.