President Donald Trump signed an executive order Monday directing the Food and Drug Administration to streamline regulations for new drug manufacturing facilities in the U.S., aiming to accelerate their construction and bolster the domestic pharmaceutical supply chain.

The order also calls for the FDA to increase inspections of overseas manufacturing plants that supply drugs and ingredients to the U.S. market. These inspections would be funded by increased fees “to the extent consistent with applicable law.” Under the order, the FDA will publish an annual breakdown of the number of overseas inspections by country and by manufacturer, adding a layer of transparency to international oversight.

The directive arrives at a pivotal time for the pharmaceutical industry. Major drugmakers have announced over $170 billion in investment this year alone toward building new manufacturing plants in the U.S., driven by efforts to consolidate supply chains and mitigate risks posed by potential new tariffs.

Public comments are due Wednesday on a Commerce Department investigation into the national security risks associated with pharmaceutical imports, a review that could lay the groundwork for tariffs on drugs and their ingredients.

The administration’s strategy to strengthen domestic drug manufacturing comes as the industry navigates a challenging policy environment shaped by taxes, trade tensions, and drug pricing regulations. Company leaders have attributed the surge in domestic investment to incentives created by the 2017 Tax Cuts and Jobs Act, passed during Trump’s first term and slated to expire later this year.

Yet at the same time, drugmakers face uncertainty from multiple angles. The possibility of new tariffs on imported medicines and ingredients could erode profitability, while proposed pricing controls could further limit their ability to respond to rising costs. “Alongside Monday’s executive order, Trump said an announcement on tariffs and drug pricing rules could come in the next two weeks.”

Pharmaceutical giants including Johnson & Johnson, Eli Lilly, Merck & Co., Novartis, and Roche have been vocal in their push to reshore manufacturing, presenting their expansion plans both as a move to secure the U.S. supply chain and as a public relations effort to persuade the administration against new tariffs or pricing mandates.

However, building new drug factories remains a lengthy process. According to the executive order, it currently takes five to 10 years to complete such facilities — a timeline that limits how quickly new investments can impact supply chain resilience. To address this, the order instructs the FDA to eliminate “duplicative or unnecessary requirements” in the approval process and to maximize “timeliness and predictability.”

For licensing inspections, the FDA is directed to “ensure all required inspections are prompt, efficient, and limited to what is necessary to ensure compliance,” while also evaluating whether all scheduled inspections are truly necessary. At the same time, heightened inspection requirements for overseas plants could provide another incentive for companies to shift production back to the U.S.

The FDA on Tuesday announced plans to expand unannounced inspections of foreign manufacturing facilities supplying the U.S., even as Michael Rodgers, head of the FDA’s inspection office, unexpectedly announced his retirement amid job cuts in the division, according to CBS News.

Industry groups expressed cautious optimism about the administration’s latest move. Alex Schriver, senior vice president of public affairs at the Pharmaceutical Research and Manufacturers of America, called the executive order a “welcome step toward supporting the hundreds of billions of dollars in new U.S. investments.”

But Schriver warned against accompanying measures that could undercut industry growth. “Imposing tariffs on medicines or adopting foreign price setting policies would result in less U.S. investment and weaken U.S. leadership at a time when we are facing growing competition from China,” he said.

The executive order signals a balancing act by the administration: encouraging companies to expand domestically while still keeping pressure on drug prices and imports. How the FDA’s regulatory relief will translate into faster construction timelines remains to be seen, as industry experts note that factors such as workforce availability, supply chain constraints for construction materials, and permitting at the state and local levels can also slow down projects.

Meanwhile, the looming decisions on tariffs and price controls are being closely watched by pharmaceutical executives, investors, and healthcare providers, all of whom face potential ripple effects from policy changes.

The FDA’s increased transparency around overseas inspections and the move to expand domestic capacity reflect a broader push by policymakers to reduce reliance on foreign sources for critical medicines — an issue that gained urgency during the COVID-19 pandemic, when supply disruptions exposed vulnerabilities in global pharmaceutical supply chains.

Whether these latest measures will successfully address those vulnerabilities without triggering unintended consequences, such as higher costs or delayed drug availability, remains an open question as the administration moves forward with its multifaceted approach to pharmaceutical policy.

Originally reported by Jonathan Gardner in Construction Dive.