The U.S. pharmaceutical manufacturing industry is moving into a period of significant investment. Companies are expanding production facilities, strengthening domestic supply chains, increasing API capacity, and investing in biologics and advanced manufacturing technologies.
According to Precedence Research, the U.S. pharmaceutical manufacturing industry was valued at $145.55 billion in 2025 and is projected to reach $484.41 billion by 2035, expanding at a 12.78% CAGR between 2026 and 2035.
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But the headline growth figure is only one part of the story. The more important development is the growing focus on where medicines and pharmaceutical ingredients are manufactured.
What Is Driving the Shift Toward U.S. Pharmaceutical Manufacturing?
The U.S. continues to depend significantly on overseas pharmaceutical production. FDA data shows that approximately 53% of brand drug products and 69% of generic drug products were manufactured outside the U.S. in 2025.
API production is an even bigger concern. Only around 9% of API manufacturing sites were located in the U.S., compared with approximately 22% in China and 44% in India.
This dependence is encouraging pharmaceutical companies to reconsider their manufacturing strategies. Instead of focusing only on production costs, companies are increasingly looking at supply security, manufacturing flexibility, API availability and proximity to major pharmaceutical demand.
Which Companies Are Increasing Their U.S. Manufacturing Investments?
The financial performance and investment plans of major pharmaceutical companies show how quickly this shift is developing.
| Company | Latest financial data | Major U.S. manufacturing activity |
|---|---|---|
| Eli Lilly | Q2 2026 revenue: $23B, +48% YoY | Added $4.5B to Indiana manufacturing investment; total Indiana commitments since 2020 reached $21B |
| Johnson & Johnson | Q2 2026 sales: $25.3B, +6.6% | Plans more than $55B of U.S. investment over four years |
| Pfizer | 2025 revenue: $62.6B | Maintains a large U.S. manufacturing network and continues focusing on supply-chain resilience |
| Merck & Co. | 2025 sales: $65.0B | Opened a $1B vaccine manufacturing facility in North Carolina |
| Amgen | 2025 revenue: $36.8B, +10% | Invested $1.9B in capital projects in 2025, primarily in the U.S. |
| Bristol Myers Squibb | 2025 revenue: $48.2B | Committed $40B to U.S. investment over five years and announced a $2.3B Houston manufacturing campus |
| AbbVie | Q2 2026 revenue: $16.3B | Announced a $1.4B manufacturing campus in North Carolina and $380M for API facilities |
These investments show that pharmaceutical manufacturing is increasingly becoming a strategic component of corporate growth rather than simply an operational function.
Why Is Eli Lilly Increasing Manufacturing Capacity?
Eli Lilly provides one of the clearest examples of the relationship between product demand and manufacturing investment.
The company reported $23 billion in Q2 2026 revenue, representing 48% year-over-year growth. U.S. revenue reached approximately $14.4 billion, up 33%.
The company has also added another $4.5 billion to its Indiana manufacturing investment, bringing its total commitments in the state since 2020 to approximately $21 billion.
The underlying issue is capacity. Strong demand for medicines in areas such as diabetes and obesity requires manufacturers to continuously expand production.
For other pharmaceutical companies, Lilly’s strategy highlights the importance of connecting sales forecasts with manufacturing capacity planning.
How Is Johnson & Johnson Approaching Domestic Production?
Johnson & Johnson reported $25.3 billion in Q2 2026 sales, representing 6.6% year-over-year growth.
The company has announced plans to invest more than $55 billion in the U.S. over four years, including investments in manufacturing facilities.
The strategy reflects a broader trend among large pharmaceutical companies: maintaining strong domestic manufacturing capabilities can provide greater control over production, supply availability and long-term capacity.
For companies with large portfolios, manufacturing investments can also support new product launches while reducing dependence on geographically concentrated supply chains.
What Does Merck’s Investment Say About Vaccine Manufacturing?
Merck reported $65 billion in 2025 sales and has continued strengthening its manufacturing footprint.
One important development was the opening of a $1 billion vaccine manufacturing facility in Durham, North Carolina.
This investment is significant because vaccines and biologic products often require specialized manufacturing infrastructure, quality systems and highly controlled production environments.
As pharmaceutical portfolios become more specialized, companies may need to invest not only in additional capacity but also in specialized manufacturing capabilities.
Why Are APIs Becoming a Strategic Priority?
Finished pharmaceutical products are only one part of the supply chain. Active pharmaceutical ingredients are equally important.
With only about 9% of API manufacturing sites located in the U.S., pharmaceutical companies remain exposed to international supply disruptions.
AbbVie is responding with additional investment in API manufacturing. The company announced a $1.4 billion pharmaceutical manufacturing campus in North Carolina, along with another $380 million investment in two API facilities.
This illustrates an important change in strategy: pharmaceutical companies are increasingly considering API production, finished-dose manufacturing and supply-chain security together.
How Important Will CDMOs Become?
Not every pharmaceutical company will want to build and operate every manufacturing facility itself.
That creates an opportunity for contract development and manufacturing organizations, or CDMOs.
Precedence Research estimates the U.S. pharmaceutical contract manufacturing and research-services segment at approximately $74 billion in 2025, increasing to $78.44 billion in 2026 and potentially reaching $132.52 billion by 2035.
U.S. pharmaceutical formulation CDMO services are also projected to increase from approximately $11 billion in 2025 to $22.05 billion by 2035.
For smaller pharmaceutical companies and emerging biotechnology companies, outsourcing can provide access to manufacturing capabilities without requiring the same level of upfront capital expenditure.
What Will Other Pharmaceutical Companies Need to Identify?
The investment activity of major pharmaceutical companies creates several questions for companies planning their own manufacturing strategies.
- Supply-chain exposure: Which products and APIs remain heavily dependent on overseas suppliers?
- Capacity requirements: Will existing facilities support future product demand?
- Make-versus-buy decisions: Is internal manufacturing more practical than working with a CDMO?
- API localization: Which critical ingredients should have domestic or diversified sourcing?
- Technology investment: Where can automation, AI and advanced process technologies improve production?
- Facility location: Which U.S. locations provide the right combination of workforce, infrastructure and supply-chain access?
- Future demand: Which therapeutic areas could require significant additional manufacturing capacity?
These questions are becoming more important as companies commit billions of dollars to long-term manufacturing infrastructure.
How Can Precedence Research Help Pharmaceutical Companies?
For pharmaceutical companies, manufacturing investment decisions require more than production data. Companies need to understand demand, competitors, capacity expansion, technology adoption, outsourcing activity and regional opportunities before committing capital.
Precedence Research can support these decisions through:
- Market and industry intelligence
- Company and competitor benchmarking
- Demand and growth forecasting
- Manufacturing and CDMO opportunity analysis
- Investment opportunity assessment
- Supply-chain and regional analysis
- Strategic consulting
- Customized research for specific pharmaceutical segments
The objective is to help companies understand not only how fast the pharmaceutical manufacturing industry is growing, but also where investment is moving, which companies are expanding, and what those changes could mean for future manufacturing decisions.
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