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How Pharma is keeping a Foot in Two Major Markets at Once

  • Writer: G-Med Team
    G-Med Team
  • Mar 30
  • 3 min read

As trade tensions between the U.S. and China continue to escalate, the pharmaceutical industry finds itself in a delicate dance—testing the waters on both sides of the divide. While global pharma giants are making strategic investments in the U.S. to hedge against potential tariffs, they are also maintaining strong ties with China, a market too significant to abandon. This dual approach highlights how pharma is adapting to the new geopolitical reality while ensuring long-term growth in both economic powerhouses.


Pharma China-US calculations


The Trump administration had signaled potential tariff hikes on Chinese pharmaceutical imports, a move reminiscent of Trump-era trade policies. In response, several pharma companies are doubling down on U.S. manufacturing to safeguard supply chains and mitigate risks. Eli Lilly recently unveiled a massive $27 billion investment in U.S. manufacturing, planning four new sites dedicated to active pharmaceutical ingredients (APIs) and injectables. This move not only shields Lilly from possible tariffs but also aligns with the U.S. government’s push to reduce reliance on foreign drug production.


Johnson & Johnson is committing $55 billion to new U.S. factories, further strengthening domestic manufacturing to ensure resilience against future trade disruptions. Merck just opened a $1 billion vaccine facility in North Carolina, reinforcing its commitment to U.S.-based production in a bid to stay ahead of regulatory challenges. Pfizer, already operating 13 U.S. plants, has signaled that it will shift more production stateside if trade restrictions on pharma imports tighten. These moves highlight an industry-wide trend—pharma is preparing for a future where “Made in America” becomes not just a preference but a necessity.


Despite this U.S.-focused expansion, pharma companies are not turning their backs on China. If anything, they’re still deeply engaged in the world’s second-largest healthcare market. The recent meeting between Chinese President Xi Jinping and top pharma CEOs, including those from Sanofi, AstraZeneca, Eli Lilly, and Pfizer, underscores how crucial China remains for the industry. AstraZeneca continues to expand in China, maintaining its status as one of the country’s largest foreign pharma players. Sanofi is leveraging China’s vast patient population and regulatory flexibility to speed up drug approvals. Eli Lilly and Pfizer are keeping operations active in China, balancing investments despite uncertainties in trade relations.


These companies recognize that while the U.S. offers security and supply chain stability, China presents unparalleled opportunities in terms of demand, innovation, and market size. Walking away from China isn’t an option—so they’re carefully managing their stakes in both economies.

The pharmaceutical industry’s approach to the U.S.-China rivalry reflects a broader strategy of risk management and adaptability. On one hand, investing heavily in U.S. manufacturing is a hedge against potential tariffs and geopolitical instability.


On the other, maintaining a foothold in China is critical for long-term growth and competitive advantage. As both nations continue their financial adversary, pharma is staying agile—testing the waters in both markets while ensuring they don’t get caught in the crossfire. Whether these strategies will pay off in the long run remains to be seen, but one thing is clear: pharma is playing the long game, and it’s playing it on both sides of the Pacific.


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