The pharmaceutical industry is entering a period of intensified trade disruption. With new tariffs on imported raw materials, active pharmaceutical ingredients (APIs), and medical components, global supply chains that once prioritized efficiency are now facing rising costs, increased complexity, and growing regulatory risk. For companies developing biologics and Antibody-drug conjugates (ADCs), the impact is particularly acute.
In this article, the authors Maria Malin, Head of Financial Planning & Analysis, and Jason Lenore, Senior Director of Supply Chain, examine how these evolving trade dynamics are forcing a strategic shift in how drug developers plan, source, acquire, and manufacture. They outline five key areas of focus for navigating this new landscape and highlight the long-term value of partnering with fully integrated, U.S.-based CDMO/CROs offering a future-ready approach to ensuring timely access to critical therapies.
Global Trade Shifts and Escalating Tariffs
The international pharmaceutical supply chain is undergoing significant disruption due to a rapidly changing geopolitical and trade environment. In April 2025, the U.S. implemented a sweeping 10% global tariff on nearly all imported goods1. This policy directly impacts the pharmaceutical and healthcare sectors by increasing the cost of critical inputs such as APIs, specialized reagents, manufacturing equipment, and medical devices.
Trade tensions have led to even more pronounced measures. Imports from China are now subject to sharply elevated tariffs, with some APIs facing cumulative duties of up to 245%, inclusive of baseline tariffs and targeted penalties2. Although certain pharmaceutical products and APIs have received temporary exemptions, these remain under active review.
Adding to this uncertainty is the possibility of further tariffs stemming from a pending Section 232 national security investigation. Section 232 of the Trade Expansion Act of 1962 is a unique U.S. trade law that empowers the President to impose tariffs or other import restrictions if the Secretary of Commerce determines that imports of a particular article “threaten to impair” national security. This broad authority allows the government to consider various factors, including the domestic production needed for defense, the capacity of U.S. industries, nd the availability of essential resources. If the investigation concludes that such a threat exists, the President can then implement measures, potentially including a 25% tariff on those imports, to safeguard national security3. This ongoing investigation and the potential for these new taxes create continued instability in the trade landscape.
As a result, many biopharmaceutical organizations operating across borders are encountering a more complex, restrictive, and unpredictable trade environment.
Supply Chain Implications for Critical Biologics and Conjugates
The evolving trade dynamics pose particularly acute challenges for companies developing biologics and ADCs. These products depend on tightly integrated, multinational supply chains for essential components that can be difficult to source domestically. APIs, conjugation reagents, high-grade excipients, and precision instrumentation often originate from a global network of suppliers that operate with interdependent timelines and quality standards.
The introduction of tariffs has already begun to disrupt the flow of materials essential to clinical and commercial manufacturing. For biologics and conjugates, these disruptions raise the risk of supply interruptions, manufacturing delays, and increased cost volatility. The downstream effect is not limited to operational inefficiencies; it has the potential to delay access to life-altering therapies for patients who depend on the timely delivery of innovative treatments.
Five Critical Factors Shaping Drug Development in a Tariff Era
The impact of new tariffs on pharmaceutical supply chains is complex and growing. Developers and manufacturers must now evaluate their operations across multiple dimensions to protect continuity, control costs, and maintain patient access to critical therapies. To navigate this evolving landscape effectively, five key areas should guide strategic decision-making:
1. Managing Macroeconomic Cost Pressures
Tariffs are driving up the cost of drug development across multiple fronts. For biologics and conjugated therapies, which already involve intricate and resource-intensive manufacturing, the pressure is particularly acute, being both direct and indirect:
As duties are applied to imports from key supplier countries, the prices of many materials used in biologics and conjugate manufacturing are climbing, placing added pressure on development budgets. To manage these rising costs, many companies are turning to more integrated or domestically-focused supply models. For products like ADCs, consolidating monoclonal antibody production, conjugation, and drug product manufacturing within the U.S., either in-house or through trusted domestic CDMO/CRO partnerships, can reduce dependence on international suppliers in tariff-affected regions. This approach helps to reduce exposure to future trade fluctuations and support long-term financial planning.
Tariffs also introduce a range of hidden costs. These include higher customs brokerage fees, increased administrative burden, and more complex import logistics. When dealing with temperature-sensitive biologics or specialized conjugates, these added complexities can delay delivery or compromise product quality.
Domestic centralization can help reduce these risks. A U.S.-anchored supply chain minimizes customs hurdles and creates a more predictable and transparent cost structure. This operational alignment supports accurate forecasting and agile budgeting across clinical and commercial programs.
Crucially, rising costs do not just affect manufacturers; they impact patients. If manufacturers are forced to pass on expenses resulting from tariffs, access and affordability may suffer. A strategic approach to supply chain design helps ensure that high-quality therapies remain accessible and economically viable, even in a more restrictive global trade environment.
2. Partnering with Forward Thinking Suppliers
The current tariff environment underscores the strategic risk of trans actional supplier relationships within any single region. For biologics and conjugated therapies, where specific raw materials, components, and technologies may have only a limited number of global sources, geographic concentration can create critical vulnerabilities.
To mitigate this, organizations are moving toward deeper, long-term supplier partnerships. Engaging key suppliers early in development enables better alignment on quality and contingency planning, and development of a diversified and responsive sub-tier for critical components. These relationships also foster transparency around sourcing constraints and help ensure mutual responsiveness when trade conditions shift.
Building resilience requires a flexible, well-integrated network supported by strong partnerships. By leveraging digital tools to monitor supplier performance and assess geopolitical exposure, biotechs and their CDMO/CRO partners can maintain real-time visibility into supply chain risk. This enables faster decision-making and reduces the likelihood of disruption, particularly when policies change with little warning.
Ultimately, a more connected and collaborative supplier strategy strengthens resilience. It allows developers to pivot when needed, without compromising on quality or delaying key milestones in clinical or commercial programs.
3. Simplifying Customs and Compliance
The introduction of tariffs typically coincides with evolving regulatory requirements that further complicate cross-border operations. For biopharmaceutical companies navigating global supply chains, this creates a dynamic compliance landscape where the risk of disruption extends beyond cost to documentation, labelling, and country-of-origin rules.
To maintain continuity under these conditions, biopharma organizations are increasingly turning to U.S.-based infrastructure backed by robust compliance systems. Anchoring operations can help avoid regulatory misalignment across jurisdictions and reduce exposure to last-minute rule changes that affect cross-border shipments. A simplified footprint also simplifies country-of-origin tracking, an increasingly critical factor in qualifying for exemptions or preferential treatment under trade agreements.
Digital tools play a central role in this compliance framework. Platforms that integrate customs documentation, import/export tracking, and real-time analytics can streamline administrative workflows and reduce clearance delays. This approach enhances visibility across the supply chain and ensures that evolving trade rules do not jeopardize delivery timelines.
4. Proactively Assessing Risk and Contingency Planning
Given the unpredictability of global trade policy, tariff-related disruptions must be treated as a persistent operational risk. For biologics and conjugated therapies, the stakes are particularly high due to supply chain complexity and limited sourcing flexibility.
Scenario modeling is essential for anticipating how changes in tariffs or regulations might impact inventory levels, lead times, and production schedules. These simulations support:
- Strategic resource allocation based on risk-adjusted demand
- Proactive scheduling of manufacturing activities to avoid disruption
- Targeted safety stock placement at critical points in the supply chain
- Rapid operational adjustments in response to shifting trade conditions.
Inventory strategy also plays a critical role. Centralizing supply within a U.S.-based infrastructure allows drug developers to minimize exposure to cross-border delays. This approach supports continuity and ensures that manufacturing can proceed without interruption, even amid global volatility.
5. Driving a Holistic Supply Chain Transformation
While tariffs introduce operational and financial pressure, they also present an inflection point for long-term supply chain strategy. For many organizations, this moment offers an opportunity to reassess structural dependencies and pursue more resilient, integrated, and domestically-focused models.
A domestically focused supply chain can significantly reduce exposure to shifting trade policies. This approach enhances timeline predictability and operational control, especially in programs with narrow manufacturing windows or critical clinical milestones.
Unlike fragmented models that rely on multiple offshore vendors for discrete steps, a fully integrated framework minimizes handoffs, streamlines coordination, and improves visibility across all stages of development.
Building for What Comes Next: The Strategic Role Of Integrated U.S.-Based Partners
As the global trade landscape continues to evolve, the ability to partner with adaptable suppliers will increasingly define success in drug development and manufacturing. Developers who view current tariff conditions not as a temporary disruption but as a signal of longer-term structural change will be better positioned to navigate what lies ahead.
By consolidating research, development, and manufacturing, fully integrated CDMO/CROs gain clearer visibility and tighter alignment across each phase of a product’s lifecycle. This infrastructure also enables faster response to future shifts in trade policy, sourcing constraints, or compliance standards.
As biopharmaceutical pipelines become more advanced and product formats more complex, the need for agile, end-to-end support will continue to grow. U.S.-based CDMO/CRO partners that bring together technical depth, integrated infrastructure, and regulatory foresight will play a central role in shaping the next era of biologics delivery.
A fully integrated CDMO/CRO operating within the U.S. can offer more than near-term protection from cost volatility and regulatory complexity. It represents a future-ready model, one that supports program continuity, simplifiesdecision-makingg and creates the conditions for scale without adding operational risk.
References
1. https://ahdb.org.uk/news/the-us-imposes-10-tariff-on-all-uk-exports-to-the-us
2. https://www.china-briefing.com/news/us-china-tariff-rates-2025/
3. https://www.whitehouse.gov/fact-sheets/2025/04/fact-sheet-president-donald-j-trump-ensures-national-security-and-economic-resilience-through-section-232-actions-on-processed-critical-minerals-and-derivative-products/
