This article, informed by Abzena’s insights, examines the potential impact of pharmaceutical tariffs on global drug development supply chains.
It highlights five key areas for industry leaders to watch: rising direct and indirect costs, benefits of nationalized supply chains, the importance of supplier diversification and digital integration, strategies for customs compliance, and proactive risk management. The piece outlines how companies can turn these challenges into long-term opportunities for resilience and competitive advantage.
As sweeping tariffs disrupt global trade, drug developers face rising costs, especially in complex biologics and antibody-drug conjugate (ADC) production. This article explores how evolving trade policies, particularly pharmaceutical tariffs, are reshaping pharmaceutical supply chains and outlines practical strategies for companies to safeguard continuity, compliance and patient access in a more volatile trade environment.
Maria Malin is Head of Financial Planning and Analysis at Abzena. She brings extensive experience in financial modeling, cost optimization and operational strategy for life sciences firms. Jason Lenore is Senior Director of Supply Chain at Abzena, with a background in logistics, risk management and global pharmaceutical operations. Together, they offer insight into how Contract Development and Manufacturing Organization (CDMO) partnerships can bolster resilience and efficiency in today’s volatile trade environment.
The global pharmaceutical sector is navigating a dramatic shift in trade dynamics. Newly imposed tariffs on imported raw materials, active pharmaceutical ingredients (APIs), and medical components are putting strain on pharmaceutical supply chains. Supply networks once optimized for cost and efficiency are now strained by escalating prices, logistical delays and regulatory uncertainty.
For companies advancing biologics and ADCs, the disruption is particularly severe. Unlike small molecules with more standardized inputs, biologics and ADCs often rely on bespoke or niche components, making them particularly vulnerable to supply chain turbulence. In this environment, trade barriers go beyond administrative inconvenience and pose a direct threat to manufacturing stability and patient access.
As developers adapt to these new constraints, a strategic pivot is underway. The focus has turned to building more resilient, integrated and domestically anchored supply frameworks. This article examines the shifting global trade landscape, the specific vulnerabilities of advanced biologics programs and the steps drug developers can take to adapt their supply chains in response.
A new global landscape: Tariff dynamics and implications
The pharmaceutical supply chain has always spanned borders and today it’s caught in a period of heightened geopolitical tension. In April 2025, the United States enacted a sweeping 10% global tariff on nearly all imported goods, directly hitting core pharma inputs such as APIs, high-grade reagents, medical instruments and manufacturing systems.
This broad measure compounded already escalating trade tensions. U.S. imports from China, for example, now face cumulative tariffs reaching up to 245% on select APIs, combining baseline rates with additional penalties. While some exemptions exist, their future is uncertain, as many are currently under government review.
Adding to the volatility, a pending Section 232 national security investigation looms over the sector. Under the Trade Expansion Act of 1962, Section 232 grants the president authority to impose up to 25 percent tariffs on imports deemed a threat to national security. This investigation, if concluded unfavorably for pharmaceutical stakeholders, could further restrict the movement of essential goods.
What emerges is a trade environment that is not only restrictive but also unpredictable. Pharmaceutical developers must now contend with an unclear regulatory horizon, fluctuating duty structures and the potential for abrupt policy changes. The operational stakes are high, particularly for programs with narrow production timelines or temperature-sensitive products.
Supply chain vulnerabilities: The biologics and conjugates perspective
The highly specialized manufacturing processes needed for biologics and ADCs are reliant on globally distributed supply chains. From cytotoxic payloads and linker molecules to cell culture media and sterile fill-finish technology, the materials and equipment required to develop these drugs come from diverse, often internationally specialized, sources.
As tariffs constrain these flows, the consequences ripple across operations. Shipments face delays, customs procedures become more complex and costs can rise unexpectedly. Unlike small molecules with more standardized inputs, biologics and ADCs often rely on bespoke or niche components, making them particularly vulnerable to supply chain turbulence.
These risks have real consequences for patients. Extended lead times for essential reagents can stall manufacturing schedules, while cost surges for critical excipients can derail budgeting for early-stage programs. In worst-case scenarios, patients may be forced to wait for access to life-saving or life-changing therapies.
The challenge of navigating tariff changes extends further than just cost containment. It is about safeguarding continuity, compliance and care delivery in an evolving trade environment.
Strategic priorities for managing tariff pressures
To adapt, developers must revisit every facet of their supply chain strategy. The following pillars stand out as essential to future-proofing operations under today’s evolving tariff
conditions:
1.Strategic cost management through vertical integration
With biologics and ADCs already operating on tight cost margins, tariff-driven price hikes leave developers with even less room for error. Companies are now rethinking the economics of supply chain design.
One increasingly favored approach is consolidating all aspects of production, including monoclonal antibody production, payload synthesis, conjugation and fill-finish within a U.S.-based infrastructure. This not only reduces exposure to overseas tariff risks, but also streamlines internal logistics, minimizes operational risks thanks to standardized processes and simplifies compliance.
Indirect cost pressures add further urgency. Customs fees, legal consulting, increased shipping complexity and higher risks to product quality all inflate operational overhead. Temperature-sensitive biologics, for example, are especially vulnerable to delays caused by new trade protocols.
Supply chain centralization delivers benefits here as well. Predictable, tariff-free inputs and reduced international paperwork create a more stable and lean cost structure and enable agile financial planning. Most importantly, cost mitigation strategies that protect access ensure that innovation does not come at the expense of patients.
2. Strengthening collaboration with forward-thinking suppliers
The days of transactional procurement are disappearing. Tariff volatility has exposed the fragility of relying on a limited set of suppliers, especially when they are concentrated in tariff-targeted geographies.
Advanced therapy developers are moving toward strategic partnerships with suppliers who offer transparency, flexibility and technical depth. By involving partners early in the development cycle and close collaboration throughout the value chain, companies can align on critical issues like formulation preferences, lead times, and documentation and contingency protocols.
By leveraging digital tools to monitor supplier performance and assess geopolitical exposure, biotech companies and their CDMO and contract research organization (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, resilient partnerships, especially with CDMOs/CROs that offer vertical integration, can help absorb shocks, preserve timelines and sustain progress even while maintaining alignment with evolving trade and compliance requirements.
3. Simplifying the compliance labyrinth
With trade reform comes regulatory complexity. Tariffs often accompany new documentation rules, labeling standards and country-of-origin requirements. For developers sourcing from multiple geographies, each policy update risks throwing compliance workflows into disarray.
For biologics and ADCs, where each input must be validated to strict quality standards, these changes can cause substantial delays if mismanaged. Uncertainty around tariff exemptions, fluctuating rates and retaliatory measures from trading partners has made forward planning increasingly difficult. Anchoring operations in U.S.-based facilities with strong compliance systems mitigates this burden and eliminates delays. It streamlines country-of-origin tracking, simplifies document requirements and minimizes exposure to mid-shipment rule changes.
Digital compliance tools can further reduce friction by automating customs filings, generating audit trails and providing real-time alerts when policy thresholds are crossed. In an environment where hours matter, speed and certainty in compliance execution are critical advantages.
4. Building agility through proactive risk management
Tariff-related uncertainty has become a persistent factor in pharmaceutical supply planning. To remain competitive and compliant, drug developers must build greater agility into their core operational planning.
Scenario modeling is essential. Simulations that test sensitivity to various tariff levels, geopolitical scenarios and sourcing disruptions allow organizations to pre-plan logistics and allocate inventory accordingly. Advanced programs might create risk-adjusted manufacturing calendars or identify key inputs requiring buffer stock, and proactively socialize lead time constraints with the clients.
Inventory centralization within the United States offers added stability. A multi-site partner can offer risk mitigation through multiple domestic warehouses with current good manufacturing practices (cGMP) validation and integrated logistics allow for faster pivots when global disruptions strike. Combined with digital monitoring of supplier exposure, this creates a foundation for proactive rather than reactive management.
Contingency planning should now be embedded into everyday operations. By anticipating disruptions rather than reacting to them, drug developers can build the resilience needed to navigate ongoing trade uncertainty.
5. Holistic supply chain redesign for resilience
While tariffs are disruptive, they also represent a turning point, an opportunity to re-evaluate structural weaknesses and rebuild smarter, more integrated systems. Unlike fragmented models that rely on multiple vendors for discrete steps across multiple international territories, a fully integrated framework minimizes handoffs, streamlines coordination and improves visibility across all stages of development.
Redesigning around U.S.-based hubs offers drug developers 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.
Looking ahead: The strategic advantage of U.S.-based CDMO and CRO partnerships
Adapting to the current trade climate requires managing today’s disruptions while planning for what’s next. Developers who recognize tariffs as a structural and not cyclical change are already recalibrating their strategies.
Fully integrated U.S.-based CDMOs and CROs offer a comprehensive solution. By combining research, development and manufacturing within a single national framework, they streamline coordination, enhance quality oversight and improve timeline predictability. These partnerships bring deep technical expertise, embedded compliance infrastructure and the operational agility needed to support increasingly advanced pipelines. With shifting regulations and ongoing trade pressures, these partnerships offer stability, clarity and the operational confidence developers need to move forward.
For forward-thinking biopharmaceutical organizations, tariffs are prompting a strategic rethink of how and where critical therapies are developed. By investing in more resilient, domestically focused supply models today, these organizations are strengthening operational control and helping ensure patients receive timely access to the treatments they need.
Find out more about how Abzena are proactively simplifying and securing the supply chain here.
