Medicines as strategic assets: the new politics of pharma supply

Medicines, previously seen as commercial products or vehicles of innovation, are increasingly being treated as strategic assets embedded within national security and industrial policy. This shift is evident in capital allocation, regulatory posture, trade policy and supply chain design.

At the centre of this transition is a growing tension. Political ambition is accelerating faster than operational reality, with governments prioritising domestic manufacturing and supply security. At the same time, companies and manufacturers are navigating the technical, regulatory and economic constraints of delivering on those expectations. The result is a complex environment where policy and execution intersect, often imperfectly.

In this context, the need for cross-sector dialogue has intensified and industry forums such as CPHI Americas create spaces to examine these tensions, bringing policymakers, regulators, manufacturers and sponsors into a shared conversation grounded in practical realities.

From efficiency to resilience

For decades, pharmaceutical supply chains were optimised for efficiency. Globalisation enabled distributed production, cost optimisation and access to specialised capabilities. While this model provided scale and flexibility, it also introduced fragility through limited visibility and geographic concentration. In a 2024 survey of pharma, biologics and medical device experts, 92 percent of respondents agreed that the level of risk in pharma and life sciences supply chains increased over the previous two years, while 51 percent expected that risk to increase further within two years.

That model is now being recalibrated. Governments are increasingly treating pharmaceutical manufacturing as a strategic priority, closer to critical infrastructure than conventional industry. This shift is reflected in several dynamics:

• Manufacturing is being framed as strategic infrastructure, prompting direct policy intervention. In the US, the focus on domestic pharmaceutical resilience and the use of the Defense Production Act during the pandemic signaled a broader shift toward treating medicines as part of national security planning.
• Significant investment is flowing into domestic API and biologics capacity, with companies such as Novartis announcing major US manufacturing investments, alongside expansion projects from Thermo Fisher and PCI Pharma Services aimed at strengthening regional supply capability.
• Geographic dependencies, particularly on China, are under increased scrutiny, as policymakers and regulators raise concerns around overreliance on Chinese APIs and materials. Recent industry discussions have reinforced how regulatory oversight and geopolitical dependence are increasingly linked.
• Trade and regulatory tools are being used to shape supply chain behavior, including tariff adjustments affecting pharmaceutical imports and increased regulatory focus on supply chain transparency, sourcing and manufacturing oversight.

These changes point to a clear transition, with supply chains being redesigned for efficiency as well as resilience, security and geopolitical alignment.

This signals an adjustment to globalisation. Supply networks are being reconfigured around strategic resilience, with greater emphasis on regional capacity, trusted partnerships and political alignment. Mike Martin, President and CEO of ISPE, will unpick this further in his session titled, ‘From Globalization to Geoeconomics: U.S. Pharmaceutical Manufacturing in a New Reality,’ on the main stage at CPHI Americas on 2 June.

Supply as a board-level issue

Supply chain performance has moved to the centre of financial and strategic decision-making, as disruptions have direct implications for investor confidence and corporate strategy.

Recent developments illustrate this shift. Supply challenges have delayed financial reporting and influenced corporate planning, highlighting how deeply supply considerations are embedded in governance. Supply capability can determine launch timelines, revenue recognition and competitive positioning.

This shift forces companies to reassess their manufacturing footprint and sourcing strategies. It also introduces new risks, particularly around the ability to produce reliably at scale under evolving regulatory and geopolitical pressures.

The geopolitics of manufacturing footprint

As governments seek to reduce dependency, the question of where medicines are made has become as important as how they are made. The manufacturing footprint is now a strategic variable shaped by incentives, regulations and geopolitical alignment.

Companies are responding to this new reality by investing in regional capacity, particularly in North America and Europe, while maintaining elements of global networks. This results in a more distributed, yet more complex manufacturing landscape.

Trade dynamics add further complexity, as tariffs and export controls can disrupt flows of materials and finished products. Regulatory concerns tied to specific regions introduce additional scrutiny, particularly around quality and data integrity.

Companies must therefore balance competing priorities such as cost, resilience, speed and compliance. These are strategic trade-offs shaped by external pressures as much as internal capabilities. Former US Department of Health and Human Services official Molly Klote and Highlander Health co-founder Amy Abernethy will discuss this further at CPHI Americas in their session, ‘FDA in Flux: Navigating the New Regulatory Landscape,’ on the main stage on 2 June.

Outsourcing as a strategic lever

Within this environment, outsourcing is being redefined. Contract development and manufacturing organisations (CDMOs) are now increasingly involved earlier in the process, as companies seek flexibility, speed and specialized expertise.

This reflects a broader shift. Resilience depends on internal capacity and the design of the wider manufacturing ecosystem. Partner selection, technology transfer and network redundancy are becoming central to supply strategy.

At the same time, expectations of CDMOs are rising. They must deliver capacity, technical expertise, regulatory insight and scalability across modalities. This is particularly evident in advanced therapies, where manufacturing complexity remains high. Outsourcing has therefore become a core strategic tool with direct implications for resilience and competitiveness.

The persistence of technical constraints

Despite growing political focus on pharmaceutical resilience, the realities of manufacturing and supply chain execution remain highly complex. Supply security depends on the location of production, the ability of manufacturing networks to scale reliably, the efficient transfer of processes, and consistent compliance across multiple sites and jurisdictions. Several technical constraints continue to shape supply chain resilience:

• Scale-up and technology transfer challenges can delay the movement of production between facilities or regions, limiting supply flexibility during periods of disruption
• Evolving regulatory frameworks often require process adaptation and additional validation, slowing efforts to diversify or regionalise manufacturing networks
• Capability gaps in workforce and infrastructure can create bottlenecks across the supply chain, particularly in specialist manufacturing hubs
• High complexity in emerging therapies, such as cell and gene treatments, makes it difficult to build redundant or geographically distributed production capacity.

These constraints create a persistent gap between policy ambition and operational execution. Governments may prioritise reshoring and resilience, but building compliant, validated supply capacity takes time, expertise and sustained investment, particularly for biologics and advanced therapies.

As a result, supply chain resilience should be viewed as a continuum rather than a fixed state. It depends on the geographic footprint, as well as technical readiness, regulatory alignment, manufacturing maturity and the ability to coordinate effectively across supplier and production networks.

Capacity expansion and competitive positioning

Capacity expansion remains a defining theme across the pharmaceutical supply chain. Investments in bioprocessing, fill-finish and integrated manufacturing are being driven by rising demand and the strategic need to secure supply continuity and reduce dependency on concentrated production hubs.

These investments are increasingly targeted toward capabilities that strengthen supply chain resilience, including high-potency APIs, biologics and advanced therapies. Many are also aligned with regional industrial priorities, particularly in the US and Europe, where governments are encouraging greater domestic manufacturing capacity.

For investors and pharmaceutical companies alike, manufacturing assets are becoming strategic components of supply chain security. Their value depends on capacity, regulatory compliance, technological relevance, operational flexibility and integration into broader supplier and distribution networks. Assessing these assets, therefore, requires an understanding of both market dynamics and the practical realities of maintaining resilient pharmaceutical supply chains.

A panel of experts from Pfizer, ISPE and more will share their thoughts, learnings and advice during ‘The New Dynamics of U.S. Pharma: How Market Forces Are Redefining the Industry’s Future,’” on 2 June at CPHI Americas.

CPHI as a point of convergence

The pharmaceutical supply system is becoming both more fragmented and more interconnected, with different stakeholders operating under distinct but overlapping pressures. Governments are prioritising resilience and sovereignty, while companies are recalibrating their strategies and investment decisions. At the same time, manufacturers and CDMOs are managing capacity constraints and regulatory compliance.

Despite these differing roles, no single stakeholder has full control over how the system functions. This has increased the importance of industry forums that support greater coordination and visibility across the sector.

Within this context, industry events such as CPHI Americas reflect a broader shift in how the sector discusses supply resilience and manufacturing strategy. Conversations increasingly focus on trade-offs such as localisation versus cost, diversification versus feasibility and speed versus regulatory certainty. As pharmaceutical supply chains become more politically and operationally complex, the need for informed, cross-sector dialogue is becoming more pronounced.

The 2026 conference agenda is structured around these key themes and conversations shaping the sector, including:

• The Evolving Biotech Innovation Ecosystem: What’s Ahead? with Murray Aitken, Executive Director at the IQVIA Institute
• The Future of Strategic Alliances in Pharma,” led by Mayank Nagar of Dr Reddy’s
• Future Market Strategy - Winning the Narrative as a Manufacturing Partner, featuring speakers from Bandwidth Solutions, LGM Pharma and Veranova.

From policy ambition to operational reality

Framing drugs as strategic assets is unlikely to reverse. Demographic trends, public health priorities and geopolitical uncertainty will continue to drive government involvement in pharmaceutical supply chains. Delivering on this ambition will require coordination across stakeholders, alignment between policy and practice, and a realistic understanding of technical constraints. It also requires closer collaboration between companies and manufacturing partners. The ability to convene informed, cross-sector dialogue therefore becomes increasingly important.

Pharmaceutical supply chains are now visible and strategically significant. Bridging the gap between ambition and execution will depend on infrastructure and investment, as well as the industry’s ability to openly engage with its own constraints.

CPHI America’s role is to support that process. By combining strategy and operations, it turns strategic intent into practical progress in an increasingly complex global system.

Click here to register and view the agenda for CPHI Americas, taking place 2-4 June in Philadelphia, US.