Data Confirms Europe's CDMOs Succeed Despite U.S. Gyrations
By Louis Garguilo, Chief Editor, Outsourced Pharma
A while back, we suggested Europe’s CDMOs couldn’t wait for some form of political or trade détente vis-à-vis the U.S. They needed to actively promote and leverage their tradition and reputation for reliability.
The bigger assertion was that tariffs would not meaningfully redirect pharmaceutical manufacturing to the United States. Indeed, by the end of 2025, that seemed the case.
Now, confirming data is at hand.
“Undeterred by the 15% US tariffs on EU pharmaceuticals, biopharma companies appear to be increasingly turning to manufacturing in Europe,” says Katia Djebbar, pharma analyst at GlobalData, discussing a recent report with me.
In 2025, “nine out of the 14 US-based pharma companies that outsourced manufacturing, including Johnson & Johnson and Vertex Pharmaceuticals, invested in a total of 13 Europe-based manufacturing deals.
The GlobalData report adds that “by comparison, less than half of these companies invested in US-based facilities, signing a total of eight contract manufacturing deals.”
Pharma companies are also bolstering their in-house manufacturing footprints. The report notes Novo Nordisk and Eli Lilly and Company announced investments of $501 million and $3 billion, respectively, to expand their European manufacturing sites.
For example, “following the recent FDA approval and success of Wegovy pill … Novo is planning to expand its tablets facility in Ireland to meet the current and future US market demand.”
At the same time, we've documented how tariffs and President Trump have successfully spurred (if that's the correct word) Pharma and CDMOs to invest multi-billions of dollars in U.S. manufacturing build out. (also see: Trump's Big Pharma Deals Drive CDMO Investments)
Recognize that tariffs, plus comparative national pricing dynamics; material disruptions and shortages; labor variations are all variables (and cost inputs) for biopharma development and manufacturing outsourcing.
Tariffs, although front-page news, are just one of various components contributing to potential outsourcing-market adjustments.
Would tariffs (alone) have a discernible impact if set and sustained at, for example, 30% instead of 15%?
Let’s hope we never have to answer that.
But at this writing, the tariff terrain is still unstable. The U.S. administration continues to float the possibility of elevating tariffs on finished commercial drugs, absent certain manufacturing or pricing “deals" (with Trump, of course).
Nonetheless, even that level of "policy rhetoric" and the shifting landscape have not resulted in a broad-based shift away from European manufacturing.
According to the GlobalData report, companies continue to plan and invest with conviction in Europe (as well as the U.S.)
Stay Calm And CDMO On
We can reasonably claim that what is meant to be manufactured in the U.S. will be. When the best options for CDMOs are in Europe (or Asia), work will find its way there.
Says Djebbar of GlobalData, “The shift in manufacturing deals toward Europe highlights the limited impact that tariffs have had in steering biopharma companies away from European-based contract manufacturing.”
“The region, with Germany in particular, is an increasingly attractive and well-established hub for pharma manufacturing for the US market." This reality "hinders the current U.S. administration’s hopes to reshore domestic contract manufacturing.”
In other words, Europe hasn’t simply held serve; it appears to have pulled ahead.
“The gap between U.S.- and Europe-based contract manufacturing deals was the widest yet [in 2025], with Europe recording more than triple the U.S. deal volume,” according to Djebbar.
Interestingly, if U.S.-based biopharma companies have actively leaned into Europe, is this a reverse result of U.S. tariffs?
That seems a stretch, but GlobalData’s analysis points to "risk diversification" as a key factor in supply-chain durability in Europe—and elsewhere:
“A diversified global supply chain…will allow biopharma companies to minimize the risk of sudden, catastrophic disruptions.”
The suggestion is that while tariffs do increase costs, in a volatile geopolitical and policy environment they may actually reinforce the need to maintain geographic flexibility.
What’s clear is that tariffs—if we can isolate them from other contributing factors, and at certain levels—do not diminish the importance of established technical expertise, proven regulatory track records, reasonable project start times, and access to a broad market.
In other words, the fundamentals of supply chains and CDMO selection remain intact.
GlobalData singled out Germany as continuing to anchor Europe’s position as a manufacturing hub; I recently wrote about Italy.
But this is larger than any one or two countries. It is a testament to the durability of globally integrated manufacturing ecosystems – and to the reality that outsourcing optionality is not easily reshaped by domestic policy instruments alone.
Reshore The Right Way
None of this is to say U.S. reshoring and support for domestic biopharma manufacturing are either unattainable or not actually taking place.
Nor that tariffs are always misguided.
But if the goal is to bring more pharmaceutical manufacturing to a nation, the data increasingly point to a different set of levers:
workforce availability, development, and costs; long-term regulatory predictability; federal, state, and local policies (taxes!) governing capacity buildout and revenues; and market access.
And sponsors will continue to prioritize capability, reliability, speed, and (again) costs. CDMOs that deliver on those fronts – regardless of geography, in most cases – will continue to win business.
The past months have brought new momentum to the U.S., and also validated a durable status quo.
Global connections in biopharma manufacturing are resilient, rational, and resistant to abrupt redirection. That should not surprise us.
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Also see:
2025 Tariffs Barely Impact Europe's API Supply Chains
Europe Remains Resilient Through Uncertainty