Europe In 2026: Resilience Through Uncertainty

By Louis Garguilo, Chief Editor, Outsourced Pharma

Consider for a moment 2026 via a conversation that took place midway through 2025. It was with a biopharma professional explaining the general feeling throughout Europe for the drug development and manufacturing outsourcing industry.

I want to keep a focus on Europe as it remains so vital to development and manufacturing outsourcing – despite so much attention on the U.S., China, and even India.

“We thought tariffs had gone away, or at least settled,” said Kirsteen Keith, a 22-year veteran of GSK, and who in the middle of 2025 joined a compounding organization, Pharmaxo, as General Manager.

“Then suddenly they are back – and Europe is again in the firing line,” resurrecting a form of supply-chain anxiety many hoped had gone the way of COVID anxiety.

Within a few months, the biopharma manufacturing narrative in Europe had again flipped. The urgent question was no longer about capacity and capabilities, but how to protect an ecosystem from geopolitics.

“Biotechs are asking nervously about where should we buy our components, our APIs,” said Keith. “It’s like toilet paper and pasta during the pandemic – only now it’s pharma ingredients.”

Here at the beginning of 2026, lingering anxiety over more surprises to come have dissipated, but the political layer – “President Trump’s seemingly disregard for Europe” – remains consequential.

Tariffs add more than pricing changes to European (or any other) imports; they distort market forces.

An example of a country caught by surprise with 2025 tariffs was Switzerland, says Jana Spes, CEO & Co-founder of JT Biopharma Partners. By midyear, Switzerland had 39% tariffs imposed without real clarity regarding "exemptions for pharmaceuticals."  

“Switzerland has a deep tradition of API manufacturing, expertise in peptide synthesis, and produces critical components for U.S. biotechs,” says Spes. “Frantic efforts to ameliorate the situation ensued in late 2025.”

Much of the rest of Europe felt the same.

Recovery From Lightning Strikes

Exacerbating challenges, European CDMOs were already coping with factors such as pockets of decelerating biotech funding and some excess capacity (particularly CGT) when tariffs hit.  

CDMO executives were forced to spend time considering, to put it roughly, gaming out tariff exposure. Most predominantly: How best to keep U.S.-based customers, and their own profitability.

Adding the earlier COVID disruptions and then an exploding GLP-1 demand over the first half of the 2020s, and it has felt like multiple lighting strikes on Europe-based supply chains.

And yet … skies have cleared.

These (mostly) exogenous shocks have been met with quite heroic adjustments in supply chains throughout Europe, and around the world.

Whether manifest by adjusting capacities and capabilities (and in some cases, realities), scouring the globe for sources of materials and production, and/or larger pharma building internal facilities while also supporting CDMO partners … drug development and manufacturing relationships have adjusted.

Now kicking off this second half of the 2020s, we enter an era that needs to advance by the collection of what we might call geo-manufacturing intelligence.

Competing for customers in Europe will mean CDMOs must operate optimally – raise productivity and profitability, maintain pricing levels (to the extent possible), and stay customer-service focused. 

The good (and vital) news is they can do this by taking full advantage of long-established Europe-based manufacturing attributes: quality, reliability, and a more settled in and highly experienced workforce.

After the turbulence of a pandemic, war on the continent, and tariffs, Europe’s biopharma manufacturing is at a crossroad. But it arrives there on firmer ground than perhaps it has been on for several years.

That’s because the very pressures levering business models these past few years have also forced a kind of renewal.

Back to Keith, she suggests supply chains and manufacturers have become leaner, operate more intelligently, are more digitally atuned, and more transparent.

Production technologies — from continuous manufacturing to modular bioprocessing — have now advanced of necessity. A reflexive response to “prepare for disruption” can materialize as a new baseline for operational discipline.

Moreover, in some cases, the tariff /trade frictions may actually nudge some customers closer to their European CDMOs.

Staying Put In Europe

Pharma as well as biotechs need experience and reliable customer service from established organizations to navigate all the complexities circling the drug industry today.

That plays to European strengths; global unpredictability has made stability –  what European CDMOs offer in abundance – a stronger prerequisite among drug sponsors.

In fact, a number of CDMOs have recognized strengths in specialized modalities such as oligonucleotides, peptides, and viral vectors.

Yes, exporting materials and product to the U.S. will include a tariff calculation (now at 15% for API, for example). That’s nothing to sneeze at, especially in an environment already challenged by high prices for materials and continuing inflation.

Not a few Europe-based CDMOs have thus decided to build or expand facilities in the states. That can provide a leg up: the ability to satisfy cost-conscious U.S. customers while also offering reliable second-sourcing sites offshore.

The Trump administration’s rhetoric toward Europe has remained relatively sharp, but underlying trade mechanizations seem to have reached a period of equilibrium.

Unfortunately, that calm may still get pierced, and predictions may be moot at this point.

But there's no panic, and again we can highlight the silver lining of a more tuned in, external-supply industry operating, as we suggest above, an era of geo-manufacturing intelligence.

This includes:

• Leaders and professionals fluent in science and operations but also highly cognizant of the need for global risk assessment and management.
• Site and plant managers becoming strategic-aware participants, advising sponsors on how to structure development programs that fit into a shifting landscape. 
• European governments actively stepping into the industry conversation; policymakers recognize supporting one’s own CDMOs means anchoring a critical piece of the continent’s bioeconomy.. 
  • For example, incentive programs in France, Germany, and the Nordics are supporting local production of key APIs and advanced therapies.

Perhaps the greatest sign of optimism are the conversations that in 2025 began with “How do we survive tariffs?” now begin with “How do we operate most strategically?”

Europe’s CDMOs can’t wait for some form of political or trade détente. They need to seek cross-Atlantic alliances by leveraging their reputation for reliability.

2026 may be remembered as the year Europe’s development and manufacturing sector redefined resilience.