President Trump Issues Executive Order On Regulatory Relief To Promote Domestic Production Of Critical Medicines

On May 5, 2025, President Trump signed an Executive Order entitled, "Regulatory Relief to Promote Domestic Production of Critical Medicines" (the EO), directing the U.S. Food and Drug Administration (FDA), the U.S. Environmental Protection Agency (EPA), and the U.S. Army Corps of Engineers to assess and improve their regulations and guidance in certain areas to encourage, and to reduce "duplicative or unnecessary" barriers to, domestic pharmaceutical manufacturing. The EO also calls on FDA to increase the frequency of the agency's unannounced inspections of foreign drug manufacturing facilities.

The EO presents these actions as important for establishing a domestic, resilient, and affordable pharmaceutical supply chain, and it follows several other executive orders and actions intended to increase domestic production across a range of industries. We note key aspects of the EO in more detail below, along with some of the potential impacts on domestic and foreign pharmaceutical manufacturing activities.

EO Directives on Streamlining Review of Domestic Pharmaceutical Manufacturing by the FDA

The EO first directs FDA to, within 180 days, review and take steps to eliminate any duplicative or unnecessary requirements imposed by the agency's regulations and guidance relating to domestic pharmaceutical manufacturing. FDA must:

• Evaluate the agency's current approach to inspections, and take any steps needed to ensure such inspections are prompt, efficient, and limited to what is necessary to ensure compliance with the Federal Food, Drug, and Cosmetic Act (FD&C Act) and other applicable federal laws
• Expand FDA's existing programs that provide technical advice before a facility is operational
• Undertake measures to improve enforcement data reporting in accordance with section 510(j)(3) of the FD&C Act (21 U.S.C. 360(j)(3)) (which requires drug manufacturers, repackers, and relabelers to report to FDA annually on the amount of each drug they manufactured for U.S. commercial distribution), and to consider publicly listing any facilities that are not in compliance with those requirements
• Provide clearer guidance regarding FDA requirements or recommendations for site changes, including on moving pharmaceutical production from a foreign facility to a domestic facility
• Review and, as appropriate, update any other relevant compliance policies, guidance documents, and regulations in furtherance of the EO

EO Directives on Enhancing FDA Inspection of Foreign Manufacturing Facilities, and Related Developments

The EO directs FDA to develop and advance improvements to the agency's risk-based inspection program, to further ensure routine reviews of overseas manufacturing facilities, and to increase fees (e.g., facility registration fees) to fund such inspections, to the extent consistent with applicable law.

Relatedly, on May 6, 2025, FDA announced that the agency would be expanding the agency's use of unannounced inspections at foreign manufacturing facilities that produce foods or medical products intended for American consumers and patients. Historically, and due to certain difficulties unique to scheduling and coordinating foreign inspections, FDA has typically notified foreign facilities ahead of time that FDA would be inspecting the facility on or around a certain date.

The EO also instructs FDA to publicly disclose the annual number of inspections that the FDA conducts of foreign facilities, with specific detail by country and by manufacturer. Much of this FDA inspection data is already made publicly available by FDA through its "Compliance Dashboard" inspections database, although it is possible the EO results in further development and improvement of that public database and dashboard.

EO Directives on EPA Review and Coordination of Environmental Permits for Domestic Pharmaceutical Manufacturing

The EO directs the EPA to update the agency's regulation and guidance on the agency's inspection and approvals relating to new and expanded domestic manufacturing of pharmaceutical products, active pharmaceutical ingredients, key starting materials, and associated raw materials, to maximize the timeliness and predictability of the EPA's review and to eliminate any duplicative or unnecessary requirements. It further tasks the EPA with being the lead agency for the permitting of pharmaceutical manufacturing facilities that require preparation of an Environmental Impact Statement pursuant to the National Environmental Policy Act of 1969.¹

EO Directives on United States Army Corps of Engineers Review of Domestic Pharmaceutical Manufacturing

The EO also directs the Assistant Secretary of the Army for Civil Works to, within 180 days of the EO, review permits issued under section 404 of the Clean Water Act of 1972 (33 U.S.C. 1344) and section 10 of the Rivers and Harbors Appropriation Act of 1899 (33 U.S.C. 403) to ensure efficient permission of pharmaceutical manufacturing facilities.

Implications for Drug Manufacturers

Pharmaceutical companies with manufacturing facilities in the U.S., or with plans to move production to the U.S., will likely find the EO's directives to streamline and reduce regulatory barriers to domestic production of pharmaceuticals to be a bit of welcome news. The reviews and agency actions directed by the EO may result in fewer regulatory barriers for domestic manufacturing of pharmaceutical products and their inputs. Foreign manufacturing facilities, on the other hand, will need to adapt to a likely future increase in unannounced foreign inspections.

The goal of "reshoring" manufacturing capacity for critical medicines has had a renewed focus in light of concerns about domestic pandemic preparedness and rapidly growing biotech capacity in China posing a significant threat to the U.S. industry. That impetus is now intensified by the Trump administration's recent initiation of an investigation into whether to impose tariffs on finished drug products, medical countermeasures, critical inputs such as starting materials and active pharmaceutical ingredients, and "derivative products of those items."² On the same day President Trump signed the EO, he announced that the administration would be imposing tariffs on pharmaceutical products "within the next two weeks." The scope and terms of such tariffs are not yet clear, but tariffs on pharmaceutical products and pharmaceutical inputs, particularly active pharmaceutical ingredients, could impose significant costs on both domestic and foreign drug manufacturers, even if reshoring can be done efficiently.

The ability to achieve such efficiencies will depend in part on the capacity of the agencies cited in the EO to execute on these efficiency goals without compromising their public health and environmental missions. At least in FDA's case, there are concerns that recent resignations, firings, and policy announcements will make striking that balance more difficult, particularly in the near term.

Footnotes

1. The National Environmental Policy Act is codified at 42 U.S.C. 4321 et seq.

2. See Arnold & Porter's April 2025 Advisory for further details.