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• Published on 23 July 2025
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Published on 14 September 2026
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Published on 14 September 2026
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Published on 13 September 2026
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Published on 12 September 2026
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Published on 12 September 2026
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When a company like AstraZeneca announces it’s ploughing a cool $50 billion into its American manufacturing, it’s easy to get distracted by the headline. You might think it’s a story about new medicines or the future of healthcare. To me, that misses the point entirely. This isn't just about one company, it’s a signal flare for a much larger, and I think more interesting, shift in the global economy.
For decades, the sensible thing for big pharma to do was to make its products wherever it was cheapest. That often meant far-flung factories in Asia. But then the world got a bit messy. Supply chains snapped, trade spats turned into tariff wars, and governments suddenly remembered that having your nation’s medicine supply dependent on another country might not be the cleverest idea.
So now, the tide is turning. We’re seeing a great ‘reshoring’ wave, with pharmaceutical giants looking to bring production back home to the United States. This isn’t a fleeting trend. When you’re spending billions on a new facility, you’re not planning for next quarter, you’re planning for the next few decades. This suggests a fundamental realignment of how and where the world’s most important drugs are made.
So, where does an investor look for an opportunity in all this? I’ve always been a fan of the ‘picks and shovels’ approach. During the gold rushes of the 19th century, the people who consistently made money weren’t the thousands of prospectors hoping to strike it rich. It was the shrewd few who sold them the shovels, the pickaxes, and the blue jeans.
The same logic could apply here. Instead of trying to bet on which specific drug will be the next blockbuster, why not look at the companies that are essential to every single drug manufacturer? Every new factory, regardless of what it produces, needs the same fundamental things. It needs specialised equipment, analytical instruments, and a constant supply of raw materials.
Companies that provide these essential services are the modern-day shovel sellers. Think of firms like Thermo Fisher Scientific, which supplies the high-tech lab gear, or Avantor, which provides the crucial chemicals and materials needed to keep production lines running. They could stand to benefit no matter which pharmaceutical company wins the race for the next wonder drug. It’s this kind of thinking that underpins investment ideas like the Pharma's American Reshoring Wave basket, which focuses on these enablers.
Let’s be clear about the scale of what we’re discussing. A modern pharmaceutical plant isn’t a shed you can throw up in a few weeks. These are multi-billion dollar behemoths, packed with clean rooms, sophisticated robotics, and complex quality control systems. Building one is a monumental undertaking that requires years of planning and construction.
This creates a long, steady stream of demand for the companies involved in building and equipping them. It’s not a one-time sales bump. As more pharmaceutical giants follow AstraZeneca’s lead, the order books for these infrastructure players could look quite healthy for years to come. This is an investment theme built on concrete and steel, not just on the hope of a successful clinical trial.
Of course, no investment is a sure thing. It would be foolish to think this trend is without risk. A new political administration could reverse the tariff policies that are encouraging this shift. A sharp economic downturn could see companies put their grand expansion plans on hold. And the pharmaceutical industry itself is always under pressure to lower prices, which could squeeze the budgets for big capital projects.
However, I think the momentum here is strong. The pandemic served as a brutal lesson in the dangers of fragile, overstretched supply chains. The argument for domestic production of essential medicines is now as much about national security as it is about economics. That kind of political will tends to be more resilient than fleeting market sentiment. It suggests that while there will be bumps in the road, the general direction of travel is set.
View the full Basket:Pharma's American Reshoring Wave
View the full Basket:Pharma's American Reshoring Wave
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Published on 14 September 2026
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Published on 14 September 2026
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Published on 13 September 2026
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Published on 12 September 2026
Read article
Published on 12 September 2026
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