Introduction
In recent years, the conversation about strategic relocation of pharmaceutical and other industries has become central to public health, international trade, and national security agendas. Nearshoring, friendshoring, reshoring, and onshoring—once technical jargon reserved for industrial economists—are now part of the vocabulary of decision-makers striving to ensure timely access to essential medicines.
The Limitations of Global Supply Chains
In a previous article, “The Challenge of Medicines’ Supply Chain Resilience,” I warned that outsourcing the entire production process might create an illusion of efficiency but does not guarantee supply. The allure of low prices fades when logistical chains break, countries impose export restrictions, or critical inputs become concentrated in a few entities.
Beyond Location: Decision-Making and Purpose
Today, the debate has evolved. It’s no longer just about where production takes place but also about how decisions are made regarding what to produce, with which criteria, and under what incentives.
Strategic productive relocation should not be an emotional reaction or political slogan. It must be a public policy based on evidence, risk assessment, and purpose.
It’s not realistic—technically or economically—to aim for local production of everything. However, it’s also imprudent to rely exclusively on global supply chains proven vulnerable to geopolitical, health, or logistical disruptions.
The key lies in accurately identifying which products are truly critical, which have high supplier concentration, and where local capacity or development potential exists.
The Complexity of Relocation
Relocating supply chains is a slow, complex, and high-cost process that can take between 4 to 7 years, depending on regulatory complexity and required infrastructure, according to some estimates.
For this to happen appropriately, clear and consistent signals over time from states—not just governments—are required. These decisions should not be anchored to short political cycles or dependent on fleeting wills. International experience shows that countries successfully attracting pharmaceutical investment have done so through long-term strategic plans, stable regulatory frameworks, well-designed tax incentives, and public procurement policies aligned with industrial and health objectives.
Strategic Resilience: An Investment, Not a Luxury
This vision aligns with the recommendations of the 2022 report “Building Resilience into the Nation’s Medical Product Supply Chains” by the US National Academies of Sciences, emphasizing that resilience is not a luxury but a strategic investment requiring selective local production, critical stockpiling, supplier diversification, and sustained international cooperation.
The Pandemics Treaty, adopted by OMS member states on May 20, formalizes this logic. This multilateral agreement proposes monitoring, coordination, and response mechanisms for health emergencies, including clauses on local production (“sustainable and geographically diversified local production”), technology transfer, and international cooperation.
Its adoption marks a turning point: resilience is no longer just desirable but legally binding.
Beyond Supply: Broader Benefits of the Pharmaceutical Industry
Resilience is not built solely with plants and molecules. The pharmaceutical industry generates benefits extending far beyond supply, including high-value production chains, skilled jobs, investment in science and technology, and links with universities and research centers.
Revisiting Public Procurement Models
In previous articles, I highlighted the detrimental effects of the “winner-takes-all” procurement model, which concentrates production in a few global actors, erodes local capabilities, and increases system vulnerability to disruptions. Resilience requires competition, diversity, and redundancy, not concentration.
A Paradigm Shift
We are at a turning point. Efficiency can no longer be measured solely by unit price. It must include variables like continuity, equity, and sustainability.
Strategically designed productive relocation can be a powerful tool for building more robust, equitable, and future-ready health systems.
However, like a scalpel, it must be used with precision. In healthcare, improvisation comes at a high cost—lives.
