Pharmaceutical manufacturing in the United States is concentrated in a handful of states and territories, with New Jersey, North Carolina, California, Indiana, and Puerto Rico forming the backbone of domestic drug production. That said, the U.S. produces far less than most people assume. Only 28 percent of the facilities making active pharmaceutical ingredients for the American market are located domestically, with the remaining 72 percent overseas.
New Jersey: The Original Pharma Corridor
New Jersey has the highest concentration of life sciences establishments in the country, with roughly 2,400 companies employing 86,000 people as of 2023. The sector has been growing quickly there too, adding over 13,000 jobs between 2018 and 2023, a nearly 18 percent increase. The state’s pharma roots go back more than a century, and that legacy created a self-reinforcing ecosystem of corporate headquarters, research labs, and production plants stretching from the suburbs of New York City down through the Greater Philadelphia corridor into southeastern Pennsylvania.
Johnson & Johnson, Merck, and dozens of midsize manufacturers maintain significant operations in this region. The density of specialized workers, suppliers, and regulatory consultants in the area makes it a natural home for both large-scale production and contract manufacturing organizations that produce drugs on behalf of other companies.
North Carolina’s Research Triangle
North Carolina has emerged as one of the fastest-growing pharmaceutical manufacturing hubs in the country. The state now hosts 94 biotechnology and pharmaceutical manufacturing sites within 790 life sciences companies, employing around 70,000 people. The Research Triangle area, anchored by Raleigh, Durham, and Chapel Hill, draws its strength from nearby universities and a favorable business climate.
The list of companies operating there reads like a who’s who of global pharma: Eli Lilly, Pfizer, GlaxoSmithKline, Novartis, Novo Nordisk, Biogen, and Thermo Fisher Scientific all have facilities in the region. North Carolina is also a growing center for biologics manufacturing, with contract manufacturers like KBI Biopharma and Resilience running advanced biomanufacturing operations in Durham. FUJIFILM Diosynth Biotechnologies operates a major facility there as well, producing complex biologic drugs that require specialized equipment and expertise.
Puerto Rico’s Outsized Role
Puerto Rico punches well above its weight in pharmaceutical production. The island ranked second in U.S. pharmaceutical exports in 2024, accounting for 17.6 percent of all American drug exports. Several of the world’s top-selling medications are manufactured there, including treatments for cancer, autoimmune diseases, and diabetes.
Tax incentives originally drew pharmaceutical companies to Puerto Rico decades ago, and the specialized workforce and infrastructure that built up over time kept them there even after some of those tax advantages expired. The island’s vulnerability to hurricanes, most notably the devastation from Hurricane Maria in 2017, has raised ongoing concerns about supply chain resilience, but companies continue to invest in their Puerto Rico operations.
The Midwest: Legacy Plants and New Investment
Indiana and Michigan house some of the largest and oldest pharmaceutical production facilities in the country. Eli Lilly’s home base in Indianapolis has made Indiana a major manufacturing state for decades, and the company continues to expand its footprint there. Pfizer’s largest manufacturing site in its entire global network sits in Kalamazoo, Michigan, a 1,300-acre campus that produces active pharmaceutical ingredients, finished drug products, and medical devices. That single facility employs thousands of workers and ships products worldwide.
These Midwest plants tend to focus on large-volume production of established medications, including sterile injectables and oral solid-dose drugs like tablets and capsules. The region’s lower operating costs compared to coastal states make it attractive for the kind of high-volume manufacturing where margins are tighter.
California’s Biotech Hubs
California is better known for drug discovery than drug manufacturing, but the state still has a significant production presence, particularly in biologics. San Diego, the San Francisco Bay Area, and Los Angeles each host clusters of life sciences companies spanning research, manufacturing, and distribution. In San Diego alone, the life sciences sector includes dedicated pharmaceutical preparation manufacturing, biological product manufacturing, and medicinal and botanical manufacturing facilities.
The Bay Area, centered around South San Francisco, is home to Genentech and a constellation of biotech firms that manufacture specialty biologics on site. California’s manufacturing tends to skew toward smaller-batch, high-value products like monoclonal antibodies and gene therapies rather than the mass production of generic pills. Contract development and manufacturing organizations in Massachusetts and California have become increasingly important for producing these complex biologics, which require highly controlled environments and specialized cell-culture technology.
How Much Is Actually Made Domestically
The geographic picture inside the U.S. only tells part of the story. As of 2019 FDA data, 510 facilities in the United States were producing active pharmaceutical ingredients for the domestic market, compared to 1,048 in the rest of the world (excluding China) and 230 in China. That means nearly three-quarters of the raw ingredients that go into American medications come from overseas, primarily India, China, Ireland, and other countries with lower production costs or favorable tax structures.
Finished dosage forms, the actual pills and vials patients receive, are more likely to be produced domestically. But even many drugs “made in the USA” rely on imported ingredients. This dependency has become a national security concern, and a 2025 executive order directed the FDA and EPA to streamline regulations for new and expanded domestic manufacturing facilities. The order specifically targets active pharmaceutical ingredients, key starting materials, and raw materials, aiming to reduce the regulatory timeline for getting new U.S. plants up and running.
Contract Manufacturers and the Shifting Landscape
A growing share of domestic production happens not at brand-name company plants but at contract development and manufacturing organizations. These companies produce drugs on behalf of other firms, and they cluster in many of the same states: Massachusetts, North Carolina, California, and New Jersey. Worcester, Massachusetts, for instance, hosts facilities run by global contract manufacturers specializing in biologic drugs produced through mammalian and microbial cell cultures.
This model has become especially important for smaller biotech companies that develop a drug but lack the capital or expertise to build their own manufacturing facility. It also allows production to scale up or down based on demand without the fixed costs of owning a plant. The growth of contract manufacturing means that the map of where drugs are physically made is becoming more distributed, even as the major geographic clusters remain dominant.