Gil Roth, president of the Pharma and Biopharma Outsourcing Association (PBOA), delivered a stark assessment of the uncertain regulatory and trade environment facing US drug manufacturers under Donald Trump’s administration at CDMO Live 2025.
In a presentation characterised by its unflinching candour, Roth outlined the key challenges confronting contract manufacturers, from rapidly changing tariff policies to mass layoffs at the FDA. His central message was bracingly simple: “Nobody knows anything. You need to be focused on flexibility and optionality.”
Tariff Chaos
The unpredictability of the current administration’s approach to trade policy has reached almost farcical levels, according to Roth, who described discovering a “mutant superpower” related to tariff announcements.
“Anytime I write an email to PBOA’s member companies explaining the current state of tariffs that have been instituted by the US government, and hit send, that triggers the White House into changing its tariff policy,” Roth explained. “This has happened four times now.”
Whilst pharmaceuticals were initially exempted from the first wave of tariffs announced on April 2, the president has promised sector-specific pharma tariffs, with timeframes constantly shifting. “There’s always an announcement that it’s coming in a week. It’s coming in a few weeks, sometime in the near future,” Roth noted. “No one knows. No one knows what shape they’re going to take.”
The industry has responded to tariff threats with major investment announcements. Companies including Eli Lilly, Novartis, J&J, Merck, and AbbVie have committed billions to US manufacturing facilities. Roth expressed concern about potential workforce competition: “Those guys have deeper pockets, and it could become a workforce drain on the CDMO side.”
FDA in Crisis: Mass Layoffs Threaten Regulatory Function
Perhaps more concerning than trade uncertainties is the situation at the FDA, where the Department of Government Efficiency (DOGE) and HHS have implemented significant staff reductions.
“FDA, which apparently numbers aren’t clear yet, has lost about 19 to 20% of its total staff,” Roth reported. The layoffs have particularly affected project managers who coordinate drug application reviews. “Those are the guys who organise all the reviewers for any drug application… If that person is taken out of the loop, all you have are the reviewers, and then no one quite knows what happens to drug applications down the line.”
This image of the FDA organisational chart shows the breadth of the cuts to the agency:
The timing couldn’t be worse, with user fee negotiations scheduled to begin this autumn. The HHS Secretary has previously expressed opposition to user fees, contending they represent “industry capture of regulators.” Roth warned of potentially apocalyptic scenarios: “My bad is that the user fee structure completely collapses… From a CDMO perspective, you don’t know when your client’s products are actually going to get approved.”
China Decoupling: From BIOSECURE to Reality
The failed BIOSECURE Act, which would have prohibited companies from working with certain Chinese firms, continues to cast a shadow over the industry. Whilst the legislation didn’t pass, its effects persist.
“A lot of companies, especially venture-funded startups, that may have been considering project starts in China, have been avoiding that,” Roth observed. “They’ve been looking for Western providers instead.”
FDA inspectors’ concerns about China’s Counter Espionage Act add another layer of complexity. Roth recounted anecdotal reports of inspectors being detained: “I’ve heard stories of inspectors being pulled from their hotel rooms at two o’clock in the morning and taken to a police station.”
The administration’s preference for bilateral over multilateral agreements has also affected supply chain initiatives. A promising “Bio Five” coalition between the US, European Commission, India, Japan, and Korea that was exploring redundant API supply chains has disappeared. “The website I got this from is now a 404 not found on the White House site,” Roth noted.
Executive Orders and Domestic Manufacturing
A recent executive order aimed at incentivising domestic pharma manufacturing adds another variable to the mix. The order promises streamlined regulations and environmental approvals, increased foreign facility inspections, and higher fees for foreign facilities.
Roth highlighted the implications for GDUFA negotiations: “What this executive order seems to imply is that [the foreign differential] number will not be $15,000 when we start negotiating GDUFA 4 in a couple of months.”
Key Takeaways: Flexibility Above All
Roth’s conclusions were sobering but pragmatic:
- “Nobody knows anything” – accept uncertainty as the new normal
- Develop flexibility and optionality in all planning
- Work closely with clients to understand supply chains thoroughly
- Stay on top of rapidly changing tariff policies
- Prepare for sudden policy announcements and equally sudden reversals
As Roth concluded: “You need to be prepared for very strange things being announced suddenly and potentially being withdrawn shortly after. You need to start looking at sort of the tea leaves and the psychology behind some decisions that get made.”
For an industry built on long-term planning and regulatory predictability, the message was clear: adaptability has become the most valuable asset in navigating Trump’s second term.
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