Having stuck with local production in the years when offshoring to lower-cost locations was in fashion, Aquestive’s CEO is well placed to explain what the recent reshoring drive means for manufacturers.
Daniel Barber has seen perceptions of the sort of onshore, in-house manufacturing adopted by Aquestive Therapeutics shift in his two decades at the company. Today, manufacturing “is having a moment where onshoring is strategic,” Barber, now Aquestive’s CEO, told BioSpace, but the situation was very different when the company first invested in local production.
Aquestive runs two facilities in Portage, Indiana: an 8,400-square-foot plant that houses the company’s cGMP manufacturing operations, and a 73,000-square-foot site that supports additional packaging, R&D and other operations. The company has a long history with the sites. MonoSol Rx, the original name for Aquestive, leased the 73,000-square-foot facility in 2006.
The startup, which spun off from a company that made plastic film for products such as detergent pods, originally kept production local while it perfected its capabilities and manufacturing process, Barber said.
As Aquestive gained scale, management “just continually saw it as an advantage to be in the U.S. because of the ability to be flexible,” Barber said. If a client asked to change something in the morning, Aquestive could start implementing the request in the afternoon. In 2007, the company said it invested in vertical integration to manufacture more quickly and cost-effectively, protect its intellectual property, reduce risk and better manage compliance.
Some of those claimed benefits of onshore, in-house production were widely recognized when Aquestive committed to its manufacturing strategy. A 2010 paper on offshore alliances struck by a multinational pharma company identified communication as a challenge of working with overseas sites, quoting an employee who said, “We don’t have the body language and, in some areas, you really have no idea how what you are saying was received.”
Aquestive avoided those challenges by keeping manufacturing local. Yet many pharma companies favored offshoring and outsourcing around the time Aquestive decided to keep its operations local.
The narrowing financial gap
U.S. manufacturing growth stalled in the early 2000s, with the industry’s headcount falling from 284,000 in 2001 to 270,700 a decade later. The financial crisis years, when Aquestive was establishing its capacity, saw the steepest decline, with the U.S. headcount falling 9% between 2007 and 2011.
While Aquestive kept manufacturing onshore, Barber said: “I completely understand why 20 years ago pharma in general ... was looking offshore. I get the simplicity of lower labor costs and material costs and so on.”
The financial tradeoffs between domestic and offshore manufacturing have changed over the past two decades. The gap between wages in the U.S. and overseas markets “was much, much wider” 20 years ago than it is today, Barber said. Data on wages support Barber’s assertion. Average monthly earnings in India increased 334% in local currency from 2005 to 2024. U.S. wages rose 98% over the same period.
Labor costs are part of Barber’s argument that the case for having your factory in the U.S. is stronger today than it has been in a few decades. Geopolitics and the rising complexity of drug production processes are other parts of the CEO’s argument.
Twenty years ago, countries such as China “were really just focused on growth, so there was much more stability around lack of tariffs, transportation logistics,” Barber said. Geopolitical changes that have made cross-border operations more challenging happened alongside rising complexity.
“The speed at which things move, especially when you think of the complexity of processes in today’s world, definitely means being closer to your facility is more important,” the CEO said. Barber added that “understanding how to access technical labor quickly is more vital than ever.”
Contending with ongoing offshoring
The return of biopharma manufacturing to the U.S. predates Donald Trump’s second term as president. Employment rose 30% from 2011 and 2024 and, according to Johnson & Johnson Chief Financial Officer Joseph Wolk, the number of biopharma manufacturing plants increased from 1,000 in 2017 to 1,600 in 2025. Wolk attributed the increase to a tax law passed in Trump’s first term.
Yet Trump’s second term has provided fresh momentum, with the president’s tariff threats precipitating a surge in commitments to invest in U.S. manufacturing facilities. By late April 2025, three months into Trump’s second term, large pharma companies had vowed to spend a combined $158 billion on U.S. manufacturing.
Barber named the active pharmaceutical ingredient (API) supply chain as a “downward pressure” on U.S.-based drugmakers. Aquestive makes its finished products at plants in the U.S., but the global nature of API supply means it remains vulnerable to some of the cross-border risks that onshoring is intended to mitigate.
“APIs are still largely sourced outside the U.S. That’s a critical supply component,” Barber said. “I would love to see more API manufacturers here in the U.S., but obviously, with the chemical plants necessary to do that, we’ll see if that happens.”
Discussing the regulatory environment, Barber said there is a reason the production of APIs moved to other countries. Experts have named “lesser regulatory burdens” and “less restrictive environmental regulations” as factors that drove the production of APIs and other chemicals offshore. The CEO added that the U.S. will have to “address the regulatory environment for that piece of the supply chain” to drive the reshoring of API production, which he sees as critical for the U.S.
Changing regulations takes time, but Barber views reshoring as a long-term trend. “Regardless of what political party is in charge, the dynamics of the broader world are not changing,” the CEO said.
“The onshoring of manufacturing and the need to have manufacturing in the regions where you are, where your patients and your clients are, I don’t think that’s going away,” Barber said. “I think this is a trend that will continue for quite some time.”
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