In this article, we will look at Domestic Manufacturing Boom: 12 Best Pharma Stocks to Invest in Now.
Trump Incentivizes Pharmaceuticals to Build Domestic Manufacturing Capacity
Domestic manufacturing in the pharmaceutical industry has fallen considerably in the last decades, with most active ingredient production moving to China and other countries. According to the Food and Drug Administration, this trend largely emerged due to the low labor costs and other factors in the process.
According to statistics by consulting firm EY, the United States imported around $203 billion in pharmaceutical products in 2023 alone. Around 73% of these imports came from Europe, primarily Germany, Ireland, and Switzerland. However, this trend is likely to change in the future.
On May 5, CNBC reported that President Trump signed an executive order incentivizing prescription drug manufacturing in the United States. With potential tariffs on imported medicines looming, the order streamlines the process for pharmaceutical companies to build new production sites in the country.
Trump’s order directed the Food and Drug Administration to streamline reviews and remove unnecessary requirements to slash the time it usually takes to approve manufacturing plants in the United States. According to a White House fact sheet, the order entails working with domestic drugmakers to “provide early support before facilities come online.” CNBC reported that the order also directed the FDA to increase the inspection fees for foreign manufacturing plants and enhance the “enforcement of active-ingredient source reporting by overseas producers.”
The FDA’s commissioner, Marty Makary, said the order would allow the agency to conduct more new manufacturing site inspections with the same resources. The agency would also increase foreign drug facility inspections, going from announced to “surprise” visits. Makary said:
“We had this crazy system in the United States where American pharma manufacturers .. are put through the ringer with inspections, and the foreign sites get a lot easier with scheduled visits, while we have surprise visits.”
According to White House estimates, building new pharmaceutical manufacturing capacity can take 5 to 10 years, which the administration considers “unacceptable from a national-security standpoint.” President Trump said the following about the situation in a fact sheet:
“We don’t want to be buying our pharmaceuticals from other countries because if we’re in a war, we’re in a problem, we want to be able to make our own. As we invest in the future, we will permanently bring our medical supply chains back home. We will produce our medical supplies, pharmaceuticals, and treatments right here in the United States.”
READ ALSO: Recession Resistant Investing: 10 Best Grocery Stocks To Buy Now and 11 Most Promising Future Stocks According to Hedge Funds.
Domestic Manufacturing Investments Flare Up
In addition to the FDA, Trump’s order directed the Environmental Protection Agency to “accelerate the construction of facilities” related to drug manufacturing and their ingredients. This order came ahead of President Trump’s potential tariffs on pharmaceuticals imported into the United States, who said on May 5 that he would announce the pharmaceutical-specific tariffs in the coming two weeks. These circumstances have already led to a fresh wave of domestic manufacturing investments from several top drugmakers. However, some pharmaceutical companies are also pushing back on these plans, claiming that the tariffs’ threats are hindering further US investments in R&D and manufacturing.
CNBC reported that, according to an April release for GlobalData, reshoring manufacturing in the industry can result in a more robust drug supply chain, slashing the risk of disruption. However, it could raise drug prices and production costs substantially, leading to affordability concerns.
With these trends in view, lets look at the 12 best pharma stocks to buy now amid a domestic manufacturing boom.
A well-stocked pharmacy shelf full of the company’s pharmaceuticals, nutraceuticals, over-the-counter medications, and health care products.
Our Methodology
We sifted through stock screeners, financial media reports, and ETFs to compile a list of 25 best pharma stocks and then chose the top 12 with the highest number of hedge fund holders as of Q4 2024. We sourced the hedge fund sentiment data from Insider Monkey’s database. The list is ordered in ascending order of hedge fund sentiment.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 363.5% since May 2014, beating its benchmark by 208 percentage points (see more details here).
Domestic Manufacturing Boom: 12 Best Pharma Stocks to Invest in Now
12. GSK plc (NYSE:GSK)
Number of Hedge Fund Holders: 38
Formerly known as GlaxoSmithKline, GSK plc (NYSE:GSK) is a global biopharma company that develops and distributes a range of vaccines, medications, and consumer health items. It is based in the United Kingdom and has over 20 vaccines in its portfolio. The company also develops cancer treatments for multiple myeloma, ovarian cancer, and endometrial cancer, among others. It takes the 12th spot on our list of the best pharma stocks to invest in amid the ongoing domestic manufacturing boom in the sector.
The company is advancing its share buyback program and announced the purchase of 680,805 of its ordinary shares on May 8, which will be held as treasury shares. The initiative aims to enhance the company’s shareholder value and optimize its capital structure.
GSK plc (NYSE:GSK) also recently announced positive results from its GLISTEN phase III trial of linerixibat, which deals with primary biliary cholangitis (PBC). The results reported considerable improvements in itch-related sleep interference and itch severity, highlighting the treatment’s potential to address an important symptom of PBC.
On April 30, GSK plc (NYSE:GSK) reported strong financial performance in its fiscal Q1 2025 results, with its oncology sales surging by 53%. This growth was supported by notable performances from Jemperli and AGILE, which more than doubled their sales. The company generated more than £1 billion in cash from operations, which reflects its solid operations.
Analysts are also bullish on the stock because of the notable performance of its specialty medicine segment, which is GSK plc’s (NYSE:GSK) largest business area. It underwent a significant 17% growth in the quarter, supported by key contributions from oncology, respiratory immunology, and HIV treatments, reflecting its focus on high-growth therapeutic areas.
11. Biogen Inc. (NASDAQ:BIIB)
Number of Hedge Fund Holders: 52
Biogen Inc. (NASDAQ:BIIB) is a global biopharmaceutical company that discovers, develops, and delivers advanced therapies for serious diseases worldwide. Its medicine portfolio treats multiple sclerosis (MS), spinal muscular atrophy (SMA), Alzheimer’s disease, and amyotrophic lateral sclerosis (ALS).
The company has an elaborate product portfolio for MS, including TECFIDERA, VUMERITY, AVONEX, PLEGRIDY, TYSABRI, and FAMPYRA. It also markets SPINRAZA to treat SMA, SKYCLARYS for the treatment of Friedreich’s Ataxia, and other drugs. The company takes the 11th spot on our list of the best pharma stocks to buy now.
On May 1, analyst Marc Goodman from Leerink Partners maintained a Buy rating on the stock with a $260.00 price target, supported by the company’s strong fiscal Q1 2025 performance and positive outlook on international sales.
Biogen Inc. (NASDAQ:BIIB) demonstrated resilience in positive developments in Skyclarys, Leqembi, and Spinraza products outside the US. The analyst considers this international trend a significant strength for the company, as a significant portion of its revenue is anticipated to come from outside the US.
The analyst expressed optimism for Biogen Inc.’s (NASDAQ:BIIB) future operations despite its challenges in the US market, especially with Skyclarys and Leqemb. It has significant potential for growth, supported by factors such as the expected approval of new treatments and diagnostics for Alzheimer’s disease and promising pipeline developments like BIIB080 and Litifilimab.
10. AstraZeneca PLC (NASDAQ:AZN)
Number of Hedge Fund Holders: 55
AstraZeneca PLC (NASDAQ:AZN) is a biopharmaceutical company that explores, develops, manufactures, and commercializes prescription medicines. It supplies its products and services to specialty and primary care physicians. AstraZeneca PLC (NASDAQ:AZN) distributes its products and services through local representative offices and distributors.
On April 30, Analyst Sachin Jain from Bank of America Securities reiterated a Strong Buy rating on AstraZeneca PLC (NASDAQ:AZN), backed by its promising pipeline and oncology growth. The analyst said that the company’s oncology sector is supported by a new baseline for volume growth and that it is well-prepared to deal with potential tariff effects because of its strategic manufacturing locations.
The analyst further supports the bullish stance with AstraZeneca PLC’s (NASDAQ:AZN) promising pipeline, which is anticipated to significantly contribute to future sales growth. In addition, upcoming data releases from key trials such as SERENA-6 and AVANZAR are also expected to unlock significant sales opportunities because of their transformative potential.
9. Novo Nordisk A/S (NYSE:NVO)
Number of Hedge Fund Holders: 64
Novo Nordisk A/S (NYSE:NVO) is a global healthcare company specializing in diabetes care. It develops, discovers, manufactures, and markets pharmaceutical products. Its operations are divided into two business segments: biopharmaceuticals and diabetes and obesity care. The latter segment covers GLP-1, insulin, and other protein-related products.
Novo Nordisk A/S (NYSE:NVO) is one of the two major pharmaceutical companies competing in the GLP-1 weight loss market, with the other being Eli Lilly. It ranks ninth on our list of the best pharma stocks to buy now amid the domestic manufacturing boom.
On May 7, Novo Nordisk A/S (NYSE:NVO) reported solid performance in its fiscal Q1 2025 results, with sales rising by 19% in Danish kroner and operating profit growing by 22%. The growth was attributed to a notable 67% growth in obesity care sales and the continuous expansion of GLP-1 diabetes treatments.
The company, however, adjusted its full-year outlook because of lower-than-anticipated penetration of branded GLP-1 treatments in the US. It is actively fighting unlawful compounding and expanding patient access to its treatments.
On May 8, UBS analyst Jo Walton maintained a Buy rating on Novo Nordisk A/S (NYSE:NVO) because of its solid performance, setting a price target of DKK700.00.
8. Amgen Inc. (NASDAQ:AMGN)
Number of Hedge Fund Holders: 72
Amgen Inc. (NASDAQ:AMGN) is a biotechnology company that discovers, develops, manufactures, and markets human therapeutics. It delivers new therapies for patients with complex cancers, especially in areas with significant unmet needs. The company ranks eighth on our list of the top pharma stocks to invest in.
On May 1, Goldman Sachs analyst Salveen Richter maintained a Buy rating on Amgen Inc. (NASDAQ:AMGN) and set a price target of $400.00, supported by its strategic positioning and strong financial performance. The company’s fiscal Q1 2025 results showed a notable EPS beat, supporting the buy rating and highlighting its cost management and operational efficiency, especially in R&D spending.
The analyst reasoned that management’s reiteration of its guidance for fiscal year 2025 highlights confidence in sustained profitability and revenue growth. Amgen Inc. (NASDAQ:AMGN) has a robust pipeline, especially in cardiovascular disease and obesity. When coupled with its strategic focus on biosimilars and legacy brands, the company’s overall outlook remains positive.
7. Gilead Sciences, Inc. (NASDAQ:GILD)
Number of Hedge Fund Holders: 74
Gilead Sciences, Inc. (NASDAQ:GILD) advances medicines to prevent and treat serious diseases such as cancer, human immunodeficiency virus (HIV), viral hepatitis, and COVID-19. Its portfolio of drugs focuses on medical areas with unmet needs and includes AmBisome, Atripla, Biktarvy, Cayston, Complera, and others. Gilead Sciences, Inc. (NASDAQ:GILD) operates in over 35 countries.
Reuters recently reported that Gilead Sciences, Inc. (NASDAQ:GILD) plans to invest $11B in the US to bolster its domestic manufacturing and research. This puts it seventh on our list of the top stocks to buy amid the ongoing domestic manufacturing boom.
According to the report, the investment is expected to supplement $21 billion in US manufacturing and R&D through 2030. Gilead Sciences, Inc. (NASDAQ:GILD) also has plans to build three new facilities, upgrade three existing sites, and invest in new technology, lending it an optimistic light.
Based on the company’s positive outlook, TD Cowen analyst Tyler Van Buren maintained a Buy rating on Gilead Sciences, Inc. (NASDAQ:GILD) on May 6 and set a price target of $110.00
6. AbbVie Inc. (NYSE:ABBV)
Number of Hedge Fund Holders: 85
AbbVie Inc. (NYSE:ABBV) is a research-based pharmaceutical company that develops and sells products to treat chronic diseases in oncology, gastroenterology, rheumatology, dermatology, virology, and various other serious health conditions.
On April 29, AbbVie Inc. (NYSE:ABBV) announced the FDA approval of Rinvoq for treating adults with giant cell arteritis. The approval followed the European Commission’s recent marketing authorization of Rinvoq to treat GCA in adult patients.
The same day, Guggenheim analyst Vamil Divan raised the firm’s price target on AbbVie Inc. (NYSE:ABBV) to $216 from $214, keeping a Buy rating on the shares. The analyst noted that the company reported an “an impressive quarter,” with fiscal Q1 2025 results exceeding expectations in both quarterly EPS and sales. This led to the analyst updating the firm’s model on AbbVie Inc. (NYSE:ABBV).
The company’s net revenue for fiscal Q1 2025 came to $13.343 billion, undergoing an 8.4% growth on a reported basis or 9.8% on operational basis. Adjusted diluted EPS reached $2.46, reflecting a 6.5% increase.
5. Bristol-Myers Squibb Company (NYSE:BMY)
Number of Hedge Fund Holders: 88
Bristol-Myers Squibb Company (NYSE:BMY) is a biopharmaceutical company that discovers, develops, and delivers advanced medicines for serious diseases. Its medicines fall into various therapeutic classes, including hematology, oncology, cardiovascular, immunology, and neuroscience.
On May 5, Bristol-Myers Squibb Company (NYSE:BMY) CEO Christopher Boerner wrote that the company has plans to spend $40 billion in the US over the next five years. This investment plan is expected to strengthen the company’s presence in the country and increase its radiopharmaceutical manufacturing. It also plans to invest in machine learning and AI to significantly boost the pace of innovation of its programs.
On April 30, Piper Sandler raised the firm’s price target on Bristol-Myers Squibb Company (NYSE:BMY) to $66 from $65, keeping an Overweight rating on the shares. The firm is updating its model after its recent earnings release for fiscal Q1 2025. Most of the upward revisions to its sales estimates stem from Bristol-Myers Squibb Company’s (NYSE:BMY) legacy business. The company takes the fifth spot on our list of the best pharma stocks to buy now in the wake of the domestic manufacturing boom.
4. Merck & Co., Inc. (NYSE:MRK)
Number of Hedge Fund Holders: 91
Merck & Co., Inc. (NYSE:MRK) is a biopharmaceutical company that delivers health solutions to advance the treatment and prevention of diseases in animals and people.
Its Pharmaceutical segment offers vaccines and human health pharmaceutical products, typically therapeutic and preventive agents. Its Animal Health segment develops, discovers, manufactures, and markets a range of vaccines and veterinary pharmaceutical products.
Merck & Co., Inc. (NYSE:MRK) plans to manage the effects of tariffs by opening a $1 billion new plant in the US, expected to open by 2030. The plant will be based in Delaware and will manufacture a range of the company’s drugs sold in the US.
Merck CEO Rob Davis told The Wall Street Journal that this strategic step would ensure that Merck & Co., Inc. (NYSE:MRK) sources its US needs from its US sites. He also said that the company’s decision to invest in domestic manufacturing was driven by “what the current administration is doing and what President Trump is trying to achieve.” The company takes the fourth spot on our list of the best pharma stocks to add to your portfolio.
3. Pfizer Inc. (NYSE:PFE)
Number of Hedge Fund Holders: 92
Pfizer Inc. (NYSE:PFE) is a global biopharmaceutical company that manufactures, develops, markets, and sells biopharmaceutical products worldwide. It advances wellness, prevention, treatment, and cures in developing and emerging markets.
The company’s goal is to become a world-class oncology leader. It is already the third-largest biopharma company in oncology in the United States and plans to continue its progress for the rest of the decade.
On April 30, BMO Capital analyst Evan Seigerman maintained their bullish stance on Pfizer Inc. (NYSE:PFE), giving it a buy rating and suggesting it is well-positioned for future growth. The analyst reasoned that the company’s recent financial performance reflects strong operational efficiency that could potentially result in improved profitability. This especially includes Pfizer Inc.’s (NYSE:PFE) ability to surpass expectations on cost savings.
Management is also committed to maintaining its dividend and strategic capital allocation, which reflects confidence in its future prospects and financial stability. Pfizer Inc. (NYSE:PFE) is proactively navigating the challenges of current economic and political landscape, which favorably position it compared to its peers, according to the analyst.
2. Johnson & Johnson (NYSE:JNJ)
Number of Hedge Fund Holders: 98
Johnson & Johnson (NYSE:JNJ) is the second-best pharma stock to buy now. It develops, manufactures, and sells products in the healthcare field. The company operates through two segments: Innovative Medicine and MedTech. The MedTech segment includes various medical devices and products used in cardiovascular intervention, orthopedics, interventional solutions, surgery, and vision fields.
In a report issued on May 2, Asad Haider from Goldman Sachs maintained a Buy rating on Johnson & Johnson (NYSE:JNJ) and set a price target of $176.00.
Leerink Partners analyst David Risinger also maintained his bullish stance on the stock on May 1, giving it a Buy rating due to the promising developments in its TAR-200 platform for bladder cancer treatment.
Strong data from the SunRISE-1 Cohort 4 study support this bullish sentiment, highlighting the significant potential of TAR-200 as a preferred treatment option. According to the analyst, it has the potential to replace more invasive procedures like radical cystectomy. The treatment also has a favorable safety profile.
Management estimates peak sales for the TARIS platform to surpass $5 billion, suggesting strong revenue potential. Johnson & Johnson (NYSE:JNJ) also plans to seek strategic approval in 2026, which further justifies the stock’s buy rating.
Since many bladder cancer patients fall in the non-muscle invasive category, the significant market opportunity further supports Johnson & Johnson’s (NYSE:JNJ) positive outlook.
1. Eli Lilly and Company (NYSE:LLY)
Number of Hedge Fund Holders: 115
Eli Lilly and Company (NYSE:LLY) develops, manufactures, discovers, and sells pharmaceutical products. These products span oncology, diabetes, immunology, neuroscience, and other therapies.
Analysts are bullish on Eli Lilly and Company (NYSE:LLY) due to its in-demand GLP-1 drugs, which are used to treat diabetes and obesity, and the company’s strong financials. Its median price target of $734.57 implies an upside of 37.50% from current levels.
In a report released on May 9, Tim Anderson from Bank of America Securities maintained a Buy rating on Eli Lilly and Company (NYSE:LLY) and set a price target of $1,000.00. The analyst based his rating on the promising developments in the company’s product pipeline, especially in the GLP-1 and obesity-related sectors.
According to the analyst, GLP-1s are anticipated to be a key component in this sector, and Eli Lilly and Company (NYSE:LLY) is exploring various approaches to long-term weight maintenance. In addition, it is also advancing research in Alzheimer’s disease.
Eli Lilly and Company’s (NYSE:LLY) significant progress with its tirzepatide drug also supports the buy rating. The drug is being tested in the SURPASS-CVOT trial, and has demonstrated potential pleiotropic effects. The company’s orforglipron and retatrutide programs are also seeing advancements, and upcoming results are expected to offer more insights. The overall outlook for Eli Lilly and Company’s (NYSE:LLY) pipeline thus remains positive, ranking it on our list of the best pharma stocks to buy now.
Overall, LLY ranks first among the best pharma stocks to buy now. While we acknowledge the potential of pharma stocks, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than LLY but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
