We recently published a list of Domestic Manufacturing Boom: 12 Best Pharma Stocks to Invest in Now. In this article, we are going to take a look at where Gilead Sciences, Inc. (NASDAQ:GILD) stands against other best pharma stocks to invest in now amid the domestic manufacturing boom.
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.”
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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.
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).
A physician and a patient having a discussion in a hospital about biopharmaceutical medicines.
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
Overall, GILD ranks 7th on our list of the best pharma stocks to invest in now amid the domestic manufacturing boom. While we acknowledge the potential for GILD as an investment, our conviction lies in the belief that some 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 GILD but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
