Why MedTech Companies Are Reshoring Supply Chains

In recent months, medical device and diagnostics companies have increasingly considered reshoring or near-shoring their operations to North America.

Here are five of the factors driving this strategic direction:

1. Tariff and Trade Policy Uncertainty

Major MedTech firms have projected hundreds of millions of dollars in tariff-related costs. U.S.-China trade tensions continue, and new proposals target critical components such as semiconductors. Beyond added cost, shifting policies create uncertainty that can disrupt planning cycles. By reshoring, companies can mitigate the impact of import tariffs and reduce reliance on trade flows that might be vulnerable to sudden political change.

2. Total Cost of Ownership

Companies can make more informed decisions about reshoring when they consider the full financial and operational impact. Evaluating the total cost of ownership involves considering not just the direct costs of manufacturing, but also hidden costs such as extended regulatory validation and qualification cycles, heightened audit and compliance requirements for overseas facilities, increased risk of product recalls or remediation if quality falters, and potential loss of intellectual property protections.

3. Automation and Advanced Technologies

From robotic cleanroom assembly to UDI traceability systems, new technologies enable higher throughput while meeting strict regulatory requirements. Digital quality management systems and process automation can also streamline compliance reporting, reducing both cost and human error. As firms invest in U.S. facilities, the integration of advanced tools can offset higher labor costs while building resilience.

4. Strategic Partnerships

Do you already have strategic partnerships with U.S. based contract development and manufacturing organizations (CDMOs) that you can leverage? Collaborating with partners who already meet ISO 13485 standards and have experience with FDA audits can enable faster ramp-up, access to specialized expertise, and reduced risk compared to setting up new, or expanding existing, operations.

5. Geopolitical Stability

North America’s relatively stable political and economic environment minimizes the risk of supply chain disruption and sudden regulatory change.

Manufacturing and Economic Benefits

Reshoring manufacturing operations to North America is a multifaceted strategy that offers numerous benefits beyond cost. Ultimately, these decisions are about resilience, ensuring patients and providers receive life-saving technologies without disruption.

Reshoring is not an easy decision, and it carries execution risks. But as MedTech companies continue to navigate the global trade policy shifts and evaluate their manufacturing and supply chains, reshoring will likely remain a critical consideration for executive leaders this year and the years to come.