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Swiss pharma group Novartis has said it will expand its US manufacturing and research and development with a $23bn investment over five years, as drugmakers reconfigure their supply chains as part of preparations for potential US tariffs.
Novartis, which makes a wide range of medicines from cancer to cardiovascular drugs, said the investments would enable it to produce all of its key US drugs in the country. It will build seven new facilities and expand others.
Vas Narasimhan, chief executive of Novartis, said the investments reflected the “pro-innovation policy and regulatory environment in the US that supports our ability to find the next medical breakthroughs for patients”.
The announcement is the latest US investment by a big drug company since Donald Trump won the presidential election. Indianapolis-based Eli Lilly announced plans for $27bn of investment in February, while Johnson & Johnson, which is headquartered in New Jersey, said last month that it would invest more than $55bn in four factories. AstraZeneca said in November that it would invest $3.5bn in the US.
The pharmaceutical industry was exempt from the sweeping global tariffs announced by Trump last week. But the administration has signalled that they will be imposed soon.
Novartis estimates that the investments will create nearly 1,000 jobs at the company, and a further 4,000 in the supply chain and communities. It will also invest in producing active pharmaceutical ingredients in the US, an area where the industry is very reliant on supplies from China and India.
The company will establish a $1.1bn research and development institute in San Diego, its second in the US after its existing facility in the Boston area. It will open manufacturing facilities for radioligand therapy, an innovative cancer treatment that is a more targeted version of radiotherapy, in Florida and Texas, and expand factories already making the treatment in Indiana, New Jersey and California.
Narasimhan said the company was “prepared for shifts in the external environment” and “fully confident” in its guidance for the year, and the mid to long term, including its guidance for a core margin of at least 40 per cent by 2027.
