Starting Wednesday (October 1), the Trump administration has imposed tariffs of up to 100% on imported brand-name and patented drugs, prompting global pharmaceutical giants to accelerate their actions, enhancing domestic manufacturing capabilities in the United States, and stockpiling inventory.
According to Reuters, President Trump’s tariff policy has triggered a series of effects in the entire pharmaceutical industry: drug manufacturers are speeding up their projects in the US, drastically reducing drug prices, and shifting to a direct-to-consumer sales model.
Here are the specific mitigation measures taken by major pharmaceutical companies to alleviate supply chain risks and reassure investors:
On Tuesday (September 30), Pfizer was the first to reach an agreement with President Trump, committing to invest $70 billion in research and domestic manufacturing, and receiving a three-year grace period to exempt its products from the tariffs targeting the pharmaceutical industry.
Under the agreement, the company voluntarily agreed to sell drugs to Medicaid patients at lower prices and will sell some drugs directly to consumers through a new government-operated website called “TrumpRx.”
Following this announcement, Pfizer’s stock price rose by five percent.
London-based pharmaceutical company GlaxoSmithKline (GSK) plans to invest $30 billion over the next five years in research and supply chain infrastructure in the United States.
US-based pharmaceutical company Eli Lilly announced in September that it will invest $5 billion in constructing a manufacturing facility in Virginia. This facility is the first of four new US factories in its $27 billion expansion plan over the next five years.
Johnson & Johnson plans to increase its investment in the US by 25% over the next four years, totaling $55 billion. It intends to build four new factories over the next decade, including one in Wilson, North Carolina, and another in Holly Springs, North Carolina, in partnership with Fujifilm Biotechnologies. The locations of the other factories have not been disclosed.
Swiss pharmaceutical company Roche announced in April that it would invest $50 billion in the US over the next five years.
A month later, Roche announced an additional investment of $550 million to expand its diagnostic product manufacturing facility in Indianapolis. This expansion will cover Indiana, Pennsylvania, Massachusetts, and California, and is expected to create over 12,000 job opportunities.
Roche announced in May a plan to invest over $700 million in building a new drug manufacturing facility in Holly Springs, North Carolina.
CEO Thomas Schinecker stated in July that the company had pre-positioned inventory and increased production of all drugs already manufactured in the US to counter the tariffs.
Drugmaker AstraZeneca plans to invest $50 billion in US manufacturing by 2030. This investment will include constructing a new active pharmaceutical ingredient facility in Virginia, the company’s largest single-site global investment, and expanding facilities in Maryland, Massachusetts, California, Indiana, and Texas.
Company executives stated that the impact would be “very short-lived.”
Swiss pharmaceutical company Novartis plans to invest $23 billion in the US over the next five years to build and expand ten facilities. This includes constructing six new manufacturing plants and expanding its research center in San Diego, creating over 1,000 job positions.
French pharmaceutical company Sanofi plans to invest at least $20 billion in the US by the end of 2030 to promote manufacturing and research. Sanofi intends to expand its US manufacturing capacity by directly investing in its own facilities and collaborating with other domestic manufacturers.
CFO François Roger stated in July that due to existing inventory in the US, potential tariffs are expected to have limited impact by 2025.
US pharmaceutical company Biogen will invest an additional $2 billion in its existing manufacturing plant in North Carolina to enhance gene therapy and automation capabilities. Biogen currently operates seven factories in the state, with the eighth expected to be operational by the end of 2025.
Merck plans to invest $1 billion in building a new factory in Delaware for producing biologics and cancer immunotherapy drug Keytruda, to increase US output and potentially create over 4,500 job opportunities. Merck also opened a $1 billion facility in North Carolina in March.
Additionally, Merck’s Animal Health division will invest $895 million to expand its manufacturing and research facility in Kansas, as part of its $9 billion extensive investment in the US by 2028.
CEO Robert Davis stated in July that potential tariffs would have minimal impact by 2025, and with inventory management and shifting manufacturing to the US, the company remains in a favorable position.
Biopharmaceutical company Amgen plans to invest $900 million to expand its manufacturing facility in Ohio, bringing its total investment in the state to $1.4 billion, and adding 750 job positions. Last December, Amgen pledged $1 billion to build a second facility in Holly Springs, North Carolina.
Amgen announced in September plans to invest over $600 million in constructing a new research center at its headquarters in Thousand Oaks, California.
Amgen also announced a $650 million investment to expand its drug manufacturing facility in Juncos, Puerto Rico, which is expected to create nearly 750 job positions.
Danish pharmaceutical company Novo Nordisk stated in August that its strong US manufacturing layout enables it to effectively address tariff challenges, emphasizing its focus on being highly centered on and attentive to the US.
US pharmaceutical company AbbVie confirmed plans to continue investing in its previously announced $10 billion expansion in the US over the next decade.
AbbVie owns 11 manufacturing sites in the US and stated that, considering inventory management measures, it is “largely unaffected” by any tariffs this year.
Earlier this year, US pharmaceutical company Gilead Sciences announced plans to add a $11 billion investment domestically to increase its domestic manufacturing and research capabilities, bringing its total committed investment to $32 billion.
Gilead Sciences announced in September that it has initiated construction on its drug research and manufacturing center at its headquarters in Foster City, California.
Indian pharmaceutical company Cipla is expanding its advanced facilities in Fall River, Massachusetts, and Central Islip, Long Island, to increase production capacity for complex respiratory system products in the US.
While global pharmaceutical giants are committing to increasing production in the US, Lonza expects to receive an exemption from US import tariffs like Swiss major pharmaceutical firms Novartis and Roche.
Stephan Mumenthaler, head of the Swiss major chemical and pharmaceutical industry association Scienceindustries, representing about 250 Swiss chemical and pharmaceutical companies, told Reuters on Wednesday that following President Trump’s push to lower drug prices, Swiss pharmaceutical companies are likely to emulate the drug price agreement reached by Pfizer and the US.
Novartis has pledged to seek solutions to reduce costs for Americans and bridge the price gap between the US and other high-income countries.