By Patrick Wingrove
(Reuters) – Swiss drugmaker Novartis said on Thursday it plans to spend $23 billion to build and expand 10 facilities in the U.S., as it grapples with renewed threats of drug import duties from the Trump administration.
Novartis said it plans to build six new manufacturing plants, some of which will make raw pharmaceutical ingredients, as well as a new research and development site in San Diego, California.
Novartis’ drugs, including heart failure medicine Entresto and breast cancer therapy Kisqali, are manufactured across 33 sites globally.
The new sites and extensions will be built over the next five years and are expected to create more than 1,000 jobs for skilled workers like engineers and scientists as well as another 4,000 support staff and construction jobs, Novartis said.
The company said it had yet to decide where to build four of its new manufacturing plants, but that two used to produce certain cancer therapies would be built in Florida and Texas.
The announcement comes two days after President Donald Trump said the U.S. will soon announce a “major” tariff on pharmaceutical imports, sending shares of drugmakers plunging.
“We believe we can manage the tariffs – though of course they will be very painful – so while that is a factor (behind this investment), it’s not the driving factor,” Novartis Chief Executive Vas Narasimhan said in an interview, adding that it aims to produce all the drugs it sells to Americans in the U.S. rather than import them.
The Basel, Switzerland-based drugmaker has previously said it hoped to become a top-five player in the U.S. pharmaceuticals market, the largest in the world, as part of a U.S.-first strategy.
Over the next five years, Novartis’ total investment in U.S. operations is expected to reach nearly $50 billion, the company said.
U.S. drugmakers including Eli Lilly and Johnson & Johnson announced their own U.S. manufacturing investments earlier this year, with Lilly committing to spend $27 billion on U.S. plants over five years.
Trump, who campaigned on a promise to boost domestic manufacturing, has been piling pressure on drugmakers since taking office to move medicine production to the U.S.
Industry trade group PhRMA has said it can take 5 to 10 years and $2 billion to bring on a new production facility in the U.S. in part because of regulatory requirements.
(This story has been corrected to change the number of additional jobs to 4,000, from 3,000, in paragraph 4)
(Reporting by Patrick Wingrove in New York; Editing by Caroline Humer and Bill Berkrot)
