On the heels of similar investment pledges from Eli Lilly and Johnson & Johnson, Switzerland’s Novartis is stepping up to the plate with a major plan to grow its U.S. footprint.
Novartis will spend $23 billion to build and expand 10 U.S. facilities over the next five years, the company said in a Thursday press release. Reuters first reported the news following an interview with Novartis’ CEO Vas Narasimhan.
The outlay is the latest in a series of moves seemingly spurred on by the threat of import tariffs on pharmaceuticals under the second Trump administration.
On the production front, Novartis will build four new manufacturing facilities in “soon-to-be-determined states,” plus establish new radioligand therapy plants in Florida and Texas. The company will also expand existing radioligand manufacturing facilities in Indiana, New Jersey and California.
Beyond the radioligand plants—which will likely support Novartis’ commercial radiopharmaceuticals Lutathera and Pluvicto—the new sites in the drugmaker’s production network will tackle manufacturing for biologic drug substances, final drug products, chemical drug substances and oral solids. The plants will also be equipped to handle device assembly and packaging duties, Novartis said.
When all is said and done, Novartis expects the added capacity will position the company to produce all its key medicines for U.S. patients entirely within the U.S.
Novartis already manufactures many of its key drugs—including cell and gene therapies and radiopharmaceuticals—in the U.S. for both domestic patients and those in other countries, the company pointed out. With the new investments, the drugmaker says it will bring its small interfering RNA (siRNA) production muscle to the U.S. for the first time and bolster its existing manufacturing firepower in areas like oncology, immunology and neuroscience.
With regards to domestic drug discovery, Novartis’ U.S. cash infusion also includes a $1.1 billion investment in a new R&D hub in San Diego, which the company says will serve as the “epicenter” of Novartis’ West Coast research presence once the facility opens in 2028 or 2029.
All told, the U.S. investment spree is expected to create 1,000 new jobs at Novartis.
Novartis is rolling out its investment plan a little more than a week after President Donald Trump unveiled his much-anticipated “Liberation Day” tariffs, which imposed base duties of 10% on nearly all U.S. imports and set varying reciprocal trade penalties for numerous other countries with high trade deficits.
Trump subsequently announced a 90-day pause on most of those reciprocal tariffs on Wednesday while continuing to pile on to China, the tariff rate for which now stands at a whopping 145%.
While pharmaceuticals were exempted from this latest round of tariffs, renewed threats from the president around sector-specific duties targeting pharmaceuticals have caused industry share prices to drop in recent days. Trump has previously suggested pharmaceutical tariffs could climb to “25% or higher.”
Novartis helmsman Narasimhan did not address Trump’s tariffs in his company’s release, noting instead that the investment strategy supports the drugmaker’s “strong U.S. growth outlook.” The CEO also praised the “pro-innovation policy and regulatory environment in the U.S.” that helps Novartis chase medical innovations.
"We are prepared for shifts in the external environment and fully confident in our 2025 guidance, mid- to long-term sales growth outlook and 2027 core margin guidance,” Narasimhan said.
Tariffs have long been part of the agenda for Trump 2.0, and several other large drugmakers already appear to have read the writing on the wall.
Back in February, Eli Lilly said at an event dubbed “Lilly in America” that it will spend $27 billion to build four new U.S. production facilities, more than doubling the sum it had earmarked for domestic manufacturing since 2020.
Roughly a month after that, Johnson & Johnson telegraphed a $55 billion investment in the U.S. over the next four years, which will include the build-out of three new manufacturing sites, plus expansions of others already in the pharma behemoth’s medicines and medtech network. J&J's planned investment represents a 25% increase over the prior four-year period.
Meanwhile, in the aftermath of Trump’s April 2 tariff reveal, biopharma leaders warned the European Commission this week that the EU could lose investments, R&D and manufacturing infrastructure to the U.S. unless the bloc delivers “rapid, radical policy change” in favor of domestic life sciences.